Filed by DRS Technologies, Inc.
Pursuant to Rule 425
under the Securities Act of 1933, as amended
Subject Company: Integrated Defense Technologies, Inc.
Subject Commission File No.: 001-31235
On August 18, 2003, DRS Technologies, Inc. and Integrated Defense
Technologies, Inc. issued a joint press release. The text of the joint press
release follows.
DRS TECHNOLOGIES TO ACQUIRE INTEGRATED DEFENSE TECHNOLOGIES
PARSIPPANY, N.J., August 18 -- DRS Technologies, Inc. (NYSE: DRS) and
Integrated Defense Technologies, Inc. (NYSE: IDE) jointly announced today that
they have signed a definitive agreement, which provides for the merger of
Integrated Defense Technologies, Inc. (IDT) with a wholly-owned subsidiary of
DRS Technologies, Inc. (DRS). As a result of the merger, DRS will acquire all
of the outstanding stock of IDT for $17.50 per share in cash and DRS common
stock, subject to a collar.
Each share of IDT common stock will be converted in the merger into
the right to receive a combination of $12.25 in cash and 0.1875 of a share of
DRS common stock. The collar provides that if DRS's average common stock
closing price prior to the closing of the transaction decreases below $28.00
per share, the exchange ratio will increase proportionally, provided that the
exchange ratio will not increase above 0.2027 of a share of DRS common stock.
The cash portion of the acquisition, together with the debt of IDT to
be refinanced, will aggregate approximately $437 million at closing. Total
consideration for the acquisition, including an estimated $175 million of
IDT's net debt to be refinanced at closing, is approximately $550 million,
representing a multiple of 1.5x the revenues and 8.5x the EBITDA (earnings
before interest, taxes, depreciation and amortization) expected to be
contributed by IDT during DRS's next full fiscal year ending March 31, 2005.
The transaction is expected to close by the end of this year, and is subject
to customary regulatory approvals and other closing conditions, including
approval by a majority of IDT's stockholders at a special meeting.
DRS expects to provide the cash to acquire IDT by utilizing existing
excess cash on hand, additional bank borrowings and through the issuance of
debt securities. Wachovia Securities is serving as financial advisor to DRS on
the transaction. Bear, Stearns & Co. Inc. is serving as financial advisor to
IDT on the transaction. Bear, Stearns & Co. Inc. has further provided to DRS
committed financing necessary to consummate the acquisition.
DRS also entered into a voting agreement with Veritas Capital
Management, LLC (Veritas), a New York-based investment management firm, and
certain of its affiliates, which beneficially own 55 percent of IDT's
outstanding shares. Subject to certain conditions, the Veritas entities have
agreed to vote in favor of the merger at the special meeting of IDT's
stockholders and have sufficient shares to approve the merger at the special
meeting. The acquisition is expected to add immediate earnings accretion.
Mark S. Newman, DRS Technologies' chairman, president and chief
executive officer, commented, "IDT and DRS are two of the largest, pure-play
defense electronics suppliers in the world, and the combination will firmly
establish DRS Technologies as the leading mid-tier defense technology company
with an approximate run rate of $1.2 billion in annual revenues. This
transaction will be a major milestone in our growth, strengthening our
strategic position and diversifying our business mix, while enhancing our
content on key programs."
Robert B. McKeon, IDT's chairman, who will be joining the DRS board
of directors upon the closing of the transaction, remarked, "DRS Technologies
is a well-established, well-regarded presence in defense electronics, and the
combination with IDT will create a formidable, mid-tier industry competitor. I
look forward with great anticipation to contributing to DRS's board and to the
exciting growth opportunities I believe this combination offers to DRS's
investors, customers and employees."
DRS Technologies said the acquisition will accomplish several
objectives:
o The combination will create the industry's leading mid-tier defense
technology company;
o IDT will contribute an extensive, diversified product base, expanded
customer relationships and a broad array of profitable, currently fielded
programs to DRS's portfolio. No one product or program of the combined
company will account for more than approximately 6 percent of revenues;
o IDT will provide increased content on key Army and Navy weapons programs,
and significantly expand DRS's intelligence agency business;
o IDT will provide key program additions in power technologies, including a
market position on a U.S. Army hybrid electric drive program, as well as a
position in power distribution switchgear for the LHD-8 Amphibious Assault
Ship under development at Northrop Grumman (NYSE: NOC) Ship Systems, which
complement DRS's strong presence in the Naval power systems business;
o IDT will contribute a significant new base of U.S. Air Force programs,
including the recently awarded P5 Combat Training System contract with a
ten-year cumulative value estimated at $367 million. Approximately 20
percent of IDT's fiscal 2002 revenues were derived from Air Force programs;
and
o IDT will be immediately accretive to earnings and cash flow.
