Effective April 1, 2019, Calian Group Ltd. (TSX:CGY) has acquired SatService, Gesellschaft für Kommunikationssysteme mbH. (“SatService”), a solid player in the European satellite ground systems market.
Based in Steisslingen, Germany, SatService offers innovative engineering solutions and products for the satellite communications market. Its business will support Calian SED’s expansion in the European market with turnkey satellite solutions as well as products. SatService product offerings include the sat-nms line of first-class software and hardware solutions for antenna control and tracking, monitoring and control systems and L-band transmission.
Patrick Thera, President, Calian SED, said SatService has a strong technical team and a reputation for excellent service and support. Calian SED's skillsets and product offerings are complementary which includes the firm's combined abilities to provide turnkey satellite radio-frequency (RF) ground systems. SatService offers innovative products that serve as key building blocks for communication network solutions, including antenna control and L-band signal management. The companies' combined locations in Germany and Canada broaden our base of operations to support customers throughout Europe, North America and beyond.
Michael Ulbricht, the former owner of SatService, said the company is pleased to become part of the Calian SED team and increase the firm's coverage of the satellite ground station market — he will continue as managing director for the next few years to support and grow the business that he has dedicated more than 20 years to building. As always, he said, he and his team will continue to solidly support customers with innovative engineering and rock-solid implementation.
Patrick Houston, CFO, Calian, reported that the purchase price is 6,450,000 euros on closing and two additional payments in December 2019 and December 2020, based on the achievement of a certain level of EBITDA in each of those periods. With an excellent margin profile and annual revenues of approximately CAD $10 million, the company expects this acquisition to be EBITDA accretive from day one. Further details regarding the acquisition will be provided with Calian’s results for the second quarter ending March 31, 2019. SatService’ results will be consolidated and reported as part of Calian’s Systems Engineering Division (SED).
Kevin Ford, CEO, Calian, said regarding the company's first acquisition that although Calian SED has delivered systems on every continent but Antarctica, this gives the company their first significant physical presence in Europe, broadening the firm's global footprint. This acquisition supports the customer diversification and service line evolution pillars of the company's growth strategy by bringing new innovations and products into the firm's satellite communications business while increasing capacity for growth in our targeted customer segments.