Raytheon said it is offering $38 per share for Applied Signal’s shares, or a total of $490 million net of cash acquired. The transaction is expected to be completed in the first quarter of 2011.
The military cybersecurity firm will be integrated into Raytheon's Space and Airborne Systems business. The company’s products include secure broadband network communications; cyber intelligence systems, software and analytics to address cyberspace threats; electronic warfare solutions; and other capabilities that enable military customers to detect, evaluate and respond to cyberthreats.
Raytheon beat out Cobham, L-3 Communications, and Science Applications International Corp. to acquire Applied Signal, which announced in October that it was exploring a sale or merger of the company. Reuters predicted that the bidding war for Applied Signal would spark a flurry of cybersecurity acquisitions in the military area.
Two other cybersecurity firms cited as likely acquisition targets are KEYW, based in Hanover, Md., and Mercury Computer Systems, based in Chelmsford, Mass.