L-3 Communications has entered into a contract to acquire Micreo Limited, a specialised Electronic Warfare subsystems provider in Australia. The acquisition is expected to be completed during September 2016 following the satisfaction of standard closing conditions. Following the acquisition, Micreo Limited will be integrated into the Electronic Systems Segment and will be renamed L-3 Micreo. Micreo is projected to generate AU$35 million (U$27 million) in sales for the year ending 31 December 2017 and to be accretive to L-3s earnings.
Based in Brisbane, Australia, Micreo specialises in solutions that utilise high-performance microwave, millimetre wave and photonic technology that complements L-3s wide range of sensors and will strengthen L-3s development of future products in the higher EW RF bandwidth. The companys patented products are market-ready for ISR and EW applications, and it currently supports a variety of airborne, land and security programs in Australia. The business also has counter-IED capabilities that will specifically enhance L-3s existing range of man-portable and vehicle electronic counter measures (ECM) equipment. Micreo has approximately 70 employees.
As part of L-3, Micreo will expand our technical expertise and offerings, providing immediate synergies with L-3 products as well as adjacent growth opportunities across our existing business, Michael T. Strianese, L-3s Chairman and CEO, said. Importantly, this addition will help drive L-3s international growth, while providing cross-selling opportunities in key markets.
L-3 Micreo will enhance our core business in Australia, supporting multiple L-3 segments, added Christopher E. Kubasik, L-3s President and Chief Operating Officer. In addition to our ongoing SATCOM, Maritime, Warrior Systems, Aviation and aircraft modification programs, Micreo will add new in-country resources for our growing customer base in Australia and the Asia-Pacific region.
L-3 Micreo will report directly to L-3 TRL, part of the Integrated Sensor Systems (ISS) sector within Electronic Systems, L-3s largest and most diverse business segment. "Within ISS, we deliver leading-edge sensor solutions in all domains from submarines to surface ships, soldiers, ground vehicles, and airborne and space platforms," the company told MT. "As part of ISS, L-3 Micreo will play a critical role in helping to further expand our business in these areas with particular focus on our EW portfolio."
There are many synergies within Micreo and L-3 TRL which makes this acquisition an excellent opportunity for both businesses; it increases the value proposition of both EW and emerging cyber requirements, provides an increased indigenous capability, supports the close G2G relationships, aligns similar cultures and ways of working and essentially enables the ability to access multiple international markets, increasing the number of exports for both companies.
"We are committed to investing in technology and expertise across both businesses to increase our capability to support both the UK and Australian defence and security services," the company further explained. "Crucially, this acquisition will present both businesses with the opportunity to increase our technical capabilities and product range and enable us to offer the UKs defence and security services enhanced EW integration capabilities in the future. Australia is a strategic country for L-3 in line with the Governments SDSR. The FVEY alliance and FPDA arrangements also provide an environment where both companies share close government relationships in both the UK and Australia. This acquisition will assist the export of TRL products to the Australian market and the wider Asia-Pacific region and support the key programmes L-3 TRL is currently bidding for."
We have been reviewing a number of opportunities to both expand our capability portfolio but also increase our international presence, and were pleased to announce this acquisition, which supports both of these objectives, said Alan Titheridge, L-3s Vice President in Australia. Micreo not only complements L-3s increasing portfolio of ISR and EW system capabilities but also increases our presence in Australia and supports a number of opportunities we are currently pursuing.
L-3 TRL specialises in the gathering and protection of intelligence through EW and Cyber products and systems, Greg Roberts, L-3 TRLs president, continued. The acquisition of Micreo will allow the development of a multi-domestic and indigenous business, building on the strong UK to Australian relationships in defense and security.
We set out to find a shareholder exit that would enable the business to grow and to look after employee and customer needs as well as satisfy our shareholders, Tim Shaw, Micreo CEO, concluded. Shaw will be taking on the role of Chairman at L-3 Micreo and the entire management team will continue their work at L-3 Micreo. Im satisfied that we have achieved those aims and the company will continue to grow and to provide rewarding and interesting work.
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