- BAE Systems agrees to buy Ball Aerospace for $5.55bn in cash
- Ball Aerospace expects revenues of $2.2bn
- Ball Aerospace expects EBITDA of $310m
Aarin Chiekrie, equity analyst at Hargreaves Lansdown:
“BAE Systems has announced the acquisition of Ball Aerospace for a mammoth $5.55bn in cash. For perspective, that’s equivalent to almost 20% of BAE’s current market cap. Ball Aerospace provides mission-critical space systems and defence technologies across air, land and sea – complementing BAE’s suite of products nicely. The acquisition should add around $2.2bn in revenue to BAE’s top line, before growing at a compound rate of around 10% annually over the next 5 years. And given the similarities between the two businesses, there’s clear scope to streamline operations, cut costs and boost profit margins.
An acquisition of this size has only been made possible by BAE’s improved performance in recent years. Revenues and operating profits grew at double-digit rates in the first half and cash flows are much healthier now too, which has opened the door to deals like this as well as funding increased shareholder returns via dividends and new buyback programmes.”
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