L-3 could spend $1 billion of cash on hand for M&A

L-3 Communications Holdings Inc. Chief Executive Officer Michael Strianese speaks during the 2010 Reuters Aerospace and Defense Summit in Washington September 9, 2010.

WASHINGTON (Reuters) - Defense contractor L-3 Communications Holdings (LLL.N) is looking at intelligence, services and cybersecurity areas for potential deals and could spend much of its $1 billion cash on hand for acquisitions, its chief executive said on Thursday.

Speaking at the Reuters Aerospace and Defense Summit in Washington, CEO Michael Strianese said the company, which has been one of the most prolific dealmakers in the aerospace and defense sector, will continue to use acquisitions to grow.

"We are always in discussions with some companies," Strianese said. "We are more in acquisition mode than divestiture mode."

L-3, which provides systems that gather, monitor and disseminate intelligence and other products, bought more than 50 companies between 1997, when it was spun off by Lockheed Martin Corp (LMT.N), and 2006, when founder Frank Lanza died.

So far this year, L-3 has spent about $650 million to buy Airborne Technologies, which provides systems for unmanned aircraft, and Insight Technology, a maker of mission critical night vision and electro-optical equipment.

Strianese said consolidation between top-tier defense contractors was unlikely because of competition issues and a lack of appetite for mega mergers at the Pentagon.

Asked about a possible takeover approach by a larger defense contractor, Strianese said, "We always have to be mindful of our obligations to shareholders. We're not up for sale. I'm not going to say never. I don't know what industry peers are thinking."

(Reporting by Soyoung Kim, Andrea Shalal-Esa, Karen Jacobs, Tim Hepher; editing by John Wallace)