Textron ( TXT), seeking to bolster its aerospace and defense business, agreed to acquire United Industrial ( UIC) in a $1.1 billion deal.

Providence, R.I.-based Textron will pay $81 a share for United Industrial, representing a 7.1% premium over the stock's close of $75.62 Friday.

The $1.1 billion price tag includes the assumption of debt. Based on United Industrial's shares outstanding as of its most recent quarterly report, the cash portion of the deal is valued at about $807 million.

United Industrial mainly operates through its AAI Corp. unit, a Hunt Valley, Md., producer of aerospace and defense systems such as unmanned aircraft and ground-control stations. The deal will add to Textron's many aircraft and industrial-related businesses, which include Bell Helicopter and Cessna.

"AAI is a superb strategic fit for Textron," said Textron Chairman, President and CEO Lewis Campbell in a press release. "It is in perfect alignment with our strategy to add important capabilities to our existing aircraft and defense businesses, adding new products and capabilities to further serve our government, military and homeland security customers."

Following the deal close, expected by the end of the year, AAI will be added to Textron's Bell Helicopter division.