MILPLEX
L-3 Communications To Acquire General Dynamics Propulsion Systems
New York NY (SPX) Dec 02, 2004
L-3 Communications announced Tuesday that it has agreed to acquire the Propulsion Systems business unit of General Dynamics for $185 million in cash. Propulsion Systems is expected to add approximately $155 million to L-3's sales in 2005 and be accretive to L-3's results of operations. The acquisition is expected to be completed in the first quarter of 2005.

Headquartered in Muskegon, MI, Propulsion Systems is a recognized market leader in the engineering, design and manufacture of engines, transmissions, suspension and turret drive systems for combat vehicles, including both tracked and wheeled vehicles.

The business is also a production center for Abrams tank components. Propulsion Systems supports both domestic and international vehicle customers, including programs for Singapore and South Korea.

"Propulsion Systems has had a 40-year tradition as a major player in the military land systems market," said Frank C. Lanza, chairman and chief executive officer of L-3 Communications.

"The business has had an historical and continued presence on strong programs in core areas, including the Bradley, Abrams and the M1A1."

Mr. Lanza noted that Propulsion Systems has a large installed customer base of approximately 30,000 vehicles worldwide.

"We expect this base will provide a solid platform for continued growth and there are also significant growth opportunities in the international market as well. This business also expands our operations and maintenance capabilities into the land systems market and helps us to provide more capability to our customers."

Mr. Lanza noted that Propulsion Systems has developed several diesel engine and transmission series that are well known in the industry for reliability, capability and cost-effectiveness, and that the business works closely with several leading engine manufacturers to achieve optimal mobility for tracked combat vehicles.

The company's advanced gun and turret drive systems components are used on such programs as the Stryker Mobile Gun System (MGS), the Opposing Force Surrogate Vehicle and the Avenger Air Defense System. Additionally, the business is developing upgrades as part of the spiral performance improvements for the transformation of the U.S. Army.

L-3 Communications