Business Acquisition

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

On June 21, 2022, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RADA, a leading Israel-based provider of small-form tactical radar, for an all-stock merger, with RADA surviving as a wholly owned subsidiary of the Company. The Company acquired RADA as part of the Company’s goal to become a market leader in advanced sensing and force protection.

The acquisition of RADA has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company as the accounting acquirer, which requires the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The acquisition was completed on November 28, 2022, when each issued and outstanding ordinary share of RADA was converted and exchanged for one share of common stock of the Company.

The total purchase consideration for RADA was $511 million and is comprised of the Company’s shares of common stock issued in exchange for all issued and outstanding ordinary shares of RADA, as well as the portion of replacement stock compensation awards’ fair value attributable to pre-combination services.

The Company recognized transaction costs of $27 million in the year ended December 31, 2022. These costs were associated with advisory, legal, and consulting services and are presented in general and administrative expense in the Consolidated Statements of Earnings.

Purchase consideration - The following summarizes the purchase consideration transferred to RADA shareholders:


(in millions, except per share data)
RADA ordinary shares outstanding as of November 28, 2022	50
Share exchange ratio	1
Total Company shares issued	50
Fair value of the Company common stock (RADA share price on November 28, 2022)	$	9.87
Total fair value of the Company common stock issued	$	491
Replacement share-based payment awards pre-combination vesting expense	20
Aggregate purchase consideration	$	511

Purchase price allocation - The allocation of the purchase consideration to assets acquired and liabilities assumed is based on the estimated fair values as follows:


(Dollars in millions)
Assets:
Cash and cash equivalents	$	19
Accounts receivable, net	12
Inventories	72
Prepaid expenses	3
Other current assets	4
Property, plant and equipment, net	26
Intangible assets	131
Other noncurrent assets	14
Total identifiable assets acquired	$	281
Liabilities:
Accounts payable	$	6
Contract liabilities	2
Other current liabilities	21
Deferred tax liabilities	5
Other noncurrent liabilities	22
Total liabilities assumed	$	56
Net assets acquired, excluding goodwill	$	225
Goodwill	$	286

During 2023, the Company completed the purchase price allocation for this transaction and adjusted the preliminary purchase price allocation to increase other current liabilities and goodwill by $2 million. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Identifiable intangibles assets of $131 million consist of $90 million of technology related assets while the remaining $41 million consists of customer and contractual relationships. The goodwill of $286 million arising from the acquisition is primarily attributable to the growth opportunities related to the RADA business. None of the goodwill resulting from the acquisition is deductible for tax purposes. All of the goodwill recognized related to the RADA acquisition was assigned to the ASC segment.