ATLANTA (Reuters) - Defense contractor General Dynamics Corp Inc said on Thursday that it planned to buy Axsys Technologies Inc , a maker of surveillance and imaging systems, for $643 million.
Axsys shares rose 6 percent in morning trading to $53, below the offer price of $54.
The companies said in a statement that their respective boards had approved the proposed purchase, which is expected to close in the third quarter.
The purchase price would represent an 8 percent premium to Axsys' Wednesday closing price of $50 on Nasdaq.
The deal would be "earnings-neutral" in 2009 to General Dynamics and would add to profits thereafter, the statement added.
The purchase would enable General Dynamics to strengthen its offerings in the market for systems that gather, monitor and disseminate intelligence, expected to be a key focus as the U.S. Defense Department revamps its military capabilities.
Defense analysts have said big companies could scout for smaller players with unique technologies as the Pentagon seeks to better equip the U.S. military for irregular warfare.
In March, Reuters had reported that Axsys, based in Rocky Hill, Connecticut, was evaluating a possible sale of the company.
Axsys had more than 11.5 million diluted common shares outstanding as of March 28. A General Dynamics spokeswoman said Axsys had no debt.
General Dynamics shares were down 38 cents at $58.21 in morning New York Stock Exchange trade.
(Reporting by Karen Jacobs; Editing by Lisa Von Ahn)
