[SatNews] COM DEV International Ltd. (TSX:CDV) has a new order to develop ferrite switch networks for an environmental satellite for a European customer.
The initial Authorization to Proceed (ATP) is valued at $1.2 million and is expected to lead to a full contract valued in excess of $5 million. Work will be carried out at the Company's facilities in the United Kingdom through to the end of fiscal 2017. All figures in this release are stated in Canadian dollars.
Ferrite switch networks are complex, engineered-to-order, high-speed RF switching systems used in environmental space instruments. They are used to perform accurate height determinations of land, sea and ice features and are also vital in measuring the heat transfer between the sea and the atmosphere. These parameters help scientists monitor changes that can affect the planet's weather and provide key inputs into climate models.
COM DEV has built a strong ferrite capability in the U.K., both at its long-standing Aylesbury location, and more recently with the acquisition of Edinburgh-based MESL Microwave in December of 2014. That acquisition extended the Company's capacity to address a significant market opportunity for ferrite switch networks. Since mid-2014, COM DEV has secured $27 million of ferrite work, assuming existing ATPs proceed to full contract awards.
"We are seeing the benefits of our strategy of putting in place the technology, facilities and personnel to deliver first class products in a field where we have a distinct competitive advantage," said Rob Spurrett, President of COM DEV's Systems Division. "These ferrite switch network assemblies are complex and demanding and it is one area where the UK has a strong lead, not only in Europe but also across the world. The technology we design is a critical part of environmental satellite missions already in orbit and those in the design phase, and we are confident of securing additional opportunities in the next several quarters."
Acquiring Minds Wish To Know...
Additionally, COM DEV completed their previously announced purchase of Pacific Wave Systems (PWS), a leading manufacturer of waveguides for the global satellite industry.
The US$20.1 million purchase has been financed by a combination of cash on hand and a C$20 million acquisition term debt facility. The purchase price represents a multiple of 6.9 times adjusted EBITDA for PWS’s most recent fiscal year ended February 2015 and 6.4 times projected adjusted EBITDA for the current year. COM DEV expects the transaction to be accretive to its EPS in fiscal 2015.
Founded 25 years ago in Garden Grove, California, PWS has a solid track record of quality and delivery, and relationships with most of the large satellite prime contractors. This transaction strengthens COM DEV’s portfolio with a complementary space product that is expected to benefit from market trends including the growth in High-Throughput Satellites (HTS). Advising the Company on this acquisition transaction was The Black Box Institute, based in Toronto, Canada, with legal advisors that included Gardiner Roberts, LLP in Toronto, and Troy Gould PC in Los Angeles, California.