L-3 Communications announced that it has agreed to acquire Nova Engineering for $45 M in cash, plus an additional purchase price not to exceed $10 M that is contingent upon Nova's future financial performance. The business is expected to generate annual sales of approximately $40 M for the year ending December 31, 2007, and will be included in L-3's Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C3ISR) reportable segment. The acquisition is expected to be completed in the third quarter of 2006, subject to customary closing conditions, and to be slightly accretive to L-3's earnings for 2006.
Located in Cincinnati, OH, Nova designs and manufactures state-of-the-art communication systems for network-centric warfare and technology-driven applications. Its businesses include unattended sensor communications systems, military test and training range instrumentation, and wireless modems. Nova provides software defined radios and technology for the Department of Defense (DoD) and aerospace prime system integrators, and develops application-specific digital and radio frequency (RF) chip technologies. Nova Engineering products are used with air vehicles, weapons, unmanned aerial vehicles (UAV) and space programs, and are used by the DoD, the Special Operations Command (SOCOM), aerospace prime system integrators, the intelligence community, first responders and industrial customers.
"Nova is a key addition to our C3ISR capabilities," said Michael T. Strianese, interim chief executive officer and chief financial officer of L-3 Communications. "The company has a premier position on critical DoD programs, including the Joint Tactical Radio System (JTRS), Tactical Remote Sensor Systems (TRSS), the Operational Test - Tactical Engagement System (OT-TES) and the US Army Spider Program."
"Nova technology and experience will enhance our existing high performance intelligence collection, imagery processing and satellite communications products," continued Strianese. "Their talents in communication system design, waveform processing, RF engineering, signal process, digital hardware and software development directly complement key L-3 C3ISR businesses."
Strianese also noted that Nova expands L-3's presence in a number of key platform areas. Nova provides an entree into the JTRS Cluster I, expands L-3's position on the Airborne Maritime Fixed (AMF) (JTRS III/IV) program and enhances the company's ability to market its products into the small UAV market.