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Boeing To Acquire Argon ST

The Boeing Company and Argon have entered into an agreement whereby Boeing will acquire Argon ST in an all-cash tender offer and merger for $34.50 per share, or approximately $775 million, net of cash acquired. This acquisition is expected to advance Boeing's growth strategy while expanding its capabilities to address the command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR), cyber, and intelligence markets.

Argon ST is a developer of C4ISR and combat systems. Founded in 1997 and headquartered in Fairfax, VA, the firm develops sensors and networks designed to exploit, analyze, and deliver information for real-time situational awareness. In fiscal 2009, Argon ST generated $366 million in revenues. The company has operating locations in Virginia, California, Michigan, Pennsylvania, Florida, Maryland, and Texas, and has approximately 1,000 employees.

Once acquired, Argon ST will be a standalone subsidiary of Boeing. It will serve as a new division of Boeing Network & Space Systems, a business within the Boeing Defense, Space & Security operating unit. Argon ST will continue to be led by Terry Collins, Chairman and Chief Executive Officer, and his management team.

According to Dennis Muilenburg, President and CEO of Boeing Defense, Space & Security, "Combining the strength of Boeing with the experience of Argon ST will significantly accelerate our capabilities in sensors, communications technologies, and information management."

"As part of Boeing, Argon ST will continue to provide leading-edge network- based communications solutions for domestic and international customers including the US Navy, the US Air Force, and the Department of Homeland Security so they can continue to execute their critical missions," states Roger Krone, President of Boeing Network & Space Systems.

The transaction is expected to close by the end of the third quarter 2010. It is subject to a majority of the outstanding Argon ST shares being tendered as well as satisfactory completion of other customary closing conditions including US regulatory approval. Boeing plans to fund the transaction with existing cash. The acquisition is expected to have an immaterial impact on Boeing's earnings.

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