1 / 8

Acquisition of REMEC Defense and Space

Acquisition of REMEC Defense and Space. December 2004. Highlights. REMEC Defense: is a leading company in the field of microwave assemblies (IMAs) and sub systems for radar and communications.

wgilliard
Download Presentation

Acquisition of REMEC Defense and Space

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Acquisition of REMEC Defense and Space December 2004

  2. Highlights REMEC Defense: • is a leading company in the field of microwave assemblies (IMAs) and sub systems for radar and communications. • delivers a leading position in active, as well as extending Chelton’s passive, microwave sub systems and components capability. • participates on a host of top US defence programmes and platforms including: F-16, F/A-18, F/A-22, F-35 (Joint Strike Fighter), the Joint Common Missile, AMRAAM, AARGM, Tomahawk, and Sea Sparrow. • doubles the revenues of Chelton’s microwave business in the US. • has had a compound annual revenue growth over the last two years of 15% which is expected to continue. • On completion, the transaction is anticipated to be immediately earnings enhancing. 1

  3. Acquisition Criteria and Process • Existing and/or adjacent market • Product or technology extension • Minimum 9% post-tax ROIC • Avoid turnaround situations • Growth businesses • Synergies are upside; not used to justify price • Rapidly leverage towards average ROIC 2

  4. REMEC Defense and Space Division • Wholly owned subsidiary of REMEC Inc • HQ in San Diego • Manufacturing in San Diego and Tijuana • 1100 employees • Excellent management and technical expertise • Leading technology in integrated microwave assembly (IMA) and subsystem participation supports revenue growth • Capitalise on outsourcing from primes • Captures higher value content per platform • Technology discriminator • Strong financial performance • Revenue CAGR = 15% over past two years • Strong order book coupled with excellent sole source programme positions 3

  5. Major Programmes F-16 Tactical Fighter for the US Air Force and International Markets F-18 Tactical Fighter for the US Navy F/A-22 Tactical Fighter for the US Air Force F-35 Joint Strike Fighter for the US Air Force, Navy and Marines Integrated Defensive Electronic Countermeasure System (IDECM) for the US Navy Advanced Medium Range Air-to-Air Missile (AMRAAM) program for the U.S. Air Force Longbow Missile and RADAR programs for the US Army Standard Missile for the US Navy and International Markets Tomahawk Cruise Missile for the US Navy Tube Launched, Optically Tracked, Wire Guided (TOW) Missile for the US Army New Evolved Sea Sparrow (ESSM) Missile for the US Navy and International Markets Advanced Anti-Radiation Guided Missile (AARGM) for the US Navy 4

  6. Major Customers • ATK • BAE Systems • Boeing • ITT Industries • Lockheed Martin • Northrop Grumman • Raytheon 5

  7. Financials • Consideration $260m in cash. • Effective price $225m. • NPV of tax benefit from goodwill amortisation. • Growth rates to continue trend at 15% per annum. • Prospective multiple of circa 11.7 x 2005 expected ebita. • Anticipated to be immediately earnings enhancing upon completion. • Expected to deliver returns above cost of capital by 2007. 6

  8. Summary • Greatly enhances Chelton Microwave’s already strong business and technology. • Delivers leading position in active microwave sub systems. • Critical part of architecture in Network centric warfare. • Rapid growth, far above Aerospace and Defence average. • Excellent position on US DoD programmes for 25 years. • Strong financial returns. 7

More Related