General Dynamics has agreed to acquire Force Protection,  known for its combat vehicles enhanced to survive the impact of mines and roadside bombs, in a deal valued at $360 million.

Industry analysts noted the announcement that General Dynamics will buy Force Protection reflects the broad changes reshaping the military in an era of tight budgets and concerns about the nation’s mounting debts.

In particular, observers noted, the deal comes as the U.S. military faces two signature events. The Obama administration recently announced it will have all troops out of Iraq by the end of this year. That of course means the Army will have less immediate need for the mine-resistant, ambush protected (MRAP) vehicles that Force Protection makes.

Moreover, the Pentagon faces the possibility of an even tighter budget than had been anticipated just a few months back. Indeed, a congressional super committee meets daily to determine a deal needed to cut the burgeoning U.S. budget and rein in the federal deficit.

Under that scenario, should the bipartisan group of congressman and senators fail to reach a compromise spending agreement, the Pentagon faces mandated funding cuts. Either way, the Iraq withdrawal clearly represents the most dramatic shift in combat vehicle needs in a decade, observers noted.

Meanwhile, General Dynamics would appear to have the correct product lineup, history and corporate structure to absorb Force Protection. The two companies had earlier formed the joint venture Force Dynamics LLC to market various MRAP-type vehicles to the military. Based in Fall Church, Va., General Dynamics has witnessed its share of shifting military fortunes.

Founded in 1952, the company expanded steadily through acquisitions and internal growth. But following the end of the first Gulf War, the company sold much of its defense-related businesses in the early 1990s.

By 1995, however, the company refocused its efforts and once again made the U.S. military as well as intelligence agencies key clients. Since 1997, it has bought more than 50 companies. Annual revenues have grown from $4 billion to more than $32 billion today.

The sprawling defense giant operates the Land Systems group as a key business and will fold Force Protection into this unit, the company said. Observers said the two businesses should fit together well.

General Dynamics already produces some of the military’s key combat vehicles. These include the M1A2 Abrams Main Battle Tank and the Stryker family of vehicles. The company also makes the LAV I Marine Corps Vehicle and the ASLAV 25 variant for the Australian army.

For its part, Force Protection has focused heavily on MRAP vehicles, and that gave the company a high profile during the Iraqi conflict. Founded in 1997, the company is based in South Carolina and has roughly 1,900 workers.

Key Force Protection vehicles include:

• Cougar 4X4. A workhorse for the U.S. Marine Corps since 2004, the agile platform finds use in reconnaissance, command and control, forward observation, urban operations, and homeland security missions.
• Buffalo. A 30-foot remote interrogator arm allows for fast inspection of suspicious roadside or buried objects that crewmembers can inspect, dispose of or relocate.
• JAMMA. The acronym stands for Joint All-Terrain Modular Mobility Asset.  Built as a first response vehicle, the high performance unit can handle challenging terrain at high speeds even with a combat payload.
• Ocelot. It incorporates V-shaped hull blast-protection with modular flexibility. Demountable, protected pods allow for multiple configurations such as fire support and troop or materials transport.

Force Protection has annual revenues of about $580 million and an order pipeline worth about $652 million. In its most recent financial quarter, the company reported an 18.5 percent sales decline but earned $4.5 million compared with a year-ago loss of roughly $1.8 million.