BAE will purchase Armor Holdings

• Article
• Comments ()
• Click-2-Listen
• Videos

By

British defense contractor BAE Systems Inc. yesterday said it would buy Armor Holdings Inc., an armor manufacturer in Jacksonville, Fla., for $4.1 billion.

The Rockville-based North American subsidiary of BAE Systems PLC offered $88 cash to Armor Holdings shareholders, 7 percent above Friday's close of $82.15.

Shares of Armor Holdings rose 5.4 percent to $86.60 on the New York Stock Exchange yesterday. BAE shares did not trade because the London Stock Exchange was closed for a holiday.

Armor Holdings has seen big profits from military contracts for its body armor and vehicle armor products for Humvees and other military trucks.

"This acquisition will enhance our North American operations, and we can now provide both tracked and wheeled vehicles," said John Measell, a spokesman for BAE Systems Inc

BAE manufactures tanks and vehicles, such as the Bradley tanks, which run on tracks rather than on wheels .

The deal is expected to close in the third quarter after regulatory reviews and shareholder approval.

Stock analysts said they aren't expecting any regulatory issues and doubt any rival bidders would make a higher offer.

This is BAE's second major purchase of a U.S. armor company in the past two years. In 2005, BAE Systems paid $4.19 billion for United Defense Industries Inc., an Arlington contractor that manufactures armored vehicles.

The effectiveness of snipers and improvised explosive devices (IEDs) in Iraq have increased the U.S. military's demand for body and vehicle protection for coalition troops.