US satcoms equipment firm CPI International has acquired Texas-based satellite antenna maker ASC Signal for an enterprise value of US$50m.
US satcoms equipment firm CPI International has acquired Texas-based satellite antenna maker ASC Signal for an enterprise value of US$50m.
It is the latest in a number of bolt-on deals that private equity-backed CPI has made to expand its reach in recent years.
The group said its latest deal will broaden its portfolio to include products ranging from satcoms antennas with UHF to V-band capabilities, to radar systems for air traffic control and weather applications.
“The addition of ASC Signal’s products and technology broadens CPI’s existing offerings for communications and radar customers to now include one of the industry’s broadest portfolios of high-performance, large-aperture fixed and mobile antennas,” CPI CEO Joe Caldarelli said.
“ASC Signal has more than 40 years of experience serving a diverse, multinational customer base, resulting in strong, long-term customer relationships and antenna installations in more than 140 countries.”
CPI bought the group through its microwave product unit Communications & Power Industries from Resilience Capital Partners, a private equity firm that snapped up control of what would become ASC in 2008 for US$8m in cash and about US$5m in notes.
Andrew Corporation, the subsidiary of US communications equipment vendor CommScope that sold ASC to Resilience, had also expected to receive up to US$25m in cash after three years, based on certain milestones.
ASC currently has about 125 employees, and will maintain its leadership and personnel because it will be operated as an independent division of CPI.
Keith Buckley, ASC’s CEO, said: “We thank Resilience for its partnership and support in
helping us improve operations and strengthen our financial position over the past seven years.
“And now, we are delighted to join CPI. In addition to aligning complementary product portfolios and customer bases, this acquisition will provide ASC Signal with access to CPI’s well-established worldwide resources, enabling us to further grow the business and better serve our existing customer base.”
CPI expects ASC to generate about US$50m in annual sales in the first year following the acquisition, as well as bringing positive contributions to its earnings.
Philpott Ball & Werner acted as exclusive investment banker and financial adviser to ASC, and was also Resilience’s financial adviser on the deal. Resilience hired Jones Day as legal counsel.
Private equity firm Veritas Capital acquired CPI in December 2010 through a US$525m leveraged buyout. CPI’s bolt-on acquisitions since then include Australian peer Codan Satcom and US-based Locus Microwave, and M C L, which makes power amplifier products and systems.
The group made its last notable acquisition in October 2013 when it bought Radant Technologies, a US designer and maker of composite radomes, reflector antennas and structures for aerospace and naval applications.
Veritas, meanwhile, has been consistently active in the commercial space sector and has built up a sizeable satellite complements portfolio.
It paid around US$381m for US satcoms components maker Anaren in November 2013, and in late 2014 bought Emcore Corp’s satellite solar panel assets for US$150m in cash.
Veritas also held a sizeable stake in US radio frequency semiconductor specialist Aeroflex, which was sold to UK defence and space technology firm Cobham for US$1.46bn in May 2014.
