In a statement yesterday, ground control system manufacturer Integral Systems announced that it has retained its financial adviser Stone Key Partners, further fuelling speculation about a potential sale.
The company explained that the adviser would help…
In a statement yesterday, ground control system manufacturer Integral Systems announced that it has retained its financial adviser Stone Key Partners, further fuelling speculation about a potential sale.
The company explained that the adviser would help it review its strategic options to improve shareholder value, including a potential M&A or a sale. However, it added that the board of directors might decide not to pursue any of these alternatives.
In an email to SatelliteFinance, a spokesman for the company declined to comment beyond what is included in the press release.
However, this announcement confirms earlier rumours about a potential sale of Integral. According to previous reports, the manufacturer has been weighing up its strategic options ever since the nomination of two new directors, Brian Kahn and Melvin Keating, in October 2010 from Vintage Partners, its largest shareholder with around 10%.
Vintage Capital specialises in corporate spinoffs, management buyouts and build-up transactions and back in February 2009, Kahn and Keating were appointed to the board of White Electronics, a semiconductor products manufacturer for the wired and wireless communications industry. Less than a year later, it was announced that White Electronic would be sold to Microsemi, another semiconductor company.
Among the companies rumoured to be interested in buying Integral are Comtech Telecommunications, the communications products developer which recently ended its merger talks with CPI International, as well as satellite specialist ViaSat and French defence and aerospace and defence giant Thales.
According to one report, other potential bidders may include the acquisitive Harris Corp, aerospace and defence company Rockwell Collins as well as Lockheed Martin and Boeing.
Integral has itself been acquisitive recently. In mid-2010, the company bought secure satcom solutions firm CVG and its subsidiary Avtec Systems for US$34.67m. It also purchased, last April, certain assets of Sophia Wireless, which makes component and system configurations for the satellite communications industry.
Integrals results were badly hit by the downturn, subsequently leading to the departure of former CEO John Higginbotham in mid-2009, but recently there have been signs of a recovery. For the fourth quarter of 2010, Integral posted revenue of US$55m, which is a 42.7% increase on Q4 2009. It also reported a profit of US$1.2m compared with a loss of US$1.6m for the same period a year ago.
In a statement published early December, Christopher Roberts, CFO of Integral Systems, said: “I am encouraged by the fourth quarter results, but am well aware that we still have a lot of work to do. We remain committed to reducing corporate costs, meeting our regulatory obligations and continuing operations growth. I am optimistic that fiscal year 2011 will reflect the benefits of our focus on cost reduction and revenue expansion and will provide value to our shareholders.”
