L3 Technologies [LLL] completed its $117.5 million acquisition of the explosive trace detection business of Implant Sciences, adding a new product line to its portfolio of security detection technologies.
The trace detection business is being integrated into L3’s Security & Detection Systems division that is part of the company’s Electronic Systems business segment.
Implant’s products are used by the Transportation Security Administration, airport security agencies in Europe, transportation security agencies in China and elsewhere, and for critical infrastructure protection. Last September TSA ordered for 1,353 QSA-B220 desktop explosive trace detectors (ETD) from Implant with options to increase the order quantity to 3,426. The potential value of the award, including all options, is $71.3 million.
“We are pleased to complete the acquisition of this business, which bolsters L3’s leadership in efficient, scalable security solutions and greatly enhances our capabilities in the global aviation security and national security markets,” says Michael Strianese, L3’s chairman and CEO. “Adding Implant’s ETD business complements our market-leading checkpoint management systems and security efficiency software through our recent acquisition of MacDonald Humfrey. Together, these businesses provide L3 with a full suite of solutions and position us to capitalize on the significant opportunities in the growing security and detection market.”
In December L3 told investors that the then pending acquisition of Implant and a recent deal for MacDonald Humfrey, a manufacturer of automated tray handling systems for security checkpoints, would help grow sales in its Security & Detection Systems business from $370 million in 2016 to more than $500 million in 2017.
Implant’s sales in its quarter that ended Sept. 30, 2016 were $8.1 million, down 44 percent from $14.4 million in the year ago quarter. The company posted a net loss of $27.2 million versus a net loss of $911,000 a year ago.
Sales were down due to a 54 percent drop in business for the QS-B220 desktop ETD systems to $5.8 million. Desktop ETD business was down due to a decline in shipments to European airports and lower prices due to competitive market conditions in Europe and Asia.
Implant also offers a handheld ETD, the QS-H150. Sales of this system increased 44 percent in the quarter to $990,000 from $687,000 a year ago. Sales of spare parts increased 174 percent to $1.1 million from $646,000 a year ago.
L3’s primary products in the aviation security space, in addition to its new ETD line, include body scanners, explosive detection systems (EDS) to screen checked bags, motorized tray management systems through the MacDonald deal, and a new EDS-like system that the company is introducing for screening carry-on bags at checkpoints. The company also offers metal detectors for people screening and X-Ray systems for screening air cargo.
Tom Ripp, president of L3 Security & Detection Systems, says that Implant’s management team is onboard and “brings both strong domain expertise couple with deep technical capabilities focused on innovative trace solutions.”