Cubic Corporation 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.
