Move Represents Significant Advancement in Core Defense Capabilities

October 25, 2006

Providence, RI – October 25, 2006 – In a move to extend core capabilities in its aerospace and defense business, Textron Inc. (NYSE: TXT) today announced that its Textron Systems unit has reached an agreement to acquire Overwatch Systems for a purchase price of approximately $325 million. Overwatch Systems is a leading developer and provider of intelligence analysis tools and communications products for the U.S. Department of Defense, the Department of Homeland Security, U.S. intelligence agencies and select foreign militaries.

"This acquisition is in perfect alignment with our strategy to add important capabilities to our current strong businesses, to further serve our government, military and homeland security customers," said Textron Chairman, President and CEO, Lewis B. Campbell. "In addition, it truly complements our current precision engagement strategy, adding critical new products to our intelligent battlefield offerings."

Headquartered in Morristown, New Jersey, Overwatch Systems develops and markets integrated systems that enable analysts to generate actionable intelligence faster and more effectively for the war fighter, first responder, analyst and policy maker. With approximately 385 employees in several major locations, Overwatch Systems is expected to generate approximately $105 million of revenue with strong margins, in 2006.

"As with the recent acquisition of Innovative Survivability Technologies (IST), Overwatch products and technologies clearly complement our existing portfolio," said Richard J. Millman, president of Textron Systems. "This addition of exceptional intelligence analysis capabilities will allow us to more fully address the emerging needs of our government and other customers in this dynamic wartime and global environment while also gaining some of the industry's top talent and their established and highly loyal customer base."

Millman added, "Due to high customer demand and the complementary nature of these products with our existing platforms, we expect this acquisition to result in annual revenues exceeding $300 million over the next five years."

The transaction is subject to normal regulatory approvals and is expected to close by the end of the year.

About Textron Systems

Textron Systems Corporation ("Textron Systems") provides innovative technology solutions to meet the needs of the global aerospace and defense industries. The company supports military and homeland security missions with strike weapons, as well as mobility and surveillance systems, and provides commercial and general aviation with engines and actuation systems. The Textron Systems name is well known in the areas of advanced weapons, surveillance systems, aircraft control components, piston engines, specialty marine craft and armored vehicles. Textron Systems is a wholly-owned subsidiary of Avco Corporation. Avco Corporation is wholly-owned subsidiary of Textron Inc. More information is available at

About Textron

Textron Inc. is a $10 billion multi-industry company operating in 33 countries with approximately 37,000 employees. The company leverages its global network of aircraft, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft, Jacobsen, Kautex, Lycoming, E-Z-GO and Greenlee, among others. More information is available at

Forward Looking Information: Certain statements in this release and other oral and written statements made by Textron from time to time are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or project revenues, income, returns or other financial measures. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: [a] Textron's ability to perform as anticipated and to control costs under contracts with the U.S. Government; [b] the U.S. Government's ability to unilaterally modify or terminate its contracts with Textron for the Government's convenience or for Textron's failure to perform, to change applicable procurement and accounting policies, and, under certain circumstances, to suspend or debar Textron as a contractor eligible to receive future contract awards; [c] changes in national or international funding priorities and government policies on the export and import of military and commercial products; [d] uncertainty in estimating contingent liabilities and establishing reserves to address such contingencies; and [e] the efficacy of research and development investments to develop new products.

Connect with Textron IR

Eric Salander, Vice President, Investor Relations
(401) 457-2288
Cameron Vollmuth, Manager,
Investor Relations (401) 457-2288

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