GATR Technologies has become the latest satcoms firm to be swallowed up after Cubic Corporation agreed a US$233m deal to diversify its defence business.
GATR Technologies has become the latest satcoms firm to be swallowed up after Cubic Corporation (NYSE:CUB) agreed a US$233m deal to diversify its defence business.
The target offers inflatable satcoms antennas – primarily used by the military and in disaster zones – and claims to be the only company in the world to do so.
Cubic said GATR’s intellectual property portfolio made it particularly attractive, and that it would complement its acquisition of military communications specialist DTech Labs 12 months prior.
“The combination of those existing products with GATR’s superior offering will enable a broader selection for satcom applications and expansion of sales to both domestic and international customers,” Cubic said in a statement.
A spokesperson described the deal as a “strategic diversification play”, adding that Cubic would continue to look at acquisitions of secure communications businesses, including satcoms.
In addition, Huntsville, Alabama-based GATR extends Cubic’s customer reach to international emergency agencies with global deployment requirements.
Up until now, Cubic has not had satellite technology, only offering communication networking and line-of-sight communication capabilities.
Expected to close in Q2 2016, the acquisition is subject to customary pre- and post-close adjustments and antitrust approval under Hart-Scott-Rodino. The US$233m purchase price includes US$7.5m of contingent consideration.
Alongside GATR, Cubic has also spent US$39m on TeraLogics, which provides video solutions to the defence and intelligence communities, and to commercial customers.
San Diego-based Cubic said it has used its revolving credit facility to buy TeraLogics. It will disclose the financing for GATR on 8 January, the spokesperson said. Holland & Knight provided legal advice to Cubic on the transactions.
Together the purchases are part of Cubic’s strategy to expand its defence business by investing in a command, control, communications, computers, intelligence, surveillance and reconnaissance – or C4ISR – portfolio.
Bradley Feldmann, Cubic’s CEO, said: “Having established a focused strategy in the C4ISR sector, we are working aggressively to build scale with increased shareholder returns in higher growth and higher margin markets.”
