San Diego-based Kratos Defense & Security Solutions Inc. said Feb. 21 it is buying another defense contractor, San Diego-based SYS Technologies Inc., in an all-stock deal valued at $52 million.
Both public companies specialize in defense electronics. Kratos will pay $2.65 per share for the 19.7 million outstanding shares of SYS.
The transaction still needs shareholder approval and is expected to close in the second quarter.
The combined company will have 2,000 employees.
Kratos said the two companies’ projects complement each other and there is little competitive overlap. However, Kratos said it plans to reduce redundant administrative jobs.
Kratos shares trade on the Nasdaq as KTOS. In midday trading Feb. 21 they stood at $2.01, down 4.7 percent from the previous day’s closing price.
Kratos changed its name in September. It was previously known as Wireless Facilities.
Shares of SYS, which trade on the American Stock Exchange, stood at $2.30 in midday trading Feb. 21, up 47 percent from the previous day’s closing price.
SYS Chief Executive Cliff Cooke will remain with Kratos to oversee corporate and business development, Kratos said, adding that a “significant portion” of the SYS executives will remain with the new company.
, Brad Graves