Morrison Knudsen to Acquire Raytheon Unit

Morrison Knudsen Corp. is acquiring Raytheon Co.’s engineering and construction division in a deal that will more than double its annual revenue. The Boise, Idaho-based construction and engineering company said it would pay $10 million in cash and assume $500 million in debt in the deal. Raytheon, a defense and aerospace concern based in Lexington, Mass., put the value of the deal at $800 million to $820 million overall, counting receivables, working capital and net pension assets it is keeping. “This transaction vaults Morrison Knudsen to a leadership position in the engineering and construction marketplace,” Morrison Knudsen Chairman Dennis Washington said. Morrison Knudsen reported its 14th straight profitable quarter this winter after years of wallowing in red ink brought on by diversification efforts that led to hundreds of millions of dollars in losses before William Agee was ousted as chief executive in 1995. The company, which has 22,000 employees, reported $2.2 billion in revenue last year, while Raytheon’s engineering and construction division had about $2.7 billion in revenue. On the New York Stock Exchange, Raytheon Class A shares closed up 69 cents at $20.69 while Morrison Knudsen shares rose 63 cents to $8.50.

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