Canadian space hardware subsystems manufacturer Com Dev International has signed an agreement to acquire 100% of MESL Microwave Ltd for £12.8m (US$20.1m).
The purchase price represents an EBITDA multiple of 8.5x MESL’s projected full year EBITDA and…
Canadian space hardware subsystems manufacturer Com Dev International has signed an agreement to acquire 100% of MESL Microwave Ltd for £12.8m (US$20.1m).
The purchase price represents an EBITDA multiple of 8.5x MESL’s projected full year EBITDA and is being financed by a combination of cash on hand and additional borrowings under Com Dev’s existing credit facility.
The company expects the transaction to close 31 December 2014 and be accretive to EBITDA and EPS in fiscal 2015.
Headquartered in Edinburgh, MESL designs and manufactures components and subsystems for the radar, communications, defence and aerospace industries.
In recent years the company has made significant investments in its space manufacturing facilities and now supplies satellite communication components to a number of leading payload manufacturers.
For Com Dev, the transaction establishes it as the dominant player in high-power, high-speed ferrite material-based switching networks that used in space-based earth-observation and telecommunications satellites. The company sees unprecedented demand for these over the next decade.
It also adds skills, complementary capability and capacity to the company’s current UK facilities to address the rapidly expanding demand for these products.
In addition, Com Dev will have greater access to the aerospace market, something it has been looking to increasingly participate in. The comapny also hopes that it will provide opportunities to bring some of the aerospace technologies and manufacturing competence into the space domain.
Commenting on the deal, Rob Spurrett, president of Com Dev International Systems said: “Cross-party support from within government for the UK’s Space Innovation and Growth Strategy, and the leadership of the UK Space Agency and Innovate UK have shown us that the UK is serious about exploiting the potential of the space industry for the long term.
“The UK is a great place to develop new technology thanks to the incentives that are available, and the UK’s increasing commitment to the European Space Agency and other international partnerships.”
Over the past couple of years, the UK government has sought to dramatically ramp up its support for the space industry.
The UK Space Agency recently announced it was making an extra investment of over £200m (US$315m) in Europe’s space programme while also pledging £32m (US$51m) in grants to British companies developing satellite technologies.
On the regulatory side, the UK parliament has finally scrapped the 6% tax on insurance premiums for satellite operators.
