TRW Agrees to Buy BDM for $975 Million

TRW Inc. on Friday agreed to acquire BDM International Inc., an information technology and consulting company, for about $975 million, in order to expand its government information and commercial services businesses.

The Cleveland-based auto parts and aerospace company will take a $400-million to $600-million charge in the fiscal fourth quarter as a result, said Chief Financial Officer Carl Miller.

The acquisition adds a faster-growing non-defense business to TRW’s government services, while boosting its commercial business and international reach. The move follows similar acquisitions by other aerospace companies that have diversified to lessen the impact of shrinking federal defense budgets.

“It’s not far afield from what they are already doing,” said Jackson Blackstock, an analyst with Donaldson, Lufkin & Jenrette. “From a strategic standpoint . . . it makes sense.”

TRW is offering $29.50 for each share of BDM, whose chairman is former Defense Secretary Frank Carlucci. McLean, Va.-based BDM shares surged $7 to close at $29.50 on Nasdaq. TRW shares rose 25 cents to close at $58.44 on the New York Stock Exchange.

The offer represents a 31% premium over BDM’s closing price Thursday.

TRW said Carlyle Group and certain affiliates, which control 26% of BDM, have agreed to the offer. Washington-based Carlyle, a closely held investment firm whose management includes Carlucci and former Secretary of State James A. Baker III, acquired BDM from Ford Motor Co.’s Ford Aerospace unit in 1990.

Carlyle, which could make about $226 million on the sale, took BDM public in 1995 and kept a 7.66-million share stake in the company.

Sales at BDM, which provides computer systems, software and services to both government agencies and companies, rose 79% from fiscal 1993 to $1 billion last year.