L-3 Communications to Buy SPD Technologies

SPD Technologies Inc., an electrical products maker with a large manufacturing facility in Anaheim, said Monday that it will be bought by a New York-based supplier of communications systems for $230 million.

The proposed acquisition by L-3 Communications Holdings will allow the former unit of Lockheed Martin Corp. to expand both its product line and access to the U.S. Navy, officials said.

Privately held SPD Technologies, which is headquartered in Philadelphia, acquired Power Paragon Inc. in Anaheim last July for an undisclosed sum, giving SPD a large development facility in Anaheim and several large naval contracts.

SPD’s products manage electrical power in submarines and other ships, including all of the Navy’s nuclear vessels. L-3 officials say they are betting the new line of products will make its communication systems more attractive to the military and other government agencies.

SPD is a “profitable, well-managed company,” said Frank Lanza, chairman and chief executive officer of L-3 Communications. The acquisition will help L-3 “significantly increase our product and subsystem base for domestic and foreign navies,” he said.

SPD has 1,300 employees worldwide, with about 625 people based in its Anaheim offices. Company officials said they don’t expect any layoffs as a result of the deal.

L-3 Communications, which was spun off from Lockheed last year, said it expects SPD to add 2 cents to 3 cents to per-share earnings this year and 10 cents to 15 cents in 1999. SPD had sales of $170 million last year, while L-3, as part of Lockheed, had 1997 sales of $894 million.

The buyout is expected to be finalized by fall. L-3 plans to pay for the purchase with cash on hand and borrow the remainder.

L-3’s stock rose $2.38 to $36.13 a share on the New York Stock Exchange, after hitting a record high $36.44 earlier in the trading session. The stock has climbed about 64% since its initial public offering at $22 a share in May.