Summary
L3Harris Technologies, Inc. (formerly Harris Corporation) announced on January 27, 2017, that it has entered into a definitive agreement to divest its government IT services business to Veritas Capital for $690 million in cash. This strategic move is aimed at optimizing the company's portfolio and reallocating capital. The proceeds from this sale are intended to bolster the company's capital allocation strategy, which includes pension pre-funding and share repurchases, thereby potentially enhancing shareholder value. The divestiture is contingent upon regulatory approval and other customary closing conditions, with an anticipated closing before the end of Harris' fiscal year 2017. While the sale of the government IT services business and the recent divestiture of Harris CapRock Communications are expected to be a net dilutive to fiscal 2018 earnings per share in the range of $0.10 to $0.15, the company views these actions as beneficial for long-term strategic positioning and financial flexibility.
Key Highlights
- 1Harris Corporation has agreed to sell its government IT services business to Veritas Capital for $690 million in cash.
- 2The transaction is expected to close before the end of fiscal year 2017, subject to regulatory and customary closing conditions.
- 3Proceeds from the sale will be used to support capital allocation strategies, including pension pre-funding and share repurchases.
- 4The company anticipates a net dilution to fiscal year 2018 earnings per share between $0.10 and $0.15 due to the divestiture and related restructuring actions.
- 5This sale follows the recent divestiture of the Harris CapRock Communications commercial business, indicating a strategic portfolio optimization effort.
- 6The information was disclosed via a press release furnished as an exhibit to the 8-K filing.