Harris Corp. to acquire Exelis for $4.75 billion

Florida-based government contractor Harris has agreed to purchase McLean-based Exelis Inc. in a $4.75 billion deal.

The agreement, subject to regulatory approvals and by approval Exelis shareholders, is expected to close in June.

Combined, the companies will have more than $8 billion in revenue and 23,000 employees around the world. Under terms of the deal, for each Exelis share they own, Exelis shareholders will receive $16.625 in cash and 0.0125 of a share of Harris common stock, based on the closing price of $69.49 on Feb 5.

Upon closing, Harris shareholders will own about 85 percent of the company, and Exelis shareholdrs will have about 15 percent.

Harris has secured $3.4 billion of bridge financing from Morgan Stanley Senior Funding Inc. and expects to put in place permanent financing through term loans and unsecured bonds by closing.

The combined company will have executive leadership from senior members of both organizations, but the company did not specify specific roles. Executives also have not said where the firm will be headquartered following the acquisition.

Harris, based in Melbourne, Fla., is a communications and information technology company that serves both government and commercial markets. Exelis is a global aerospace, defense and information and services company. Last year it spun off its missions systems company into a separate publicly traded company.