Kratos Defense & Security Solutions Acquires Henry Bros. Electronics For $45 Million

Henry Bros. Electronics Inc.,a turnkey provider of technology-based integrated electronic security solutions, announced recently that it has entered into a definitive agreement with Kratos Defense & Security Solutions to acquire all outstanding shares of HBE common stock for a purchase price of approximately $45 million in cash, or $7.00 per HBE share of common stock.

The transaction is subject to the satisfaction of customary closing conditions, including approval by the holders of a majority of the outstanding shares of HBE, and also provides for a 40 day "go shop" period. Mr. Henry, Mr. Rockwell and all other directors of HBE, who collectively hold approximately 60 percent of HBE's shares outstanding, have agreed to vote their shares in favor of the anticipated merger.

Additionally, Henry has committed to purchase Kratos common stock in the open market at prevailing market prices using a portion of his share of the proceeds from the merger following the transaction closing. Imperial Capital LLC advised HBE and rendered a fairness opinion to the HBE board of directors in connection with the approval of the transaction by the board.

"This transaction combines two leaders in the defense and security solutions market, creating a great opportunity for our organization, customers and shareholders," said Jim Henry, president and CEO of HBE. "As a much larger organization, the combined company will be better able to establish a presence in targeted markets with the potential for significant growth opportunities, as well as enhanced service opportunities in certain key markets and industries."

"Henry Brothers is clearly one of the premier Homeland and National Security Solution Providers and Command and Control Center Design Engineering and Operators in the industry today,” said Eric DeMarco, Kratos' president and CEO. “We see the opportunity for significant cross selling between the two businesses, including for Henry Brothers' proprietary first responder communications products and solutions. Additionally, we see the opportunity to cross sell into HBE's large and established customer base Kratos' NeuralStar and DopplerVue situational awareness, security network management, protection and cybersecurity software products.

This transaction is expected to close by the end of 2010.

 

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