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LYNCHBURG, Va. & MELBOURNE, Fla. – BWX Technologies, Inc. (NYSE: NYSE:BWXT) has agreed to purchase the Aerojet Ordnance Tennessee, Inc. (A.O.T.) business from L3Harris Technologies, Inc. (NYSE: NYSE:LHX) for approximately $100 million. The transaction, which is expected to close by the end of the year, will see BWXT acquiring a leading provider of advanced specialty materials and high-strength alloy manufacturing, including depleted uranium engineered products.
A.O.T.'s inclusion is set to bolster BWXT’s capabilities in developing and manufacturing advanced materials for commercial, military, and space applications. "This acquisition marks a significant step in our growth strategy," said Rex Geveden, BWXT’s president and CEO. He noted that A.O.T.’s technical expertise would create greater opportunities for the company and enhance its offerings to customers.
The business being acquired has reported revenue of around $40 million over the past twelve months and is the sole provider of depleted uranium to the U.S. government. It also produces specialized materials such as tungsten and titanium, among others. The acquisition is anticipated to be slightly accretive to BWXT’s earnings, excluding one-time costs, within 12-18 months post-acquisition.
Ken Bedingfield, CFO of L3Harris, remarked that the sale reflects their strategy to optimize their portfolio and fulfill commitments to customers and shareholders.
The deal is subject to regulatory approvals and other customary closing conditions. While the press release includes forward-looking statements regarding the anticipated benefits and future revenues from the acquisition, these are subject to various risks and uncertainties, including the ability to integrate A.O.T. into BWXT and obtain necessary approvals.
BWXT is a Fortune 1000 company and a recognized innovator in manufacturing and engineering, providing nuclear solutions for various applications, including global security and space exploration. L3Harris Technologies is known for delivering technology solutions for national security across multiple domains.
The information for this article is based on a press release statement.
In other recent news, BWX Technologies, Inc. has reported significant growth in its second-quarter earnings, with an increase in organic revenue, adjusted EBITDA, and adjusted earnings per share, which rose by 26% to $0.82. This strong performance led to a revision of the lower end of its earnings per share outlook for the year. The company's subsidiary, Nuclear Fuel Services, Inc., has been awarded a contract by the U.S. Department of Energy to provide High-Assay Low-Enriched Uranium deconversion services. In addition, BWXT secured a contract from the National Nuclear Security Administration to conduct an engineering study aimed at establishing a pilot plant for domestic uranium enrichment. In the realm of corporate social responsibility, BWXT recently donated $100,000 to the Unicoi County United Way to support recovery from the destructive floods caused by Hurricane Helene. These are recent developments reflecting the company's continuous efforts to adapt to market demands and anticipate a dynamic future in the nuclear industry.
InvestingPro Insights
As BWXT moves to acquire Aerojet Ordnance Tennessee, Inc., recent financial data from InvestingPro sheds light on the company's current position. BWXT's market capitalization stands at $10.9 billion, reflecting its significant presence in the industry. The company has demonstrated strong revenue growth, with an 11.69% increase in the last twelve months as of Q2 2024, aligning with its strategic expansion through acquisitions like A.O.T.
InvestingPro Tips highlight BWXT's financial strength and growth trajectory. The company has maintained dividend payments for 13 consecutive years and has raised its dividend for 8 consecutive years, indicating a commitment to shareholder returns. This consistent dividend policy could be attractive to investors looking for stable income alongside the potential growth from acquisitions like A.O.T.
Additionally, BWXT has shown a strong return over the last year, with a 62.69% price total return. This performance, coupled with the company's strategic moves, suggests that BWXT is positioning itself for continued growth in its core markets of national security and space exploration.
It's worth noting that InvestingPro lists 16 additional tips for BWXT, offering a more comprehensive analysis for investors seeking deeper insights into the company's financial health and market position.
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