Raytheon Buys Applied Signal for $490M

12/20/10Follow @gthuang

A pretty big merger in defense tech this morning. Waltham, MA-based Raytheon (NYSE: RTN) announced it has agreed to acquire Sunnyvale, CA-based Applied Signal Technology (NASDAQ: APSG) for $38 per share—about $490 million in cash. The deal is slated to close in the first quarter of 2011, and is not expected to have a material effect on Raytheon’s earnings.

Defense contractor Raytheon made the acquisition to complement its intelligence, surveillance, and reconnaissance technologies, said CEO and chairman William Swanson, in a statement.

Applied Signal, which makes communications, analytics software, and cyberwarfare technologies primarily for government agencies, will be integrated into Raytheon’s Space and Airborne Systems business unit. Advanced sensor systems will be a particular area of interest for the two companies as they move forward together.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang