In the latest of the increasingly frenetic US defence electronics consolidations, Lexington, Massachusetts-based Raytheon Co is to eliminate Dallas-based E-Systems Inc as a competitor by acquiring the company for $64 cash a share – compared with Friday’s close of $45.375 – or about $2,300m all told. The combination creates a company with over $12,000m in annualised sales – $2,000m from E-systems, and the transaction is expected to provide a small increase in Raytheon’s earnings per share in 1995 and an increasingly positive contribution to earnings per share thereafter. On the computer front, Raytheon is big in miltarised versions of Digital Equipment Corp computers and owns computer services company Data Logic Ltd in the UK; E-Systems has diversified from its defence core with Emass, a vast tape library adopted from the likes of IBM Corp for the RS/6000 and Convex Computer Corp for its supercomputers. Raytheon says it has financing commitments from Chemical Bank, Bank of America, National Trust & Savings Association and The Chase Manhattan Bank to provide up to $3,000m in unsecured financing to support the tender offer. Raytheon, which also makes aircraft and missiles, says the acquisition brings its annualised electronics sales to $6,000m and its electronics sector backlog to $8,000m. E-Systems will retain its name and will stay in Dallas, Raytheon promised.
