Gilat Satellite Networks has signed a definitive agreement to acquire DataPath to boost its presence in the U.S. defense market, the satellite ground tech company said March 9. Gilat said the acquisition will increase its annual revenues by $50 million.

Gilat, based in Israel, supplies technology to the satellite industry including VSAT (very small aperture terminal) network platforms that support use cases like 

cellular backhaul, in-flight connectivity, and maritime connectivity. According to industry analyst NSR, Gilat was the No. 1 vendor in modem shipments for cellular backhaul, with a 40% market share. Gilat reported $240 million in revenue in 2022, up 12% compared to 2021.

The DataPath acquisition will help Gilat increase its presence in the defense market, Gilat said.  DataPath is a U.S.-based systems integrator based in Duluth, Georgia, with a strong focus on the Department of Defense and U.S. government sectors offering systems engineering, software development, and mechanical engineering. It supplies portable satellite terminals to the U.S. military.

DataPath is on three contract vehicles — the U.S. Army’s Global Tactical Advanced Communication Systems II (GTACS II); RS3, which supports command, control, communications, computers, intelligence, surveillance and reconnaissance systems; and the U.S. Navy’s SeaPort Next Generation contract.

“The acquisition is a major milestone in Gilat’s growth strategy to expand its business into the U.S. DoD and government sectors as well as into other international governments and Defense markets. We see great synergy between the companies and are looking forward to working with DataPath’s leadership in support of its customers,” Gilat CEO Adi Sfadia said in a statement.

Both boards of directors have approved the transaction, and it is expected to close in the third quarter of this year. The deal is subject to regulatory approval, including clearance from the Committee on Foreign Investment in the United States (CFIUS).

“We are proud of our DataPath team to get the company positioned to join Gilat and expect that, together with Gilat’s strong position in the satcom market and its vast international reach, DataPath will be well positioned to continue its profitable growth and its continual commitment for integrated solutions built with best of breed components,” said David McDonald, DataPath CEO.

Gilat’s stock jumped more than 5% with the news of the acquisition.

In 2020, Gilat had a deal to be acquired by U.S. satellite tech company Comtech Telecommunications, but the deal fell apart during the pandemic, with Comtech agreeing to pay Gilat $70 million. Comtech alleged at the time that Gilat’s business had suffered due to the pandemic’s impact on the aviation industry.

Gilat’s business in the aviation segment has bounced back post-COVID, and the company reported a record year in 2022, with tens of millions of dollars for its ground segment platform, modems, and transceiver product line for in-flight connectivity.

This article was first published by Defense Daily sister publication Via Satellite.