BAE Systems plc has entered into an agreement to purchase the Ball Aerospace business from Ball Corporation in a cash transaction valued at approximately £4.4 billion. This acquisition is expected to provide BAE Systems with a tax benefit of around $750m (£589m).
Ball Aerospace is a leading provider of space systems and defence technologies, offering a range of products such as spacecraft, mission payloads, optical systems, and antenna systems. With a strong history of development, the company serves various sectors including air, land, and sea domains.
By acquiring Ball Aerospace, BAE Systems anticipates adding over $2 billion in annual revenues in the growing space domain, C4ISR, and missile and munitions markets. The company’s clientele includes the intelligence community, US Department of Defense, and civilian space agencies. In 2023, Ball Aerospace is projected to achieve adjusted EBITDA of approximately $310 million.
Headquartered in Colorado, Ball Aerospace has a workforce of more than 5,200 employees, with over 60% holding US security clearances.
To fund the transaction, BAE Systems plans to utilize a combination of new external debt and existing cash resources. The deal is expected to be completed in the first half of 2024. Should certain regulatory conditions not be met within the agreed timeframe, a termination fee of $100 million will be payable by BAE Systems to Ball Aerospace’s parent company.
According to Charles Woodburn, the CEO of BAE Systems, the proposed acquisition of Ball Aerospace presents a unique opportunity to enhance BAE Systems’ core business with a high-quality, fast-growing technology-focused company. He emphasized the strategic and financial rationale behind the deal, highlighting its alignment with the company’s defense and intelligence priorities.
Woodburn added, “We couldn’t be more pleased to have reached this agreement and we look forward to welcoming the employees of Ball Aerospace to BAE Systems as we work together to support our customers and create value for shareholders.”
