Integral Diversifies with CVG-Avtec Purchase
PARIS — Satellite control systems provider Integral Systems’ $34.7 million all-cash purchase of satellite ground terminal builder CVG-Avtec will help diversify Integral beyond its core U.S. Air Force market and complement the company’s existing business line, Integral Chief Executive Paul G. Casner said March 8.
Columbia, Md.-based Integral will be financing the acquisition in part with a three-year, $55 million line of credit recently secured.
CVG-Avtec, whose current management and 100 employees will be transferred into Integral as the new Integral Systems Satcom Solutions, reported about $33 million in revenue in the past 12 months. In a conference call with investors, Casner said the purchase will be immediately accretive to Integral’s per-share earnings in the current fiscal year, which ends Sept. 25.
Integral Chief Financial Officer William M. Bambarger said the purchase nonetheless would hit the company’s second-quarter financial performance with the arrival of “potential new costs to integrate the business” into Integral. He said Integral had not determined the total cost of the transaction beyond the cash payment to CVG-Avtec’s owners.
Chantilly, Va.-based CVG-Avtec’s customers include the U.S. Army, the U.S. Navy, the U.S. Coast Guard and the U.S. Department of Homeland Security — all agencies that Integral had targeted as potential new markets for its satellite control technology.
Casner said CVG-Avtec’s business is growing, and that its high-speed modems and receivers are among the products that Integral purchases from other sources and now will add to its own product portfolio.
CVG-Avtec’s satellite terminals are another product line that will be new for Integral, as is the company’s expertise in providing secure links between ground stations and unmanned aerial vehicles. Casner said the CVG-Avtec terminals provide a quick recovery of communications links lost during flight maneuvers or when a moving vehicle is not in line-of-sight contact with the communications satellite.
The acquisition “should give us access to markets we have been eyeing for some time now,” Casner said. “It broadens our customer base and our product base.”
Integral Systems is coming off what company management referred to as a disappointing year. Revenue, at $160 million, was unchanged from 2008. Integral recently announced a reorganization to better able the company’s different product lines to profit from one another.