Boeing buys 2 Fayette plants
Argon ST, which operates two plants in Fayette County, announced Wednesday it is being bought by the Boeing Co. “We’re very pleased to join the Boeing Co.,” Dr. Terry Collins, Argon ST chairman and chief executive officer, stated in a press release. “Our employee teams know each other well, and we are excited to now continue our combined support to our war fighters and first-responders as one company.”
Boeing will pay $775 million for the combat engineering company that is headquartered in Fairfax, Va. Argon ST operates a testing facility on Connellsville Road, Uniontown, and a plant in the Fayette Business Park near Smithfield. The company employs nearly 100 people at its two Fayette locations.
Argon ST Inc. designs, develops, and produces systems and sensors for the command, control, communications, computers, combat systems, intelligence, surveillance and reconnaissance (C5ISR) markets.
Argon ST was created in October 2004 with the merger of SenSyTech Inc. and Argon Engineering Associates. The company opened its Smithfield plant in August 2003.
The Smithfield Argon ST plant referred calls to its headquarters in Fairfax, Va. However, those calls requesting information on the future of the Fayette operations were not returned Wednesday.
“The announcement is great news for Fayette County and the employees of Argon ST in Smithfield,” U.S. said U.S. Rep. Mark Critz, D-Johnstown.
“Boeing is one of the leading aerospace defense companies in the world. By purchasing Argon ST and the facilities in Fayette County, Boeing will not only acquire cutting-edge technology to help our war fighters communicate and share information on the battlefield, but they will be highlighting Fayette and its workforce on the national stage. That will, hopefully, attract other companies to join suit and take advantage of the workforce in Fayette County,” Critz said.
According to the press release Argon ST issued, once acquired, Argon ST will be a stand-alone subsidiary of Boeing and a new division of Boeing Network & Space Systems, a business within the Boeing Defense, Space and Security operating unit. Collins and his management team will continue to lead Argon ST.
“Combining the strength of Boeing with the experience of Argon ST will significantly accelerate our capabilities in sensors, communications technologies and information management,” said Dennis Muilenburg, president and CEO of Boeing Defense, Space and Security. “Today’s announcement follows two years of partnering with Argon ST’s talented employees who, like Boeing employees, take pride in developing and deploying world-class engineering solutions for our customers.”
Founded in 1997, Argon ST develops sensors and networks designed to exploit, analyze and deliver information for real-time situational awareness. In fiscal 2009, the company generated $366 million in revenues. In addition to its local sites, Argon ST has operating locations in Virginia, California, Michigan, Doylestown, Pa., Florida, Maryland and Texas, and has about 1,000 employees.
The completion of the transaction is subject to a majority of the outstanding Argon ST shares being tendered, as well as satisfactory completion of other customary closing conditions, including U.S. regulatory approval.
Argon ST’s board of directors approved the definitive agreement, and Argon ST’s board intends to recommend that the company’s stockholders tender their shares in the offer.
Boeing expects to close the purchase by the end of September.
According to Associated Press, the purchase reflects a shift by defense contractors seeking to accommodate a Pentagon that now wants high-tech intelligence tools as much or more than big guns and heavy armor.
The Pentagon is cutting some big weapons meant for conventional wars out of the budget while it shops for technology better suited to fight against shadowy insurgent groups in places such as Iraq and Afghanistan.
Boeing’s offer of $34.50 per share is a 41 percent premium to Argon’s closing price on June 29. Boeing shares fell 29 cents to close at $62.75 while Argon shares skyrocketed 40 percent to $34.29. They hit a new annual high of $34.37 earlier in the session.