Integrated Defense Technologies, headquartered in Huntsville,
Alabama, is a leading developer and provider of mission-critical, advanced
electronics and technology products for the defense and intelligence
industries. Its systems, subsystems and components are sold to all branches of
the U.S. armed services, various government agencies, major prime defense
contractors and international governments. IDT is organized into three
business segments: Electronic Combat Systems, Diagnostics and Power Systems,
and Communications and Surveillance Systems. IDT employs over 2,100 people.
Many of IDT's products and technologies share strong program and
military platform synergies with DRS. IDT's complementary programs, depth of
engineering talent, commitment to investments in research and development, and
breadth of technology render it uniquely positioned to leverage the military's
near-term force modernization and emerging transformation initiatives. IDT's
products are installed on or used in the support of a broad array of
front-line military platforms, including the U.S. Air Force F-16 Fighting
Falcon, C-17 Globemaster II, C-130 Hercules and U.S. Navy F/A-18 Hornet
aircraft; U.S. Navy DDG-51 Aegis destroyer, LHD-8 Amphibious Assault Ship and
Trident submarine; U.S. Army M1 Abrams Main Battle Tank, Light Armored
Vehicle, High-Mobility Multi-purpose Wheeled Vehicle (HMMWV) and M2 Bradley
Fighting Vehicle; and the U.S. Army Patriot and U.S. Navy Tomahawk missile
systems. With a diversified base of over 500 products on approximately 250
programs, IDT's systems are installed on or support over 275 platforms. Most
of its products are vital components of systems considered mission critical or
mission essential to the operational goals of the Department of Defense.
DRS Technologies provides leading edge products and services to
government and commercial customers worldwide. Focused on defense electronics,
DRS develops and manufactures a broad range of mission critical systems and
components in the areas of communications, combat systems, battlefield
digitization, electro-optics, power systems, data storage, digital imaging,
flight safety and space. For more information about DRS Technologies, please
visit its web site at www.drs.com.
For more information about Integrated Defense Technologies, please
visit its web site at www.integrateddefense.com.
SAFE HARBOR: This press release contains forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that are based
on management's beliefs and assumptions, current expectations, estimates and
projections. Such statements, including statements relating to DRS
Technologies' and Integrated Defense Technologies' expectations for future
financial performance, are not considered historical facts and are considered
forward-looking statements under the federal securities laws. These statements
may contain words such as "believes," "anticipates," "plans," "expects,"
"intends," "estimates" or similar expressions. These statements are not
guarantees of the companies' future performance and are subject to risks,
uncertainties and other important factors that could cause actual performance
or achievements to differ materially from those expressed or implied by these
forward-looking statements and include, without limitation, demand and
competition for such companies' products and other risks or uncertainties
detailed in such companies' Securities and Exchange Commission filings. Given
these uncertainties, you should not rely on forward-looking statements. The
companies undertake no obligations to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT:
This press release does not constitute an offer to sell or a
solicitation of an offer to buy and does not constitute an offer,
solicitation, or sale in any jurisdiction. DRS intends to file with the SEC a
registration statement on Form S-4 that will include a proxy statement to
stockholders of IDT and other relevant documents in connection with the
proposed transaction. Investors and security holders of IDT are urged to read
the proxy statement/prospectus and other relevant materials when they become
available because they will contain important information about DRS, IDT and
the proposed transaction. Investors and security holders may obtain a free
copy of these materials (when they are available) and other documents filed
with the Securities and Exchange Commission at the SEC's web site at
www.sec.gov. A free copy of the proxy statement/prospectus, when it becomes
available, may also be obtained from Integrated Defense Technologies, Inc.,
110 Wynn Drive, Huntsville, AL 35805, Attn: Investor Relations. In addition,
investors and security holders may access copies of the documents filed with
the SEC by IDT on IDT's web site at www.integrateddefense.com, and investors
and security holders may access copies of the documents filed with the SEC by
DRS on DRS's web site at www.drs.com. IDT and its executive officers and
directors may be deemed to be participants in the solicitation of proxies from
its stockholders with respect to the proposed transaction. Information
regarding the interests of these officers and directors in the proposed
transaction will be included in the proxy statement/prospectus.
Note to investors:
DRS Technologies will host a conference call, which will be
simultaneously broadcast live over the Internet, in conjunction with this news
release. Mark S. Newman, chairman, president and chief executive officer,
Richard A. Schneider, executive vice president and chief financial officer,
and Patricia M. Williamson, vice president, corporate communications/investor
relations, will host the call, which is scheduled for today, Monday, August
18, 2003, at 9:30 a.m. EDT. Listeners can access the call live and archived at
DRS's web site on page http://www.shareholder.com/drs or at CCBN's
institutional investor site at http://www.street events.com or individual
investor center at http://www.companyboardroom.com. Please allow 15 minutes
prior to the call to visit these sites and download and install any necessary
audio and virtual viewing software.
Wachovia Securities is the trade name for the corporate and investment banking
services of Wachovia Corporation and its subsidiaries, including Wachovia
Capital Markets, LLC (WCM), member NYSE, NASD, SIPC.