WALTHAM, Mass., April 20, 2015 /PRNewswire/ -- Raytheon
Company (NYSE: RTN) has entered into a definitive agreement with
Vista Equity Partners to form a new company combining Websense, a
Vista portfolio company, with Raytheon Cyber Products, a business
unit of Raytheon's Intelligence, Information and Services (IIS)
segment. The new company will leverage Raytheon's advanced
cybersecurity technologies and Websense's industry leading
TRITON® platform to provide a new level of defense-grade
cybersecurity to combat the evolving cyber threat environment.
"The market for advanced cyber solutions that protect and defend
global industry and infrastructure is rapidly growing due to the
sophisticated threats posed by well-funded, nation-state
adversaries and criminal networks. As the business enterprise
evolves to meet the networked demands of today's mobile and cloud
economy, these threats will grow in size and scale," said
Thomas A. Kennedy, Raytheon Company
Chairman and CEO. "The new joint venture will combine Raytheon
Cyber Products and Websense capabilities to deliver the advanced,
defense-grade technology solutions needed to meet this evolving
threat."
Following successful completion of the transaction, the new
company will be a separately reported Raytheon business segment.
The CEO of the new company will be John R.
McCormack, CEO of Websense. A Board of Directors will
be established for the new company and will include representatives
of both Raytheon and Vista Equity Partners.
"We believe the combination of Raytheon Cyber Products and
Websense creates a strong foundation for growth in the
cybersecurity market, especially in light of the combined
technical, product and multi-channel strengths each brings to the
table," said Brian Sheth, Co-founder
and President of Vista Equity Partners. "We are excited to invest
in this new venture as we clearly see its ability to accelerate
growth and create value for all parties."
"Commercial companies are evolving their infrastructure with
cloud computing, mobility and the internet of things to stay
competitive and, as a result, they have become more vulnerable than
ever," said David C. Wajsgras,
President of Raytheon Intelligence, Information and Services
business. "For nearly two decades, Raytheon has provided
cybersecurity technology and support to some of the world's largest
organizations, spanning government, retail and financial services.
I am pleased to welcome John
McCormack and the Websense team to Raytheon. Our joint
venture will deliver the power of TRITON®, a market
leading integrated security platform, with the strength of
SureView® software products to protect commercial
business across the globe."
"As a cybersecurity market leader, Websense provides a proven
technology platform, a team with depth and breadth of industry
experience, over 21,000 customers, and a delivery channel of over
2,200 partners," said John R.
McCormack, CEO of Websense. "The opportunity to provide our
growing customer base with Raytheon's patented technology positions
us to serve customers as they manage the emerging and long-term
cyber threat environment."
Joint Venture Formation
Raytheon's net cash
contribution is approximately $1.57
billion for an 80.3% ownership of the joint venture.
Raytheon will consolidate the results of the joint venture.
As part of the transaction, Raytheon will contribute
$1.9 billion (net of cash acquired)
to acquire Websense, of which $600
million will be in the form of an intercompany loan to the
joint venture. Raytheon will also contribute the assets of Raytheon
Cyber Products and related intellectual property, which is valued
at $400 million.
The $1.9 billion in cash plus
$400 million in value for Raytheon
Cyber Products results in an enterprise value for the venture of
$2.3 billion, with capitalization of
$1.7 billion in equity and
$600 million in intercompany debt to
Raytheon. Vista Equity will subsequently invest approximately
$335 million for a 19.7% equity stake
in the new company.
It is anticipated that the transaction will close in the second
quarter of 2015, subject to regulatory approvals and other closing
conditions.
Conference Call
A conference call to discuss the
acquisition will be held today, April 20,
2015 at 8:30 a.m. EDT.
Participants will include Thomas A.
Kennedy, Chairman and CEO of Raytheon; Anthony F. O'Brien, vice president and CFO of
Raytheon; David C. Wajsgras,
president of Raytheon's Intelligence, Information and Services
business and John R. McCormack, CEO
of Websense.
