Decision attributed to unfavorable market conditions
Kate Andrews //March 25, 2021//
Decision attributed to unfavorable market conditions
Kate Andrews // March 25, 2021//
Arlington-based Leonardo DRS Inc., a subsidiary of Italian defense contractor Leonardo SpA, is hitting the brakes on its initial public offering, its parent company announced Wednesday. No future IPO date was announced.
The company attributed its decision to “adverse market conditions” that “did not allow an adequate valuation of DRS,” according to a news release. “DRS remains a core part of Leonardo’s business portfolio and the IPO will potentially be revisited when market conditions are more favorable and a successful IPO at an appropriate valuation for this strategic business can be achieved.”
The company added that it has filed a registration statement with the Securities and Exchange Commission but that it has not yet become effective, meaning that the securities cannot be sold until it goes into effect.
Earlier this month, Leonardo announced it would list a minority stake of Leonardo DRS on the New York Stock Exchange, with the IPO valued at $2.54 billion. Leonardo US would remain the majority shareholder of Leonardo DRS, and the company was expected to enter a proxy agreement with the U.S. Department of Defense to allow Leonardo DRS to continue to compete and perform on classified programs.
Leonardo DRS is the largest U.S. subsidiary of the Italian defense/aerospace conglomerate and is a military defense tech contractor with $2 billion in annual revenue. The company works with customers including the U.S. Army, Navy and intelligence community. In 2020, the company won a $120 million U.S. Navy contract to provide engineering design and software testing for aircraft protection systems.