NEW YORK (CNN/Money) - Defense contractor General Dynamics has agreed to buy information security company Veridian Corp. for $1.5 billion cash, including assumed debt.

Under terms of the deal announced before the market open Monday, General Dynamics will pay $35 for each share of Veridian, a premium of about 28 percent over Friday's closing price of $27.35. In addition to the share purchase, the terms of the deal include $270 million in assumed debt. Shares of Veridian (VNX: up $7.25 to $34.60, Research, Estimates) jumped to close to the $35 offer in early trading Monday, while shares of General Dynamic (GD: down $0.40 to $68.21, Research, Estimates) slipped slightly.

Veridian forecasts 2003 revenue of $1.2 billion and said it has a current business backlog of $2.6 billion. General Dynamics said it anticipates Veridian will have 2004 revenue of $1.4 billion and that its acquisition will add to General Dynamics' earnings per share and cash flow.

Veridian's businesses include: network security and enterprise protection; intelligence, surveillance and reconnaissance; knowledge discovery and decision support; information systems development and integration; chemical, biological and nuclear detection; network and enterprise management; and large-scale systems engineering expertise.

General Dyanamics has tried or completed a number of acquisitions of old-line defense contractors in recent years. It bought Bath Iron Works, a shipbuilder, in 1995, and National Steel and Shipbuilding Co. in 1998, as well as General Motors Corp.'s defense unit earlier this year. But its lost out in its effort to buy the defense contractor unit of TRW to competitor Northrop Grumman (NOC: Research, Estimates) last year.