SYS Technologies (SYS) In Merger Agreement With Kratos Defense & Security (KTOS)

February 21, 2008 8:38 AM EST

SYS Technologies, Inc. (AMEX: SYS) entered into a definitive merger agreement with Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), in an all-stock transaction.

Under the terms of the agreement, SYS will become a wholly owned subsidiary of Kratos and all of SYS’ outstanding common shares will be converted into Kratos common shares.

Kratos will issue approximately 25 million shares of KTOS common stock for 100 percent of SYS’ shares.

Under the agreement, which has been unanimously approved by both boards of directors, SYS stock will be converted into Kratos stock at an exchange ratio of 1.2582 shares of Kratos common stock for each outstanding share of SYS common stock. Upon closing, SYS shareholders will own approximately 23 percent and current Kratos shareholders approximately 77 percent of the combined company.

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