Merger complete in Leidos and Lockheed Martin IS&GS transaction
NewsAugust 16, 2016
BETHESDA, Md. Leidos Holdings, Inc. and Lockheed Martin officials completed the merger of of Leidos with Lockheed Martin's Information Systems & Global Solutions (IS&GS) business in a Reverse Morris Trust transaction.
“This strategic transaction enhances our competitive posture in our core aerospace and defense markets and increases the value we deliver to our stockholders,” says Lockheed Martin Chairman, President and CEO Marillyn Hewson. “As we position our company for the future, this action will enable us to focus our business growth strategy, align our technology investments and increase the value we deliver to customers worldwide.”
The closing of the merger followed the expiration of the exchange offer and the satisfaction of other conditions. As part of the transaction, Lockheed Martin received a $1.8 billion special cash payment. Lockheed Martin officials say, the company will use the cash payment to repay debt, pay dividends, and/or repurchase its stock.
As a result of the exchange offer, Lockheed Martin reduced outstanding shares of its common stock by 9,369,694 shares, or approximately three percent of the outstanding common shares. Participating Lockheed Martin stockholders received approximately 50.5 percent stake in Leidos, which is approximately 77 million shares of Leidos common stock.
The special cash payment, plus the shares of Leidos common stock that will be received by participating Lockheed Martin stockholders results in an aggregate transaction value of approximately $4.6 billion.
Lockheed Martin officials say, the merged company will offer a broader and more affordable portfolio of capabilities and services to customers.
The Leidos Board of Directors also announced the election of three new directors to serve on the Leidos board: Gregory R. Dahlberg, Surya N. Mohapatra and Susan M. Stalnecker. The board now has 12 directors.
