General Dynamics and Force Protection Agree to Terms of Acquisition
FALLS CHURCH, VA. and SUMMERVILLE, S.C. – General Dynamics (NYSE: GD) and Force Protection, Inc. (NASDAQ: FRPT) announced that they have entered into a definitive merger agreement under which General Dynamics will acquire Force Protection for a price of $5.52 per share of common stock, or approximately $360 million.
Force Protection will become a part of General Dynamics Land Systems, the Sterling Heights, Mich.-based designer and manufacturer of Abrams main battle tanks and Stryker infantry combat vehicles.
"Force Protection complements and strategically expands General Dynamics’ armored vehicle business, adding new products to the expansive portfolio of combat vehicles that we currently manufacture and support," said Mark C. Roualet, president of General Dynamics Land Systems. "In addition, Force Protection’s skilled workforce provides high-quality support and sustainment services to an installed fleet of approximately 3,000 vehicles, strengthening our ability to support assets deployed with U.S. forces around the world. With this acquisition, we will create new opportunities to serve domestic and international customers alike."
Michael Moody, chairman and chief executive officer of Force Protection, Inc., commented, "After careful consideration of the strategic direction of Force Protection, our board decided that a sale to General Dynamics would maximize value for our stockholders. With their armored vehicle business, General Dynamics will be able to pursue opportunities that we could not have pursued as a stand-alone company. As part of the General Dynamics family, our innovative products and offerings will continue to provide militaries worldwide critical assets that save troops’ lives."
The proposed acquisition has been approved by the board of directors of each company. Under the terms of the merger agreement, General Dynamics will commence a tender offer for all of the outstanding shares of common stock of Force Protection. Force Protection’s board of directors has resolved to recommend that Force Protection stockholders tender their shares into the tender offer in accordance with the terms of the merger agreement. The transaction is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the companies expect the transaction to be completed by year-end 2011. The transaction is expected to be accretive to General Dynamics’ earnings in 2012.
Force Protection, which has approximately 1,100 employees, provides survivability solutions to support the armed forces of the United States and its allies. The company designs, manufactures, tests, delivers and supports its blast- and ballistic-protected products to increase survivability for users.
Force Protection’s specialty vehicles – including the Buffalo, Cougar and Ocelot – are at the forefront of blast- and ballistic-protected technology. Those vehicles are designed specifically for reconnaissance and urban operations and to protect their occupants from landmines, hostile fire and improvised explosive devices (IEDs, commonly referred to as roadside bombs). The company has delivered more than 3,000 vehicles under the U.S. military's Mine Resistant Ambush Protected (MRAP) vehicle program, and also provides Cougar and Buffalo mine-protected vehicles to foreign customers including the United Kingdom Ministry of Defence.
General Dynamics Land Systems is a leading manufacturer of wheeled, tracked and amphibious combat vehicles, offering a spectrum of design, production and lifecycle support to customers worldwide. General Dynamics Land Systems employs world-class manufacturing and systems-integration processes to develop vehicles designed to meet current and future ground-combat requirements. The company employs approximately 8,400 workers.
More information about General Dynamics is available at www.generaldynamics.com.