L-3 Purchases Microdyne

L-3 Communications has signed a definite agreement to acquire Microdyne Corp. Under terms of the agreement, L-3 will purchase all of Microdyne's outstanding common stock for $5 per share in cash and will assume Microdyne's existing debt. The total value of the transaction is approximately $90 million.

Headquartered in Alexandria, VA, Microdyne provides aerospace telemetry receivers, secure communications services, and technical support services. In addition, the company offers products for the government and commercial segments of the US signal intelligence industry as well as support and repair services for electronic product companies.

For the physical year ended September 30, 1998, Mirodyne reported actual revenues of $58.3 million, operating income of $1.3 million, and net income of $0.3 million. On a pro forma basis, including acquisitions made during the 1998 fiscal year, Microdyne's revenues were $73.5 million, operating income was $3.6 million, and net income was 900,000.

Under the acquisition agreement, a cash tender offer will be commenced by a wholly owned subsidiary of L-3 Communications. The transaction is subject to the receipt of Microdyne's shares outstanding in the tender offer and the approval of L-3's lenders, regulatory approvals, and other customary closings. According to L-3, the transaction is expected to be completed early in 1999.

On the heels of the acquisition release, L-3 Communications announced that it intends to offer $150 million of senior subordinated notes due 2008 in a private placement. Proceeds from the offering will be used to reduce indebtedness under L-3's senior credit facilities and for general corporate purposes, including acquisitions.