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EADS Acquires Racal Instruments Group

* Creates leading Global Test and Services Company
* Boosts business portfolio and skills base of EADS UK

London, 06 October 2004

EADS’ business portfolio in the United Kingdom has been boosted by the acquisition of Racal Instruments Group, announced today. Racal Instruments is a leader in the development, production, and integration of systems and instruments to test electronics, aerospace, and defense systems.

Racal Instruments was acquired from an entity controlled on behalf of the Thomas Weisel Capital Partners funds and J.F. Lehman and Company. The price of the acquisition is $105 million, plus or minus net cash at the date of closing, and the sellers have agreed to an earn-out formula whereby EADS pays up to an additional $25 million for guaranteed future bookings until mid 2005.

Racal Instruments employs more than 320 professionals in the U.S. at Irvine, California, and San Antonio, Texas, in the United Kingdom at Ferndown, Hampshire, and elsewhere in Europe and Asia, and supports both commercial and military customers worldwide. Revenue for the year in progress is expected to be $84 million, reflecting strong year-to-year growth. Upon completion of the transaction, Racal Instruments, Inc. (Irvine, CA and San Antonio, TX) will transfer to EADS North America Defense Company and Racal Instruments UK, Europe and Asia will be transferred to EADS Test and Services in the Defense and Security Systems Division of EADS.

Tom Enders, Member of the EADS Executive Committee and Head of the EADS Defense and Security Systems Division, said, “Beyond the U.S. market, Racal Instruments UK and EADS Test & Services will form the European leader in Aerospace and Defense Testing. The new company will be a strong global competitor in the test and services industry, with world-class software and engineering capabilities, uniquely capable of offering customers a global full-service support network.”

Sir Jeremy Blackham, President of EADS UK, said: “Racal Instruments UK adds substantially to the Group’s business portfolio in the UK and also builds significantly on our core competences and skills base here. We welcome the Racal team in Ferndown to the Group and look forward to their full participation in our growth plans ahead.”

EADS Test & Services is a specialist in Automatic Testing and offers a line of test systems and services for the integration, production and maintenance testing of electronic, optro-electronic and radar equipment installed in airliners, military aircraft, helicopters, tanks, missiles and weapon systems. More than 800 test stations and 4,000 test programs have been delivered throughout the world to more than 160 airlines, maintenance organizations, equipment manufacturers and armed forces. Building on its test expertise, the ISO 9001-certified company increasingly supplies test engineering and obsolescence management services to the industry.
About Racal Instruments

Racal Instruments designs, manufactures, sell, and services electronic test and measurement equipment and systems to leading high-technology customers throughout the world. It has facilities in the U.S., UK, France, Italy, and Germany and a sales and support network in over 80 countries. The company offers an extensive range of products and services, from modular instruments to turnkey automatic test systems. These are ideal for use in a wide variety of applications, including commercial functional test and measurement, laser diode burn-in and production, microcomputer production, and jet engine test. Among the key market sectors the company serves are Military, Aerospace, Telecommunications, Semiconductor, and Commercial Manufacturing.

About EADS Test & Services

EADS Test & Services is an integrated part of the EADS Defense and Security Systems Division (DS). DS, with revenues of over 5.2 billion euros in 2003 and roughly 24,000 employees across nine nations, forms the defense pole within EADS.

About EADS

EADS is a global leader in aerospace, defence and related services. In 2003, EADS generated revenues of more than 30 billion euros and employed a workforce of more than 109,000. The EADS Group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and the joint venture MBDA, the second largest missile producer in the global market. EADS is the major partner in the Eurofighter consortium, is the prime contractor for the Ariane launcher, develops the A400M military transport aircraft and is the largest industrial partner for the European satellite navigation system Galileo.

Contacts for the media:
Andrew Jeacock
EADS UK
Tel.: +44 207 845 8400

David Simonson
Merlin
Tel.: +44 207 653 6620

Tom Randell
Merlin
Tel.: +44 207 653 6620