Secure wireless communications technology developer TeleCommunication Systems (TCS) has snapped up California-based Trident Space & Defense, a privately-held provider of engineering and electronics solutions for the global space and defence…
Secure wireless communications technology developer TeleCommunication Systems (TCS) has snapped up California-based Trident Space & Defense, a privately-held provider of engineering and electronics solutions for the global space and defence sectors.
While financial details were not disclosed, TCS said that the consideration would be split between cash and approximately three million shares of TCS Class A common stock. Based on the company’s share price of US$4.30 on the day it announced the transaction, the stock portion is worth approximately US$12.9m.
The seller is private equity firm Admiralty Partners, a US-based investment fund which specialises in investing in the aerospace, defence, and federal information technology industries. Back in March 2007, Admiralty acquired the Aerospace and Defense business units of Vertical Circuits Inc and renamed it Trident Space & Defense.
The new company specialises in three areas – space electronic components, advanced high-performance semiconductor packaging solutions and ground system services, including satellite TT&C systems. Trident expects 2011 revenue to be more than US$40m with an EBITDA margin of approximately 15%.
The closing of the transaction is dependent on regulatory approval and is expected to be completed in the first quarter of 2011. Once complete, TCS expects the acquisition to be earnings accretive with Trident being merged into TCS’ government segment.
Commenting on the transaction, Maurice Tose, TCS chairman and CEO, said: “Trident’s position as a key vendor to foreign governments and commercial space customers substantially broadens our global footprint.
“As part of this transaction, we will welcome the founder, chairman and CEO of Admiralty Partners, Jon Kutler, to our Board of Directors. Mr Kutler’s experience in the fields of aerospace and defence will help us with strategic initiatives to further enhance the company’s position as a global wireless solutions provider.”
Kutler, who has worked in the US Navy and on Wall Street as an investment banker and private equity executive, founded aerospace and defence focussed investment bank Quarterdeck Investment Partners in 1992 before selling it to Jefferies & Co in 2002 to focus purely on private equity investments. He has served as chairman of the White House Small Business Task Force on Defense Conversion as well as a member of an advisory panel established by the Congressional Office of Technology Assessment to evaluate the status of the space launch vehicle industry.