The dial-in number for the conference call will be (866)
825-3209 in the U.S. or (617) 213-8061 outside of the U.S. The
conference call will also be audiocast on the Internet at
www.raytheon.com/ir. Individuals may listen to the call and
download charts that will be used during the call. These charts
will be available for printing prior to the call.
Interested parties are encouraged to check the website ahead of
time to ensure their computers are configured for the audio stream.
Instructions for obtaining the free required downloadable software
are posted on the site.
Advisors
RBC Capital Markets LLC served as lead
financial advisor and Deutsche Bank Securities Inc. served as
co-advisor to Raytheon. Credit Suisse delivered a fairness opinion
to the Board of Directors of Raytheon in connection with the
transactions. Morgan Lewis &
Bockius LLP, Steptoe & Johnson LLP and Wilson Sonsini Goodrich & Rosati served as
legal advisors to Raytheon. Citi served as exclusive
financial advisor to Websense. Kirkland & Ellis LLP served as
legal advisor to Websense.
About Raytheon
Raytheon Company, with 2014 sales of
$23 billion and 61,000 employees
worldwide, is a technology and innovation leader specializing in
defense, security and civil markets throughout the world. With a
history of innovation spanning 93 years, Raytheon provides
state-of-the-art electronics, mission systems integration and other
capabilities in the areas of sensing; effects; and command,
control, communications and intelligence systems, as well as cyber
security and a broad range of mission support services. Raytheon is
headquartered in Waltham, Mass.
For more about Raytheon, visit us at www.raytheon.com and follow us
on Twitter @raytheon.
About Vista Equity Partners
Vista Equity Partners, a U.S.-based private equity firm with
offices in Austin, Chicago and San
Francisco, with more than $14
billion in cumulative capital commitments, currently invests
in software, data and technology-based organizations led by
world-class management teams with long-term perspective. Vista is a
value-added investor, contributing professional expertise and
multi-level support towards companies realizing their full
potential. Vista's investment approach is anchored by a sizable
long-term capital base, experience in structuring
technology-oriented transactions, and proven management techniques
that yield flexibility and opportunity in private equity investing.
For more information, please visit www.vistaequitypartners.com.
About Websense
Websense is a global leader in
protecting organizations from the latest cyber-attacks and data
theft. Websense TRITON® APX provides advanced, adaptive cyber
security that protects critical data wherever it resides and gives
actionable intelligence across the entire threat lifecycle.
Websense comprehensive security solutions unify web, email, mobile,
data and endpoint security to prevent data theft. More than 21,000
organizations across 155 countries rely on Websense to stop
advanced persistent threats, targeted attacks and evolving malware.
A global network of channel partners distributes, deploys and
supports Websense solutions.
Disclosure Regarding Forward-Looking Statements
This
release contains forward-looking statements, including information
regarding the future performance of the joint venture and its
business prospects, growth of the cybersecurity market, and the
anticipated timing of closing of the transaction. These
forward-looking statements are not statements of historical facts
and represent only the Company's current expectations regarding
such matters. These statements inherently involve a wide
range of known and unknown risks and uncertainties. The
Company's actual actions and results could differ materially from
what is expressed or implied by these statements. Specific
factors that could cause such a difference include, but are not
limited to: the satisfaction of closing conditions for the
transactions, including receipt of regulatory approvals; the
parties' ability to successfully integrate and operate the new
company, and achieve expected synergies and other benefits; the
ability to attract and retain key employees of the new company; the
impact of competition; the ability to develop products and
technologies; the impact of changes in the financial markets and
global economic conditions; risks of an impairment of goodwill or
other intangible assets; and other factors as may be detailed from
time to time in the Company's public announcements and Securities
and Exchange Commission filings. The Company undertakes no
obligation to make any revisions to the forward-looking statements
contained in this release and the attachments or to update them to
reflect events or circumstances occurring after the date of this
release, including any acquisitions, dispositions or other business
arrangements that may be announced or closed after such date,
except as required by law.
Contacts
Media
Pam Erickson
+1.781-522-5822
pam.erickson@raytheon.com
Investors
Todd
Ernst
+1.781-522-5141
todd.ernst@raytheon.com
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SOURCE Raytheon Company