Mobile technology company TeleCommunication Systems will pay an undisclosed amount for private equity-backed Trident Space & Defense. Torrance, Calif.-based Trident develops engineering and electronics technology for space and defense markets. The company is owned by private equity firm Admiralty Partners. No financial terms of the acquisition were released. Publicly traded TeleCommunication Systems is based in Annapolis, Maryland.
TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS), a world leader in highly reliable and secure mobile communication technology, has signed a definitive agreement to acquire privately-held Trident Space & Defense, LLC, a leading provider of engineering and electronics solutions for global space and defense markets based in Torrance, California. Consideration for the acquisition includes the payment of cash and three million shares of TCS Class A common stock.
Trident is currently owned by the private equity firm, Admiralty Partners, Inc., and certain of its affiliates. Trident was originally established as TRW Components International in 1976 and for more than 30 years has been a respected source for satellite communications engineered solutions. The closing of the acquisition is dependent on regulatory approval and other customary closing conditions, and is expected to be completed in the first quarter of 2011.
The acquisition of Trident will extend TCS’s core competencies in end-to-end secure wireless communication solutions, including patented technology. It will also provide an AS/EN/JISQ9100/ISO 9001-certified engineering design and packaging center for TCS’s SwiftLink® line of satellite-based communication systems.
Trident expects 2011 revenue to be more than $40 million, with an EBITDA margin of approximately 15%. The transaction is anticipated to be accretive to TCS’s net income and will be reported as part of TCS’s government segment.
“Trident’s position as a key vendor to foreign governments and commercial space customers substantially broadens our global footprint,” said Maurice B. Tosé, TCS chairman and CEO. “As part of this transaction, we will welcome the founder, chairman and CEO of Admiralty Partners, Jon Kutler, to our Board of Directors. Mr. Kutler’s experience in the fields of aerospace and defense will help us with strategic initiatives to further enhance the company’s position as a global wireless solutions provider across a range of markets, with an important emphasis on creating long-term shareholder value. We look forward to benefiting from his extensive knowledge and highly accomplished experience.”
Kutler is a recognized investor, investment banker and expert in the aerospace and defense industries. After service in the U.S. Navy and nearly a decade on Wall Street, Kutler founded Quarterdeck Investment Partners, a leading international investment bank focused on the global aerospace and defense markets. He sold Quarterdeck to Jefferies & Company in 2002 to focus on private equity investments under Admiralty Partners. Kutler has been profiled in BusinessWeek, The New York Times, Fortune, Institutional Investor, The Los Angeles Times, Defense News, and Aviation Week & Space Technology, which have also featured his articles on consolidation, restructuring, and industry trends. He has also been a frequent commentator regarding industry issues on CNN, CNBC and Bloomberg Television.
Kutler has testified before Congressional committees, served as chairman of a White House panel, and as a member of an advisory panel established by the Congressional Office of Technology Assessment to evaluate the status of the space launch vehicle industry. He is a Trustee of the California Institute of Technology, where he serves as vice chairman of the Jet Propulsion Laboratory and as a member of the Technology Transfer Committee. Kutler is a graduate of the United States Naval Academy and holds a Bachelor of Science degree in Naval Architecture. He received his Masters of Business Administration from Harvard University.
About Trident Space & Defense, LLC
Trident Space & Defense, formerly TRW Components International Inc., was established in 1976 as a subsidiary of TRW Inc. (now Northrop Grumman Corporation), and has successfully provided parts, procurement services, and engineering solutions for space, military and industrial markets worldwide for more than 34 years. Trident was acquired by Admiralty Partners, Inc. in March 2007 and is composed of three operating units. The EEE Space Electronic Components business unit is a supplier of high reliability electronic components and design support services. The Advanced Products business unit designs and manufactures advanced custom multi-chip modules, dense systems-in-a-package solutions and Solid-State Drives intended for ruggedized applications. The Ground Systems business unit supplies engineering services, specializing in design, development and integration services, launch support and satellite telemetry, tracking and control systems. For more information visit www.tridentsd.com. For more about Admiralty Partners, visit www.admiraltypartners.com.
About TeleCommunication Systems, Inc.
TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) is a world leader in highly reliable and secure mobile communication technology. TCS infrastructure forms the foundation for market leading solutions in E9-1-1, text messaging, commercial location and deployable wireless communications. TCS is at the forefront of new mobile cloud computing services providing wireless applications for navigation, hyper-local search, asset tracking, social applications and telematics. Millions of consumers around the world use TCS wireless apps as a fundamental part of their daily lives. Government agencies utilize TCS’ cyber security expertise and professional services. Headquartered in Annapolis, MD, TCS maintains technical, service and sales offices around the world. To learn more about emerging and innovative wireless technologies, visit www.telecomsys.com.