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BAE SYSTEMS Agrees To Acquire Alphatech

28 Sep 2004

Acquisition will expand companys capabilities in Image and Signal Processing, Intelligence Fusion, and Information-based National Security Systems

BAE Systems plc today announced that its wholly-owned U.S. subsidiary, BAE Systems North America, has entered into a definitive merger agreement to acquire ALPHATECH for a cash consideration of $88.4 million. ALPHATECHs capabilities will complement BAE Systems North Americas significant presence in the system and subsystem levels in the C4ISR market, and enhance BAE Systems position as a major provider of information-based systems, emphasising horizontal integration and fusion.

The integration of ALPHATECHs technologies with BAE Systems North Americas enterprise engineering and systems integration expertise will result in expanded capabilities to address the network centric warfare requirements of the national security and intelligence communities, particularly in the areas of Precision Engagement and Tasking, Processing, Exploitation & Dissemination (TPED).

Headquartered in Burlington, Massachusetts, and employing 322 people, ALPHATECH specialises in image and signal processing, multi-intelligence fusion and intelligent systems for the Department of Defense and other government intelligence agencies. Founded in 1979 by faculty of the Massachusetts Institute of Technology (MIT), more than 80 percent of ALPHATECHs employees hold advanced degrees.

For the year ending December 2003, ALPHATECH recorded sales of $51 million. Revenues for the six months ending June 2004 were $32 million.

Mark Ronald, president and CEO of BAE Systems North America, said, BAE Systems and ALPHATECH both leverage technology and value innovation. The acquisition of ALPHATECH will augment BAE Systems capabilities in enterprise engineering, software development, and advanced geospatial technologies, supporting our mission to develop intelligence and information dominance systems, and provide our customers with superior solutions.

BAE Systems North America is a leading electronics, information systems and technology services company, and one of the largest providers of systems and services for the U.S. Department of Defense. BAE Systems North America currently employs more than 26,000 people across some 30 states, generating sales of more than $5 billion. The company designs, develops, manufactures and supports a wide range of advanced aerospace products, electronic systems and information technology for the U.S. Government and commercial customers.

Conclusion of the transaction is expected during the fourth quarter, subject to regulatory reviews and approvals and customary closing conditions.

About BAE SYSTEMS

BAE Systems is an international company engaged in the development, delivery, and support of advanced defence and aerospace systems in the air, on land, at sea, and in space. The company designs, manufactures, and supports military aircraft, surface ships, submarines, radar, avionics, communications, electronics, and guided weapon systems. It is a pioneer in technology with a heritage stretching back hundreds of years. It is at the forefront of innovation, working to develop the next generation of intelligent defence systems.

BAE Systems has major operations across five continents and customers in some 130 countries. The company employs more than 90,000 people and generates annual sales of more than 12 billion through its wholly owned and joint-venture operations.

New media contacts:

John Measell
BAE SYSTEMS North America
Tel: (001) 703-907-8261 Mobile: 703-405-5010
www.na.baesystems.com

Richard Coltart
BAE SYSTEMS plc
Corporate Communications
Mobile: +44 (0) 7801 712042