[Satnews] Cubic Corporation (NYSE: CUB) today announced the acquisition of TeraLogics, LLC and the signing of a definitive agreement to acquire GATR Technologies, Inc. (GATR). The addition of TeraLogics and GATR will enhance Cubic’s stated strategy to expand its defense systems business by investing in a Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) portfolio focused on secure and expeditionary communications, and ISR Processing, Exploitation and Dissemination (PED).
TeraLogics is a leading provider of real-time Full Motion Video PED for the Department of Defense, the intelligence community and commercial customers based in Ashburn, Virginia. The purchase price is $39 million, including $9 million of contingent consideration, and subject to other customary adjustments per the terms of the stock purchase agreement.
TeraLogics’ ability to develop real-time video analysis and delivery software for Full Motion Video is complementary to Cubic’s existing tactical communications portfolio, and establishes Cubic as a key player in the ISR Full Motion Video market. In addition, TeraLogics’ current customer base extends Cubic’s customer reach and ability to bid on new contracts and enables access to critical Programs of Record supporting expeditionary warfare. Cubic’s established international presence will benefit further from global demand for TeraLogics’ products.
Cubic also entered into a definitive agreement to acquire Huntsville, Alabama-based GATR, a manufacturer of next-generation deployable satellite communication terminal solutions. The purchase price is $232.5 million, including $7.5 million of contingent consideration, and subject to customary pre- and post-close adjustments. The closing of the GATR acquisition is subject to regulatory approval under Hart-Scott-Rodino and is expected in Cubic’s second fiscal quarter 2016.
GATR expands Cubic’s technology leadership in satellite communications (SATCOM) and networking applications. GATR’s line of portable, inflatable SATCOM and C4ISR terminals supports mission-critical requirements for tactical communications in harsh and forward or remote deployed environments. Its intellectual property portfolio for its award-winning antenna solutions is a clear differentiator and complementary to existing Cubic product lines from the recent DTECH LABS, Inc., acquisition. 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. GATR also brings strong relationships on key Programs of Record and contract vehicles in addition to strengthening Cubic’s customer reach to international emergency agencies/forces with global deployment requirements and to the overall communications industry worldwide.
“The acquisition of TeraLogics and GATR represents powerful next steps in achieving our C4ISR growth strategy as they expand our footprint in the C4ISR and SATCOM markets,” said Bradley H. Feldmann, president and chief executive officer of Cubic Corporation. “The transformation of Cubic Global Defense Systems is well under way with these acquisitions, coupled with the excellent performance from DTECH, which we acquired in fiscal year 2015. 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.”
“We look forward to working with the TeraLogics and GATR leadership teams and employees,” said Mike Twyman, executive vice president, Communications, Intelligence and Surveillance Systems of Cubic Global Defense. “Their collective expertise, talent and innovative cultures will be an asset to Cubic, allowing us to better serve our customers.”
Cubic’s investments in its C4ISR portfolio, including DTECH, GATR, and TeraLogics, are anticipated to be accretive in fiscal year 2017.
Cubic Corporation will conduct a conference call on January 8, 2016 at 1:00 p.m. Eastern Time, where the company’s senior management team will make a brief presentation, followed by a question-and-answer session.
