Textron to buy maker of unmanned aircraft
providence, r.i. -- Textron Inc. said Monday that it would purchase United Industrial Corp. for about $1.1 billion in a deal that company officials said underscored the importance of unmanned aircraft to the U.S. military.
The transaction would help Textron expand its aerospace and defense business.
United Industrial’s AAI Corp. unit, based in Hunt Valley, Md., makes aerospace and defense systems including unmanned aircraft and ground control stations and counter-sniper devices.
Textron, a diversified conglomerate, owns Bell Helicopter and Cessna and also makes golf carts, auto parts and surveillance systems.
Textron Chief Financial Officer Ted French said Monday that company officials thought the military would continue to rely on unmanned aircraft and vehicles, as it does in Iraq and Afghanistan.
“The role of unmanned systems is expected to continue to expand, providing us with significant growth opportunities,” French said. “And we believe we can convert this growth into expanding shareholder value.”
Defense contractors Northrop Grumman Corp. and privately held General Atomics are more widely known when it comes to unmanned aircraft used by the military for reconnaissance missions, says Loren Thompson, a defense analyst at the Virginia-based Lexington Institute.
However, the Pentagon buys fewer of these top-of-the-line models because of their higher price tags, opting instead for unmanned craft made by United Industrial that are less expensive but have many of the same capabilities, Thompson said.
Under the deal, Textron said, it would launch a cash tender offer of $81 a share for United Industrial stock as early as next week. The offer represents a 7.1% premium to United Industrial’s Friday closing price of $75.62.
United Industrial shares rose $4.77, or 6.3%, to $80.39. Textron shares fell $1.37, or 2.1%, to $64.01.