BAE Systems, the U.K. defense-and-aerospace group, announced on Thursday that it has reached an agreement to purchase Ball Corp.’s aerospace business for a cash amount of $5.55 billion. The transaction is expected to be completed in the first half of 2024, pending customary regulatory approvals and conditions.
Strengthening the Portfolio with Ball Aerospace
BAE Systems considers the acquisition of Ball Aerospace, based in Colorado, as a significant opportunity to enhance its portfolio. Ball Aerospace specializes in providing spacecraft, mission payloads, optical systems, and antenna systems. The company offers high revenue visibility and possesses a strong growth outlook.
Impressive Financial and Growth Prospects
BAE Systems anticipates that Ball Aerospace will generate approximately $2.2 billion in revenue and achieve adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $310 million in 2023. Moreover, it forecasts a remarkable compound annual growth rate of around 10% for the next five years, with promising growth prospects even beyond that period.
Funding the Acquisition
To finance the proposed acquisition, BAE Systems will utilize a combination of newly obtained external debt and its existing cash resources.