Summary
L3Harris Technologies, Inc. (formerly Harris Corporation) filed an 8-K on February 8, 2013, to report the completion of the sale of its Broadcast Communications Division. This divestiture was finalized on February 4, 2013, with the division being sold to HBC Solutions, Inc., an affiliate of The Gores Group, LLC. The transaction's total purchase consideration was structured to be $225 million, comprising cash, a subordinated promissory note, and a potential earnout based on future performance. This sale represents a strategic move for Harris Corporation, allowing the company to focus on its core business areas. Investors should note the financial implications, including the cash proceeds received and the elimination of the Broadcast Communications Division's assets and liabilities from Harris's balance sheet. The company has indicated that the division's financial results were already presented as discontinued operations, simplifying the reporting of this event.
Key Highlights
- 1Completion of the sale of Harris Corporation's Broadcast Communications Division on February 4, 2013.
- 2The buyer is HBC Solutions, Inc., an affiliate of The Gores Group, LLC.
- 3Total purchase consideration agreed upon is $225 million.
- 4The consideration includes $160 million in cash (subject to adjustments), a $15 million subordinated promissory note, and an earnout of up to $50 million.
- 5Harris Corporation received approximately $149 million in cash at closing after estimated adjustments for cash, indebtedness, and working capital.
- 6The division's assets and liabilities were already reported as discontinued operations in prior financial statements.
- 7No pro forma financial statements were included as the division was already segregated in financial reporting.