The Vitec Group plc Acquisition of Haigh-Farr
The Vitec Group plc ("Vitec"), the international provider of products and services for the broadcast, photographic, and MAG (military, aerospace and government) markets, announces that it has agreed to acquire the entire share capital of Haigh-Farr Inc. ("Haigh-Farr") for cash consideration of up to $36 million (£23.1 million).
Haigh-Farr is a world leader in the design, development and manufacture of flight-body antennae for simple and sophisticated communication applications. It serves the defence, space and commercial markets providing high quality, application specific antennae for challenging communication environments.
Based in Bedford, New Hampshire, US, Haigh-Farr has over thirty years of experience in the design and manufacture of high quality antennae. It offers a broad range of antenna technologies and has an international reputation for product and performance excellence. It pioneered the Wraparound™ antenna concept which has enhanced performance capabilities of aircraft, missiles and spacecraft worldwide. Haigh-Farr's customers include a number of leading US prime contractors.
The acquisition will complement Vitec's existing range of MAG activities where Vitec provides leading edge digital communication transmission technologies for mission-critical applications in the military, aerospace, government, law enforcement and broadcast markets. Haigh-Farr will operate as an autonomous business alongside IMT within Vitec's Videocom Division and its existing senior management, including the CEO, David Farr and the Vice President, Norene Farr, will remain with the business.
This transaction is subject to approval from The Committee on Foreign Investment in the United States and will be completed upon receiving this approval which is expected by the end of November 2011.
For the financial year ended 31 December 2010, Haigh-Farr generated an unaudited adjusted profit before tax of $3.5 million (£2.2 million), and an adjusted EBITDA of $3.9 million (£2.5 million). As at 31 December 2010, Haigh-Farr had adjusted gross assets of $1.8 million (£1.2 million).
Under the terms of the acquisition, an initial consideration of $31 million (£19.9 million) will be paid on completion and is subject to post-completion adjustments for changes in working capital. Up to a further $5.0 million (£3.2 million) is payable ($2.5 million in 2013 and $2.5 million in 2014) subject to the current owners remaining employed with the business and the performance of Haigh-Farr for the years ending 31 December 2012 and 2013.
The consideration will be paid in cash, financed out of Vitec's existing banking facilities. The Board expects the acquisition to be earnings enhancing in its first full year of ownership on an adjusted basis - see note 1.
Stephen Bird, Vitec's Group Chief Executive, commented on the acquisition:
"We are delighted to announce the acquisition of Haigh-Farr, which is in line with our strategy of developing the Group's mission-critical MAG activities. Haigh-Farr is a world-class business which further develops and complements our expertise in sophisticated communication applications."