FALLS CHURCH, Va. ― Defense contractor General Dynamics said it would buy smaller rival Force Protection Inc for $360 million to expand its armored vehicle business.
Shares of Force Protection, which also swung to a quarterly profit, rose to $5.60 in pre-market trading, surpassing the offer price of $5.52 a share. General Dynamics’ offer is 31 percent more than Force Protection shares’ Friday closing price.
The deal for Force Protection comes as concerns linger over massive defense budget cuts and an expected withdrawal of U.S. forces from Afghanistan and Iraq.
Force Protection, known for its Buffalo, Cougar and Ocelot brands of armored vehicles, on Monday posted a quarterly profit above analysts’ expectations.
The company ended the quarter with a funded backlog of $652 million and said it has “full visibility” for the delivery of about 100 Buffalos per year for both 2012 and 2013, with more shipments expected through April 2014.
General Dynamics, which makes armored vehicles, ships and business jets, expects the deal to add to earnings in 2012.
Force Protection, which has delivered more than 3,000 vehicles under the U.S. military’s Mine Resistant Ambush Protected vehicle program, will become a part of General Dynamics Land Systems, which makes Abrams main battle tanks and Stryker infantry combat vehicles.