L3Harris Completes Sale of Non-Core Assets to an Affiliate of Kanders & Company, Inc. for $200 Million

Rhea-AI Summary

L3Harris Technologies (NYSE:LHX) has completed the sale of its antenna and related businesses to an affiliate of Kanders & Company, Inc. for $200 million. This strategic divestiture aligns with L3Harris’ focus on refining its portfolio by shedding non-core assets. The transaction breakdown includes $175 million in cash and a $25 million seller note. The divested businesses, previously under the Space & Airborne Systems segment, employed around 375 people. The proceeds from this transaction will be utilized in line with L3Harris' capital allocation plans.

Positive

• Sale of non-core assets for $200 million aids strategic portfolio refinement.
• Transaction includes $175 million in cash, enhancing liquidity.
• Proceeds to be used according to capital allocation plans, potentially benefiting shareholders.

Negative

• Divestiture could reduce revenue streams from the Space & Airborne Systems segment.
• Loss of approximately 375 employees might impact operational capabilities.

Insights

Financial Analyst

L3Harris Technologies' sale of non-core assets, amounting to $200 million, fits into a broader strategy of streamlining their portfolio. From a financial standpoint, this divestiture benefits L3Harris by liquidating assets that may not align with their core competencies, thereby optimizing their operational focus. The proceeds, including $175 million in cash and a $25 million seller note, provide liquidity that can be used for strategic investments, debt reduction, or shareholder returns. For retail investors, this move could indicate a more focused business approach, potentially leading to improved profit margins and efficiency.

Moreover, the sale price of $200 million suggests these assets were not central to their revenue generation, likely making the financial impact on their top line minimal. This is a positive sign that the company is proactively managing its portfolio, which could lead to higher returns on invested capital.

Market Research Analyst

From a market perspective, this transaction highlights L3Harris' commitment to focusing on its core operations. By divesting non-core assets related to the Space & Airborne Systems segment, the company can allocate resources more efficiently towards growth areas. This could position L3Harris better against competitors who may have a more fragmented portfolio.

It's also worth noting that the assets sold only employed around 375 people, suggesting that L3Harris is honing in on more scalable and potentially higher-margin areas of their business. For investors, such strategic moves often indicate a disciplined approach towards achieving long-term growth and sustainability, which could enhance overall shareholder value.

MELBOURNE, Fla.--(BUSINESS WIRE)-- L3Harris Technologies (NYSE:LHX) has completed its sale of the company’s antenna and related businesses to an affiliate of Kanders & Company, Inc. for $200 million.

The deal aligns with L3Harris’ portfolio-shaping strategy of divesting non-core assets, with transaction proceeds to be used consistent with capital allocation plans. The transaction includes $175 million in cash and a $25 million seller note.

The businesses L3Harris divested were part of the company’s Space & Airborne Systems segment and employed approximately 375 people.

About L3Harris Technologies

L3Harris Technologies is the Trusted Disruptor in the defense industry. With customers’ mission-critical needs always in mind, our ~50,000 employees deliver end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security.

About Kanders & Company, Inc.

Kanders & Company, Inc. based in Palm Beach, FL, is a single-family office owned and controlled by Warren B. Kanders. Mr. Kanders has more than 30 years of experience investing in public and private companies across a variety of sectors, acting as an active strategic partner for enhancing operating discipline and catalyzing long-term growth.

Forward-Looking Statements

This press release contains forward-looking statements that reflect management's current expectations, assumptions and estimates of future performance and economic conditions. Such statements are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. L3Harris cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Statements about capital allocation plans are forward-looking and involve risks and uncertainties. L3Harris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603571184/en/

Daniel Gittsovich

Investor Relations

InvestorRelations@L3Harris.com

321-724-3170

Sara Banda

Corporate Media Relations

Media@L3Harris.com

321-306-8927

Source: L3Harris Technologies

FAQ

What was the value of L3Harris' recent asset sale?

L3Harris sold its antenna and related businesses for $200 million.

When did L3Harris complete the sale of its antenna business?

L3Harris completed the sale recently as per the latest press release.

Who purchased L3Harris' antenna and related businesses?

An affiliate of Kanders & Company, Inc. purchased the businesses.

How will L3Harris use the proceeds from the sale?

L3Harris will use the proceeds in line with its capital allocation plans.

What segment of L3Harris was affected by the sale?

The sale affected the Space & Airborne Systems segment of L3Harris.

How much cash did L3Harris receive from the transaction?

L3Harris received $175 million in cash from the transaction.

How many employees were affected by L3Harris' sale of its antenna business?

Approximately 375 employees were affected by the sale.