TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) has acquired substantially all of the assets of privately-held Sidereal Solutions, Inc. (Sidereal), a satellite communications technology engineering, operations and maintenance support services company. Consideration for the purchase was cash, approximately 244,000 shares of TCS Class A common stock, and contingent consideration based on the business’ gross profit in 2010 and 2011.
Sidereal has been a business partner of TCS’ government solutions group since 2007, providing field service support for satellite communications and network engineering, technical writing and training, and other information technology services in support of TCS’ Swiftlink® line of deployable systems. Based in the Metro Atlanta area, Sidereal’s more than forty professionals comprise personnel from all four U.S. Military service components with expertise in the logistics support of military operations for tactical communications, supporting multiple system designs in addition to Swiftlink. Post-acquisition operations will be reported as part of the TCS government segment’s services category. Sidereal has grown rapidly, with an expected fourth quarter annualized revenue run rate of about US$6 million per quarter, and expected EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of about 17 percent of revenue. The acquisition is expected to be immediately accretive to TSYS earnings per share.