Kratos Defense Announces Sale of its Public Safety & Security System Integration Business to Securitas Electronic Security, Inc.

February 28, 2018

San Diego – Paul Hastings LLP, a leading global law firm, announced today that the firm represented Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a leading National Security Solutions provider, in the Company's sale of its Public Safety & Security System Integration Business (PSS) for $69 million in cash to Securitas Electronic Security, Inc., subject to a customary net working capital adjustment at closing. Kratos expects to ultimately receive $70 million of net cash proceeds from the transaction, after taking into account amounts to be paid by Kratos pursuant to a negotiated transaction services agreement between the two companies, receipt by Kratos of approximately $7 million in estimated net working capital to be retained by Kratos, and associated transaction fees and expenses.

The Company’s sale of PSS is expected to significantly improve Kratos’ overall financial position, flexibility and liquidity, reduce Kratos’ net leverage, and improve the Company’s future financial matrices including growth rates, margin and Adjusted EBITDA rates. The sale will also allow Kratos greater focus on its high growth core businesses including unmanned aerial drones, satellite communications, missile defense, training systems and microwave electronics.

Corporate Partner Teri O’Brien led the Paul Hastings team, which also included associates Melissa Garcia and Taylor Denson.

At Paul Hastings, our purpose is clear — to help our clients and people navigate new paths to growth. With a strong presence throughout Asia, Europe, Latin America, and the U.S., Paul Hastings is recognized as one of the world’s most innovative global law firms.