Pebble Beach Regulatory News (PEB)

21 Aug 2008 07:00



21 August 2008

Vislink plc 

Acquisition of Pacific Microwave Research Inc

Vislink plc, ("the Group"), the leading supplier of microwave radio and satellite transmission products for the broadcast and security markets and CCTV systems for the marine security market, announces that it has reached agreement to acquire 100% of the issued share capital of Pacific Microwave Research Inc ("PMR"), for a maximum cash consideration, dependent on performance, of US$17.0 million (£9.1 million). The acquisition of PMR is expected to complete before the end of September.

The initial consideration of $10.0 million (£5.4 million) has been funded out of the Group's existing multi-currency bank facility. The deferred consideration of $7.0 million (£3.7 million) is payable over the period to 30 September 2012 based on revenue performance.

PMR, incorporated in the State of California, is a design, engineering and manufacturing technology company specializing in analogue and digital microwave video transmission solutions for law enforcement, Homeland Security, and military applications. PMR products are used for video evidence collection, covert surveillance, unmanned ground vehicles (UGV), unmanned aerial vehicles (UAV), and flight test air-to-ground image transmission. In the year ended 31 December 2007 PMR generated a profit before tax of $2.2 million (£1.2 million) on sales of $4.7 million (£2.5 million). The business currently has gross tangible assets of approximately $1.6 million (£0.9 million). The acquisition is expected to be earnings neutral in 2008 but earnings enhancing from 2009 onwards (excluding the impact of the amortisation of acquired intangible assets). This statement is not a profits forecast and should not be taken to mean that profits in any period will be greater than or equal to profits in a preceding period.

The acquisition of PMR will enhance the Group's product offering to the US and international Law Enforcement and Security ("LES") markets, whilst complementing the product offering that already exists within the Group's RF businesses. In addition, PMR brings the Group a new revenue stream from the L-band relocation programme that requires procurement of new technology as part of the Federal government acquisition of new surveillance technology. PMR has already won contracts to meet this requirement.

The principal shareholders of PMR, who have been instrumental in the development of the business, will remain at PMR in their existing roles as the Group looks to capitalise on the opportunities in the LES market. Chris Durso, the current President of PMR, will maintain his primary role as Vice President of Business Development. He will remain the LES industry lead in developing new business and programs for the Americas and help to coordinate the International LES markets for the Vislink Group. David Dirdo will remain Vice President of LES Engineering. 

Looking forward, PMR will concentrate on LES sales and new product development for the Vislink Group. PMR will be the Americas research and development centre of excellence for LES microwave development and will work closely with Link Research, MRC and the Vislink Group CTO to coordinate all LES microwave activities throughout the Vislink Group.

Commenting on the acquisition, Ian Scott-Gall, Chief Executive, said:

"We are pleased with the acquisition of PMR, which enhances our product portfolio for the important LES markets. 

We will integrate PMR's business into the Group's US operations whilst coordinating its international sales through our affiliates, thereby building our position as a global player in this exciting market"

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