Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) is continuing its expansion and deepening its defense business. The company today signed a definitive agreement to acquire Wavestream Corporation of the US for $130 million. Gilat expects to close the deal within three months.
Gilat said that it will finance the acquisition from its own resources, but added that it might raise a limited amount of financing either before or after closing to replenish its cash reserves.
Gilat said that the acquisition of Wavestream is Gilat's largest acquisition in over a decade. It follows the acquisition of mobile TV and satellite antenna systems developer RaySat Antenna Systems LLC for $25 million in March. RaySat's systems are designed for civilian, emergency services, and military uses.
Gilat chairman and CEO Amiram Levinberg said that the firm considers Wavestream to be synergetic with its acquisition of RaySat.
Wavestream is a growing and profitable company that develops high power solid state amplifiers (SSPA) and block upconverters (BUC) designed for mobile and fixed satellite communication (satcom) systems worldwide. The company's customers are mostly large integrators which use its fixed and mobile satellite communications terminals for both US military and commercial customers.
Gilat said that it expects to leverage Wavestream's technology and sales reach to further enhance Spacenet Integrated Government Solutions' (SIGS) market position in the government sector.
Levinberg said, "The acquisition is part of Gilat's strategy to expand its business in the Department of Defense and other international defense markets.
Last week, Wavestream received a $19 million order from General Dynamics Satcom Technologies Inc. for high power 50W Ka-band solid state amplifiers to support US Army and Marine Corps satellite communications systems.
Wavestream will operate as a separate business unit, and its management team has agreed to stay with the company. Wavestream CEO Cliff Cooke will also stay on and report to Levinberg.
Gilat's share price rose 1.6% in premarket trading on Nasdaq today to $5.83, giving a market cap of $583 million. Its share price rose 7.1% by mid-afternoon on the TASE today to NIS 22.20.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2010
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