Harris Corporation (News - Alert), an international communications and information technology company serving government and commercial markets, has signed an agreement to sell its Broadcast Communications Group to The Gores Group affiliate.
The transaction is valued at $225 million, which includes $160 million in cash at closing, a $15 million subordinated promissory note and an earnout of up to $50 million based on future performance. Harris first announced plans to divest Broadcast Communications on May 1, 2013.
“In Harris Broadcast Communications, we are investing in a proven technology leader with great products and a great team. We are excited to provide the capital and support to transition this division to a strong and independent company further enabling it to continue developing and delivering market leading technologies to its customers,” said Ryan Wald, managing director of The Gores Group, in a statement.
Headquartered in Melbourne, Florida, Harris is reported to have approximately $5.5 billion of annual revenue and about 15,000 employees.
“The sale of Broadcast Communications reflects our strategy to optimize our business portfolio and focus on our core businesses,” said William M. Brown, president and chief executive officer of Harris. “As previously communicated, we plan to repurchase up to $200 million of our shares after the deal closes. This is in addition to the $200 million of share repurchases already planned for fiscal 2013 and reflects our ongoing commitment to effectively deploy capital, including returning cash to shareholders."
The transaction is subject to customary regulatory review and closing conditions and is expected to be completed in early calendar year 2013, company officials said.
Recently Harris Corporation announced it has received an $11 million order from the Ministry of Defense of a NATO country for the Falcon III Secure Personal Radio (SPR). According to the terms of the agreement, Harris will be providing the RF-7800S SPR to this nation’s armed forces.