Boston, MA 04/04/2014 (wallstreetpr) – Mercury Systems Inc (NASDAQ:MRCY) which provides image and digital signal processing systems to defense and aerospace is said to be in tie-up discussions with commercial aircraft maker The Boeing Company (NYSE:BA).
Mercury has a market value of about $440 million and it is involved in data processing and software supply to a number of companies, mainly in the aerospace and defense industries. The company’s clients include Boeing, Raytheon Company (NYSE:RTN), Lockheed Martin Corp (NYSE:LMT) and Northrop Grumman Corp (NYSE:NOC). The company is also a supplier to defense manufacturer Argon ST, which Boeing purchased in 2010.
The business network and product lineup of Mercury have expanded in recent times. The company is adding more clients rapidly while churning out more products and services that match the needs of its clients in the defense and aerospace industries. This growth and opportunity may have caught the attention of Boeing.
Acquisition justification
A move to acquire Mercury will end up serving Boeing right. The company will be able to lower its costs related to acquisition of software and data processing systems. Moreover, the company will be able to expand its footprint in the business of providing components for commercial aerospace. Perhaps Boeing is also invited to Mercury Systems Inc (NASDAQ:MRCY) because of the latter’s microprocessor business which has potential for use in unmanned aerial vehicles.
No guarantee for a deal
The acquisition talks between Mercury Systems Inc (NASDAQ:MRCY) and Boeing are still at their early stages and things can move either way, meaning that a deal is not guaranteed so far. However, it is also reported that some private equity firms have also recently made preliminary offers to acquire Mercury. Perhaps this would mean that the company could still find a buyer if a deal with Boeing doesn’t materialize.
As if to confirm that indeed the company is keen on self auction, Mercury Systems Inc (NASDAQ:MRCY) is reported to have recently hired advisors to help with the sale whereby it seeks about $500 million from buyers. Sources revealed that Evercore Partners Inc (NYSE:EVR) is the firm advising Mercury through the sale process.
Mercury Systems Inc (NASDAQ:MRCY) released its fiscal 2014 second quarter results on January 28, reporting revenue of $53.1 million and net loss of $1 million.
