L-3 Communications announced that it has agreed to acquire Micreo Limited, an Australian specialist in electronic warfare subsystems. Micreo provides high-performance microwave, millimeter wave and photonic technology for various ISR and EW applications. In addition, the company has counter-IED capabilities. The business, which will be integrated into L-3’s Electronic Systems Segment and renamed L-3 Micreo, is projected to generate $27 million of revenue in 2017 and be accretive to earnings. Deal terms were not disclosed.
Formula Systems announced that it has partnered up with Israel Aerospace Industries (IAI) to acquire TSG from Ness Technologies Inc., a portfolio company of TRG Management LP. TSG is a subsidiary of Ness and provides C2 systemes, intelligence, homeland security and cybersecurity services to Israel's defense organizations including the Israeli Defense Forces and the Israeli Police. The total purchase price will be $50M in cash and will be split evenly with each of Formula and IAI acquiring 50% stakes for $25M. Formula and IAI will seek to grow TSG through follow-on acquisitions of companies in complimentary areas.
Israel Discount Capital Markets & Invetments Ltd. and Fischer, Behar, Chen, Well Orion & Co. advised Ness on the deal.
Cubic Corp. announced a couple of deals including the acquisition of TeraLogics LLC and the signing of a definitive agreement to acquires GATR Technologies Inc. Ashburn, Virginia-based TeraLogics provides full-motion Processing, Exploitation and Dissemination (PED) for the DoD, Intelligence Community and commercial clients. The total consideration includes an initial purchase price of $39M and contingent consideration of $9M.
Huntsville, Alabama-based GATR Technologies is a manufacturer of next-generation deployable satellite communication terminal solutions. The total consideration includes an initial purchase price of $225M and contingent consideration of $7.5M. The deal is subject to a HSR review and is expected to close in Cubic's second fiscal quarter 2016.
Bradley Feldmann, President and CEO of Cubic Corporation states: "The acquisition of TeraLogics and GATR represents powerful next steps in achieving our C4ISR growth strategy as they expand our footprint in the C4ISR and SATCOM markets."
Digital Barriers plc announced that it has entered into an agreement acquire Ashburn, Virginia-based Brimtek Inc., a provider of surveillance solutions to military and law enforcement customers. Brimtek's products and solutions include surveillance, reconnaissance, data collection and processing, and secure communications as well as its own proprietary set of surveillance products which are packaged with third party hardware and software to deliver an integrated surveillance system. The company is projected to generate 2015 revenues of around $40M with EBITDA of around $3.5M. The purchase consideration is comprised of $25M payable at closing and $20M in earnout based on achieving certain performance targets through 2017.
Digital Barriers cites the FCC's 2015 spectrum reallocation that raised $41B as a driver for material US investment in surveillance technology and infrastructure over the next few years, spending which the company belives will continue to greatly benefit Brimtek. Brimtek is expected to be the platform for growth in the US market and will become the US Government Services division of Digital Barriers.
UTC Aerospace Systems, a unit of United Technologies Corp., announced that it has acquired N2 Imaging Systems LLC based in Irvine, California. N2 is a designer and manufacturer of compact, low power, visible and infrared imaging systems used for soldier vision enhancement, surveillance, or threat detection-and-targeting. John Trezza, Vice President and General Manager of UTC Aerospace Systems' Force Protection business states: " Adding our experience in designing, developing and fielding sophisticated technology to the innovation of N2 will further support on-time execution of the Army's Enhanced Night Vision Goggle (ENVG) program."
Deal terms were not disclosed.
L-3 Communications announced that is has acquired ForceX, Inc., a Nashville-based ISR company focused on providing mission management software and geospatial application technology programs, with products including cueing system software, hardware and video algorithms, and wide-area sensor integration solutions and software. A significant amount of the company's revenue comes from the US Air Force. The business will be renamed L-3 ForceX and will be integrated into L-3's Integrated Sensor Systems (ISS) sector with the Electronic Systems business segment.
According to the company's press release, “ForceX complements L-3’s core business, enhancing our product and system capabilities to compete in new markets, and expands our customer base.”
The transaction closed on October 13, 2015. Deal terms were not disclosed, however the goodwill and other intangible assets from the acquisition are expected to be deductible for income tax purposes suggesting the deal was structured as a stock purchase with a 338(h)(10) election. The acquisition is projected to add approximately $30M in revenue for the year ending December 31, 2016 and is expected to be immediately accretive. KippsDeSanto advised ForceX on the transaction.
LGS Innovations (LGS), a portfolio company of CI Capital Partners, announced that it has acquired Axios, Inc., a provider of communications and signal processing solutions and mission support services for the Department of Defense and Intelligence Community. Founded in 2000, Axios supports its clients through RF communications and signal process, mission operations, frameworks and open source technology, software defined radio, tactical programs, and other solutions areas. More than half of the company's 120+ employees hold advanced degrees in electrical engineering, computer engineering, and computer science. The business will continue as a wholly-owned subsidiary of LGS.
According to the company's press release, "The acquisition of the Dulles, VA-based provider of leading-edge processing solutions and products complements LGS’ intelligence, surveillance, and reconnaissance (ISR) technologies with the addition of mission-attached services and application development capabilities."
Axios is the first acquisition by LGS since it was itself acquired from Alcatel-Lucent by Madison Dearborn Partners and CoVant in 2014.
Deal terms were not disclosed. Houlihan Lokey advised Axios on the transaction.
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