ROME — Italian state-controlled defense company Leonardo has confirmed plans to list U.S. subsidiary DRS on the New York Stock Exchange.
In a statement Friday, the firm said it had filed for a “proposed initial public offering of a minority stake of its common shares” with the U.S. Securities and Exchange Commission, and expects the process to be completed by the end of March.
“By retaining our majority shareholding we intend to maintain a significant exposure in this strategically important market, whilst continuing to leverage established relationships for all of Leonardo’s businesses,” Leonardo CEO Alessandro Profumo said.
Leonardo said it has not determined what stake in the company it will list, with press reports suggesting between 20 and 30 percent.
A middle-tier defense electronics firm that supplies the U.S. military, DRS lists its main product lines as sensing, electronic warfare, cybersecurity, network computing, communications, force protection, and electrical power conversion and propulsion. Leonardo purchased the firm in 2008 for $5.2 billion, arranging proxy agreements with the U.S. government to allow the firm to work on sensitive programs.
“A new proxy agreement is anticipated to be entered into with the U.S. Department of Defense to permit Leonardo DRS to continue to compete and perform on classified programmes,” Leonardo said in a statement.
The initial public offering will free up much-needed cash for Leonardo, which saw its debt rise in the first nine months of 2020 to €5.88 billion (U.S. $7.17 billion) from €4.3 billion in the same period of 2019.
As for DRS, in the first nine months of 2020, the firm saw revenue of $1.93 billion, up 6 percent year on year, boosted by additional orders for the production of new-generation U.S. Army mission command computing systems and an order for equipment, panels and propulsion controls for CVN 80 and CVN 81 vessels for the U.S. Navy.
In 2019, New Jersey-based company saw full-year revenue of $2.7 billion, up 17 percent year on year.
Tom Kington is the Italy correspondent for Defense News.
