BETHESDA, Md., Aug. 16, 2016 /PRNewswire/ -- Lockheed
Martin (NYSE: LMT) has completed the separation of its Information
Systems & Global Solutions (IS&GS) business segment and
merged it with a subsidiary of Leidos Holdings, Inc. (NYSE: LDOS).
The transaction concludes Lockheed Martin's portfolio reshaping
strategy announced last year and was finalized through a
tax-efficient Reverse Morris Trust transaction.
The merger creates tangible value for both businesses. It will
enable Lockheed Martin to reinforce its heritage in aerospace and
defense and deliver more value to stockholders. As for the newly
combined company, it will offer a broader and more affordable
portfolio of capabilities and services to customers.
"This strategic transaction enhances our competitive posture in
our core aerospace and defense markets and increases the value we
deliver to our stockholders," said Lockheed Martin Chairman,
President and CEO Marillyn Hewson.
"As we position our company for the future, this action will enable
us to focus our business growth strategy, align our technology
investments and increase the value we deliver to customers
worldwide."
The closing of the merger followed the expiration of the
exchange offer and the satisfaction of certain other conditions. As
part of the transaction, Lockheed Martin received a $1.8 billion special cash payment, which the
Corporation will use to repay debt, pay dividends, and/or
repurchase its stock. As a result of the exchange offer, Lockheed
Martin reduced outstanding shares of its common stock by 9,369,694
shares, or approximately 3% of the outstanding common shares.
Lockheed Martin stockholders who participated in the exchange offer
received an approximately 50.5 percent stake in Leidos
(approximately 77 million shares of Leidos common stock). The
special cash payment, plus the shares of Leidos common stock to be
received by participating Lockheed Martin stockholders (valued
based on Leidos' August 15 closing
price adjusted for the $13.64 per
share Leidos special dividend to be paid), results in an aggregate
transaction value of approximately $4.6
billion.
Preliminary Results of Exchange Offer
Lockheed Martin stockholders had an opportunity to exchange
their shares of Lockheed Martin common stock for shares of Abacus
Innovations Corporation (Abacus), a wholly owned subsidiary of
Lockheed Martin created to facilitate the transaction, which
automatically converted into the right to receive shares of Leidos
common stock at the close of the transaction. The final exchange
ratio for the exchange offer was set at 8.2136 shares of common
stock of Abacus for each share of Lockheed Martin common stock.
Each share of Abacus common stock was converted in the merger into
one share of Leidos common stock. As a result, Lockheed
Martin stockholders who tendered and did not properly withdraw
their shares of Lockheed Martin common stock in the exchange offer
received approximately 8.2136 shares of Leidos common stock
(subject to the receipt of cash in lieu of fractional shares) for
each share of Lockheed Martin common stock accepted for
exchange.
Pursuant to the exchange offer, which expired today at
8:00 a.m. EDT, Lockheed Martin
accepted 9,369,694 shares of Lockheed Martin common stock in
exchange for the 76,958,918 shares of Abacus common stock owned by
Lockheed Martin, which represent all of the outstanding shares of
Abacus.
Because more than 9,369,694 shares of Lockheed Martin common
stock were validly tendered and not properly withdrawn in the
exchange offer, the exchange offer was oversubscribed and all
shares of Abacus common stock owned by Lockheed Martin were
distributed in the exchange offer. As a result of the
oversubscription, it was not necessary to distribute shares of
Abacus common stock to Lockheed Martin stockholders as a pro rata
dividend. Earlier today, Lockheed Martin announced a preliminary
proration factor of approximately 8.01 percent.
For additional information, visit our website:
www.lockheedmartin.com.
About Lockheed Martin
Headquartered in Bethesda, Maryland, Lockheed Martin is a
global security and aerospace company that employs approximately
98,000 people worldwide and is principally engaged in the research,
design, development, manufacture, integration and sustainment of
advanced technology systems, products and services.
Cautionary Statement Regarding Forward Looking
Statements
The forward looking statements contained in this document
involve risks and uncertainties that may affect Lockheed Martin's
and Leidos' operations, markets, products, services, prices and
other factors as discussed in filings with the SEC. These risks and
uncertainties include, but are not limited to, economic,
competitive, legal, governmental and technological factors.
Accordingly, there is no assurance that the expectations of either
company will be realized. This document also contains statements
about the completion of the transaction to separate Lockheed
Martin's Information Systems & Global Solutions business
segment and combine this business with Leidos in a Reverse Morris
Trust transaction (the "Transaction"). Many factors could cause
actual results to differ materially from these forward-looking
statements with respect to the Transaction, including risks
relating to the Transaction, including anticipated tax treatment,
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies for the management, expansion and growth of
the new combined company's operations, Leidos' ability to integrate
the businesses successfully and to achieve anticipated synergies,
and the risk that disruptions from the Transaction will harm
Lockheed Martin's or Leidos' business. While the list of factors
presented here is considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on Lockheed
Martin's or Leidos' consolidated financial condition, results of
operations or liquidity. For a discussion identifying additional
important factors that could cause actual results to vary
materially from those anticipated in the forward-looking
statements, see Lockheed Martin's and Leidos' filings with the SEC,
including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors" in Lockheed
Martin's annual report on Form 10-K for the year ended December 31, 2015 and in Leidos' transition
report on Form 10-K for the 11-month period ended January 1, 2016 and quarterly reports on Form
10-Q which are available on the respective companies' websites at
http://www.leidos.com (Leidos) and http://www.lockheedmartin.com
(Lockheed Martin) and at the SEC's website
at http://www.sec.gov. Neither Lockheed Martin nor
Leidos assumes any obligation to provide revisions or updates to
any forward-looking statements should circumstances change, except
as otherwise required by securities and other applicable laws.
Additional Information and Where to Find It
In
connection with the proposed transaction, Abacus Innovations
Corporation, a wholly-owned subsidiary of Lockheed Martin created
for the transaction ("Abacus"), has filed with the SEC a
registration statement on Form S-4 and Form S-1 containing a
prospectus and Leidos has filed with the SEC a registration
statement on Form S-4 containing a prospectus. Lockheed Martin has
filed a Tender Offer Statement on Schedule TO which more fully
describes the terms and conditions of the exchange offer. INVESTORS
AND SECURITY HOLDERS ARE ADVISED TO READ THE REGISTRATION
STATEMENTS/PROSPECTUSES AND ANY AMENDMENTS WHEN THEY BECOME
AVAILABLE AS WELL AS ANY OTHER RELEVANT DOCUMENTS, INCLUDING
FILINGS WITH THE SEC INCORPORATED INTO THE REGISTRATION
STATEMENTS/PROSPECTUSES, BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE PARTIES AND THE PROPOSED TRANSACTION. Investors and
security holders may obtain a free copy of the prospectuses and
other documents filed with the SEC by Lockheed Martin, Abacus and
Leidos at the SEC's website at http://www.sec.gov. Free copies
of these documents and each of the companies' other filings with
the SEC, also may be obtained from the respective companies'
websites at http://www.leidos.com (Leidos) and
http://www.lockheedmartin.com (Lockheed Martin).
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
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SOURCE Lockheed Martin