By Calvin Biesecker

Britain’s Chemring Group PLC yesterday said it has greed to acquire Los Angeles-based Hi-Shear Technology Corp. [HSR] for $132 million in cash, a deal which complements its capabilities in energetic solutions and extends its footprint in the United States.

Chemring, which already supplies a range of linear explosives using in stage separation, said it would be able to grow Hi-Shear’s U.S. position in energetics for space and satellite separation by accessing European satellite manufacturers. The company also said it would be able to provide Hi-Shear its technologies to offer U.S. customers.

“The acquisition of Hi-Shear considerably extends Chemring’s capabilities as an advanced engineering business, and creates a strong platform for growth in the space and missile defense markets,” David Price, Chemring’s CEO, said in a statement. “I am confident that its unique capabilities in pyrotechnics, mechanical and electronic engineering combined with our existing strengths in energetic materials and subsystems will create a world leader in these markets.”

Hi-Shear had sales of $25.9 million and pre-tax profits, excluding non-recurring items, of $12 million for the year ended May 31. Chemring expects the deal to be accretive in its first full fiscal year once the deal is completed, which is expected in the fourth quarter of 2009.

The pending purchase of Hi-Shear follows two other deals Chemring made last year for U.S. companies. The U.K. firm spent $30 million last fall for the mine detection company NIITEK and earlier in 2008 acquired the Titan Dynamics business from Allied Defense Group [ADG], enhancing its military training pyrotechnics business (Defense Daily, Oct. 10 and March 20, 2008).

Hi-Shear’s products are on the PAC-3 anti-ballistic missile system, aircraft ejection seats, unmanned systems, and space and satellite systems. The company also supplies a remote acoustic explosive ordnance (EOD) disposal initiator, which complements Chemring’s existing encoded radio-frequency initiators for EOD applications.

Chemring said the cash for the acquisition is coming from a new loan facility with Lloyds Banking Group. Lazard served as Hi-Shear’s financial adviser.