Lessons from Ukraine contributed to RADA acquisition, says head of Leonardo DRS
WASHINGTON — The planned acquisition of Israeli company RADA Electronics Industries by Leonardo DRS is partly motivated by lessons learned from the war in Ukraine, according to the head of the Arlington, Va.-based company.
In an interview with Defense News, Leonardo DRS Chairman and CEO William Lynn said adding RADA’s advanced radar capabilities to his portfolio will improve the company’s ability to deliver force protection capabilities. to military customers and complement its integration capabilities.
And the war in Ukraine shows the growing importance of force protection measures as the United States prepares for its next conflict. Ukrainian troops have been devastatingly effective in ambushing Russian armored vehicles with shoulder-thrown munitions, and Lynn said the combined company’s capabilities could help the United States defend against attacks similar in a future war.
He highlighted the Trophy active protection system that the US Army uses on its M1 Abrams tanks, which Leonardo DRS developed in partnership with Rafael Advanced Defense Systems, and the Iron Fist systems that are currently being tested on the combat vehicle of Bradley infantry and use RADA radars. , as an example of what the company might provide.
“When you combine RADA and DRS, you’re going to cover the two main active protection systems that we’re going to be able to provide to the US and European militaries, either system depending on what they need in terms of the capabilities of the vehicle,” Lynn said. “The conflict in Ukraine has highlighted these force protection needs, which are one of the main strategic reasons for this merger.”
The purchase bolsters the combined company’s force protection and counter-drone capabilities and bolsters its ability to compete for future programs, he said.
The companies announced the deal on Tuesday. Leonardo DRS, the US subsidiary of Italian defense company Leonardo SpA, is a mid-tier defense electronics company that primarily serves the US military. RADA provides software-defined tactical radars for the US and Israeli military as well as a handful of European countries.
RADA will become an Israeli subsidiary of Leonardo DRS when the transaction closes in the fourth quarter. The merged company will retain the Leonardo DRS name. RADA will operate as a business unit within the advanced detection segment of DRS.
Under the terms of the agreement, Leonardo DRS will acquire the entire share capital of RADA, in exchange for an approximate 19.5% stake to RADA shareholders. Leonardo DRS will assume RADA’s stock exchange listing and is expected to trade on NASDAQ and the Tel Aviv Stock Exchange under the symbol “DRS”.
Lynn said returning Leonardo DRS to public trading would give him more financial stability and the flexibility to raise funds for new acquisitions. Its predecessor DRS was listed until its takeover in 2009 by the Italian company that would become Leonardo.
Having RADA’s radar capabilities in-house will be an advantage as the U.S. military develops its next generation of force protection programs, which could involve non-kinetic weapons such as microwaves and lasers, and counter systems. -consolidated drones, he said.
Further into the future, Lynn sees the military increasingly turning to systems that merge sensors with communications capabilities so that battlefield commanders have a single, integrated system that provides them with data. When that happens, he said, it will be important that radar becomes an integral part of the Leonardo DRS portfolio, and not something it recently added.
Lessons from Ukraine
Russia’s invasion of Ukraine and its military’s vulnerability to relatively inexpensive drones underscored the importance of force protection, Lynn said, adding that the US military could face similar threats in a future war. This includes short-range air defenses such as the M-SHORAD program. Combining RADA’s radar with Leonardo’s suite of capabilities would make it easier to deliver such systems, he said.
Integrating radar systems in-house will also strengthen the DRS’s ability to deliver electronic warfare capabilities, Lynn said, which has also been a vital capability in the war in Ukraine.
Lynn said Leonardo DRS does not sell its systems directly to Ukraine, but has sold targeting systems for armored vehicles to Germany and Sweden that those countries could supply to Ukraine.
Leonardo DRS and RADA have worked together on several occasions over the years, notably on the army’s M-SHORAD program, or Maneuver Short Range Air Defense. Lynn said the familiarity will make it easier for the two companies to merge.
“When you merge two companies, you worry about the cultural fit. If you have strangers, it’s a lot more risky,” Lynn said. “Knowing each other as well as us, we are convinced that we will work well together.
And he doesn’t expect any issues to emerge in the regulatory process that could disrupt the deal.
RADA Chief Executive Dov Sella said on Tuesday that the combination of the two technology-focused defense companies, with both an international presence and involvement in major U.S. defense programs, will benefit shareholders of both companies and will increase RADA’s competitiveness.
“This transaction represents the first time that a major US-based defense company, backed by a global defense leader, has acquired a major Israeli defense technology company,” Sella said. “This unique transaction will strengthen the Israeli defense industry and set trends and direction for the future.
Stephen Losey is Defense News’ air warfare reporter. He previously reported for Military.com, covering the Pentagon, special ops and air warfare. Prior to that, he covered Air Force leadership, personnel, and operations for Air Force Times.