COM DEV enters waveguide market with acquisition of Pacific Wave Systems
April 1, 2015
COM DEV International Ltd. announced an
agreement to acquire Pacific Wave Systems (PWS), a leading
manufacturer of waveguides for the global satellite industry,
for US$20.1 million. Founded 25 years ago in Garden Grove,
California, PWS has a solid track record of quality and
delivery, and relationships with most of the large satellite
prime contractors. The transaction strengthens COM DEV’s
portfolio with a complementary space product that is expected to
benefit from market trends including the growth in
high-throughput satellites.
“This acquisition is another important step in our strategy of
expanding our core space equipment business in areas of market
growth,” said Michael Pley, CEO of COM DEV. “PWS is a respected
leader in the space waveguide market, and bolstered by the
production expertise, scale and 40-year heritage of COM DEV, we
believe they can become the dominant player.”
Waveguides play an important part in the overall performance of
satellite payloads. They are designed to efficiently direct
electromagnetic signals between various components, including
the filters and switches that COM DEV produces. COM DEV intends
to explore opportunities to combine waveguides with its other
products to deliver value to customers through more integrated
solutions.
“We are very excited to become part of the COM DEV team,” said
David Biele, president of Pacific Wave Systems. “We anticipate
the introduction of high throughput satellites to drive a
significant increase in demand for waveguides. We will be well
positioned to capture and deliver on these larger orders as part
of a major organization with COM DEV’s reputation.”
Approximately 10% of the US$20.1 million purchase price
represents the equity interest of the PWS management group, with
payment deferred and subject in part to the achievement of
specified performance targets over the next four years.
The purchase price represents a multiple of 6.9 times adjusted EBITDA for PWS’s most recent fiscal year ended February 2015 and 6.4 times projected adjusted EBITDA for the current year. The transaction will be financed by a combination of cash on hand and use of an acquisition term debt facility, and is expected to close in the third quarter of fiscal 2015, subject to customary conditions. COM DEV expects the transaction to be accretive to its EPS in fiscal 2015.