Weapons and security services provider Kratos Defense & Security Solutions Inc. said Wednesday it is buying Henry Bros. Electronics Inc. for about $45 million in cash.
Henry Bros. focuses on national security projects such as command and control systems and specialized surveillance including thermal imaging systems.
Under the deal, Kratos is paying $7 per share, marking a 52 percent premium to Henry Bros. closing stock price of $4.60 on Tuesday. Holders of about 60 percent of Henry Bros. common stock, including President and CEO Jim Henry, have already agreed to vote in favor of the buyout.
Henry Bros. expects about $65 million in revenue in 2010 and has a backlog of about $53 million.
B. Riley & Co. LLC acted as financial adviser to San Diego-based Kratos. The deal, which is expected to close at the end of the year, will be funded in part with proceeds from a stock offering.
Kratos is selling 2.3 million shares at $10.20 each, and has granted underwriters the option to buy up to 230,000 more shares. Assuming the overallotment option is exercised, Kratos expects proceeds of $24.6 million offering after expenses.
Kratos shares fell 6 cents to $10.81 in morning trading.
