Lockheed spins off 10 high-tech companies Defense contractor to keep 35% share of newly formed firm

February 04, 1997|By Greg Schneider | Greg Schneider,SUN STAFF

Lockheed Martin Corp. will spin off 10 business units with 4,900 employees as part of a corporate restructuring, the company said yesterday.

The business units, which had combined revenues last year of $650 million, will create a new company called L3 Communications, based in New York City.

Lockheed Martin's Bethesda headquarters declined to release financial details of the transaction, which it said would be subject to a definitive purchase agreement and regulatory approvals.

The deal should close by the end of the first quarter, the company said.

"These 10 business units are primarily high-technology product oriented, financially healthy and well positioned for future growth. However, Lockheed Martin's long-term strategic focus is on major systems," said Vance D. Coffman, Lockheed Martin's president and chief operating officer.

The Bethesda-based defense contractor will maintain a 35 percent stake in L3 Communications.

Lehman Brothers Capital Partners III L.P., a merchant banking partnership affiliated with Lehman Brothers Holdings, will own about 50 percent.

The remaining 15 percent will be controlled by a management team led by Frank C. Lanza, currently executive vice president of Lockheed Martin, and Robert V. LaPenta, now a corporate vice president.

Both men were formerly senior executives at Loral Corp., which Lockheed Martin bought last year. The deal is fallout from that acquisition.

Officials said the transaction would cause no layoffs.

The major business units that will combine to create the new company are Wideband Systems of Salt Lake City; Communications Systems of Camden, N.J.; and Lockheed Martin Products Group.

The products group includes eight smaller companies in Georgia, Florida, California, Pennsylvania, New York and Massachusetts.

Pub Date: 2/04/97

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