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EMS Technologies Inc. announced that it signed a definitive agreement to acquire DSpace, Adelaide, Australia, for (US) $5.7 M. The acquisition will enable EMS to build on the strength of its SATCOM business, which grew approximately 40 percent last year, and to exploit rising demand for Inmarsat’s BGAN services in new markets.
DSpace, founded in 1995, has been instrumental in the development of Inmarsat's BGAN satellite radio protocols. BGAN is Inmarsat’s ground-breaking mobile broadband service, available in 175 countries, that gives voice and data connectivity beyond the reach of terrestrial networks. DSpace’s new low cost software-defined radio will allow a variety of satellite communication platforms to be continuously upgraded as technology rapidly improves. DSpace revenues have increased rapidly over the last 24 months.
“DSpace is an important acquisition for EMS, reflecting our strategy to make key investments in high-growth businesses that complement our core strengths – in this case, broadband mobile communications,” said EMS Technologies’ president and CEO, Paul Domorski. “DSpace will further strengthen our product leadership in aero-broadband for military, corporate and commercial aircraft, while giving us the ability to more aggressively pursue new mobile satellite service (MSS) markets in the land-mobile and maritime sectors.”
A satellite technology consulting firm, NSR, reports, in its upcoming Mobile Satellite Services, 3rd Edition Report, that equipment revenues for the principal MSS systems (excluding mobile C-, Ku- and S-band) totaled approximately $334 M in 2006, and these revenues are expected to grow to $1.2 B by 2012.
DSpace will become part of the EMS SATCOM Division, but will remain in its current location in Australia. Domorski notes that with the emergence of new high-bandwidth, low cost, global communications services such as BGAN, a wide range of new products are being developed for commercial and military customers around the world.
"We are addressing these opportunities with our own eNfusion™ Broadband airborne product line and through partners who are already leaders respectively in aviation, land and maritime markets, and who will benefit from the addition of new core satellite communications technology," he said. “The unique skills and experience required for these engineering-intensive Satcom developments are very difficult to find, but DSpace is just what we need to bolster our existing teams."
DSpace general manager Paul Weiss sees the acquisition as a win-win situation for both firms: “We are pleased to be part of a larger team. By combining our technology strengths with EMS Technologies’ market leadership in aero-broadband, we now have the opportunity to take the combined businesses to new levels of success.” The transaction, which is slated to close in early July subject to certain closing conditions, is expected to increase future profitability, but due to the timing will not materially affect 2007 guidance.
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