Kratos to buy Henry Brothers for $45 million

 - 
10/06/2010

Henry Brothers announced this morning that it's selling to Kratos Defense & Security Solutions (Nasdaq: KTOS) for $45 million in cash, or $7.00 per share. The deal is expected to close by the end of the year.

The deal is subject to shareholder approval, but, according to the release, Jim Henry and all other directors of HBE, who together own 60 percent  of HBE's shares outstanding, will vote their shares in favor of the anticipated merger. Henry has also "committed to purchase Kratos common stock in the open market at prevailing market prices using a portion of his share of the proceeds from the merger following the transaction closing." 

Imperial Capital LLC advised HBE on the deal and "rendered a fairness opinion to the HBE board of directors in connection with the approval of the transaction by the board."

Here's an official statement from Jim Henry: "This transaction combines two leaders in the defense and security solutions market, creating a great opportunity for our organization, customers and shareholders. As a much larger organization, the combined company will be better able to establish a presence in targeted markets with the potential for significant growth opportunities, as well as enhanced service opportunities in certain key markets and industries."

An an official statment from Eric DeMarco, Kratos' President and CEO: "Henry Brothers is clearly one of the premier Homeland and National Security Solution Providers and Command and Control Center Design Engineering and Operators in the industry today.  We see the opportunity for significant cross selling between the two businesses, including for Henry Brothers' proprietary first responder communications products and solutions.  Additionally, we see the opportunity to cross sell into HBE's large and established customer base Kratos' NeuralStar and DopplerVue situational awareness, security network management, protection and cybersecurity software products."

I've got calls into Jim Henry and John Mack at Imperial, will have more for you on our newswire tomorrow.