L3Harris Technologies, Inc. (NYSE:LHX) entered into a definitive agreement to acquire Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) from a group of shareholders for $4.8 billion on December 17, 2022. Under the terms of the transaction, L3Harris will acquire Aerojet for $58 per share, in an all-cash transaction valued at $4.7 billion, inclusive of net debt. The cash acquisition will be funded with existing cash and the issuance of new debt. The Tactical Data Link acquisition and the Aerojet Rocketdyne transaction were funded with more than $6.5 billion of new debt in aggregate. Under the transaction, Aerojet business will operate as part of a new standalone segment post-transaction. The transaction represents LTM EV/EBITDA multiple of 16.5x and LTM EV/EBITDA multiple of +1.6x in the proposed Lockheed Martin sale. Upon termination under certain specified circumstances, Aerojet Rocketdyne must pay L3Harris a termination fee of $95.6 million. The Merger Agreement also provides that L3Harris will be required to pay Aerojet Rocketdyne a termination fee of $406.3 million under certain circumstances if the Merger Agreement is terminated.

The transaction is subject to required regulatory approvals and clearances and other customary closing conditions; including the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the ?HSR Act?); and the adoption of the Merger Agreement by holders of a majority of the outstanding Aerojet Rocketdyne common stock. The board of directors of Aerojet unanimously approved the Merger. The board of directors of L3Harris also approved the transaction. As of March 15, 2023, L3Harris Technologies received a request for additional information from the Federal Trade Commission as part of the regulatory review process for the acquisition. The second request extends the waiting period imposed by the Hart-Scott-Rodino Act until 30 days after L3Harris and Aerojet Rocketdyne have substantially complied with the request, or the waiting period is terminated sooner by the FTC. As of March 16, 2023, Aerojet stockholders voted to approve the transaction. Approximately 99.7% of votes cast were in favor of the transaction. As of June 20 2023, U.S. Chamber of Commerce backs L3Harris merger with Aerojet. As on July 26, 2023, the Federal Trade Commission announced that it will not block the acquisition of Aerojet. As of July 26, 2023, the waiting period under the HSR Act has expired. The transaction is expected to close in the second half of 2023. As of July 26, 2023, L3Harris expects the Merger to close on or about July 28, 2023, subject to the satisfaction of the remaining closing conditions. The transaction is accretive to L3Harris' non-GAAP EPS (year 1) and adjusted free cash flow (year 2).

Barclays Capital Inc. and Goldman Sachs & Co. LLC acted as the financial advisors to L3Harris. Mark Brod, William Sheehan, Krista McManus, Steve DeLott, Karen Hsu Kelley, Mario Ponce, Sebastian Tiller, Peter Guryan, Richard J. Jamgochian, Kelly Karapetyan, James A. Goldfeier, Jamin R. Koslowe, Sophie A. Staples, Timothy J. Mulvihill and Lori E. Lesser of Simpson Thacher & Bartlett LLP acted as the legal advisors to L3Harris. Citigroup Global Markets Inc. and Evercore Group L.L.C. acted as the financial advisors to Aerojet Rocketdyne. David A. Katz and Trevor S. Norwitz of Wachtell, Lipton, Rosen & Katz LLP acted as the legal advisors to Aerojet Rocketdyne. Citigroup Global Markets Inc. and Evercore Group L.L.C. acted as fairness opinion providers to the board of directors of Aerojet. D.F. King & Co., Inc. acted as proxy solicitor to Aerojet and Aerojet will pay D.F. King approximately $20,000, plus reimbursement of reasonable and documented out-of-pocket expenses. Damien C. Specht, Tina D. Reynolds, Charles L. Capito and James A. Tucker of Morrison & Foerster LLP acted as legal advisors to L3Harris. Aerojet Rocketdyne has agreed to pay Evercore a fee for its services in the amount of approximately $35.8 million, of which $2.5 million was paid upon delivery of Evercore?s opinion, and the balance of which will be payable contingent upon the consummation of the Merger. Aerojet Rocketdyne has agreed to pay Citi for its services in connection with the Merger an aggregate fee of $35.8? million, $2.5 million of which became payable upon delivery of Citi?s opinion to the Aerojet Rocketdyne board of directors and the remainder of which is payable contingent upon the consummation of the proposed Merger.

L3Harris Technologies, Inc. (NYSE:LHX) completed the acquisition Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) from a group of shareholders on July 28, 2023. Ross Niebergall will serve as President of the Aerojet Rocketdyne segment at L3Harris. Aerojet Rocketdyne continued its existence under Delaware law as the surviving corporation in the Merger and a wholly owned subsidiary of L3Harris.