BOEING <BA> TO ACQUIRE DEFENSE ELECTRONICS FIRM
Boeing Co and ARGOSystems Inc <ARGI.O>
said they reached an agreement for Boeing to acquire the
Sunnyvale, Calif., defense electronics firm for about 275 mln
dlrs.
    The boards of both companies have approved the merger,
which will be accomplished through a tender offer by a Boeing
subsidiary of 37 dlrs a share cash for all of ARGOSystems'
shares, the companies said.
    Under the agreement, the Boeing subsidiary, TBC Holdings
Corp, will begin the tender offer promptly. If at least 90 pct
of the shares are not tendered, the offer will be prorated to
49 pct, the companies said.
    ARGOSystems has granted Boeing an option to buy 1,238,311
shares or 18.5 pct of the outstanding stock for 37 dlrs a
share, they said.
    Also, Bill May, chairman of ARGOSystems, and three other
officers have granted Boeing an option to buy their shares,
another 8.9 pct of the outstanding stock, for 37 dlrs a share.
    ARGOSystems makes equipment to monitor and analyze military
communications signals, electronic warfare equipment to monitor
and jam radar signals and signal processing systems.
    For the nine months ended March 31, 1987, ARGOSystems
reported earnings more than doubled to 6.3 mln dlrs or 95 cts a
share from 3.1 mln dlrs or 46 cts. The year-ago period included
a 2.2 mln dlr charge from a writedown of securities. Sales rose
23.5 pct to 70.9 mln dlrs.
    Sales are expected to exceed 100 mln dlrs for the fiscal
year ending June 30, the companies said in a joint statement.
    The company's backlog is currently more than 180 mln dlrs,
they said. It has about 1,200 employees.
    About 30 pct of ARGOSystems' business comes from
international customers.
    "ARGOSystems is a clear leader in its field. This
association will expand our overall activities and
significantly enhance our ability to compete in the defense
electronics area," Boeing president Frank Shrontz said in a
statement.
    ARGOSystems will operate as a wholly owned subsidiary of
Boeing Co.
    The merger following the tender offer will be subject to
approval by ARGOSystems shareholders, the companies said.
    The tender offer and merger are subject to customary
conditions and expiration of the Hart-Scott-Rodino notification
waiting period, they said.
 Reuter
