Mercury Systems [MRCY] on Monday said it has agreed to acquire Avalex Technologies Corp. in a deal that complements and scales its existing product portfolio for avionics and mission systems.
Terms of the transaction, which is subject to regulatory approvals and is expected to close by year-end, were not disclosed.
Avalex, which is based in Florida, is expected to have about $40 million in sales in 2022 and adjusted operating margin of 25 percent. The company has about 100 employees.
Avalex also adds integrated smart displays and communications management systems to Mercury’s portfolio.
“Avalex’s product and technology portfolio is highly complementary to Mercury’s existing offering,” Mark Aslett, president and CEO of Mercury, said in a statement. “With deep expertise in integrated displays, digital video recorders, and communications management, their suite of innovative avionics solutions uniquely position the company to address and enable the growing demand for digitally converged solutions in the C4I and platform/mission management markets.”
Aslett also said that Avalex is growing rapidly. The company’s customers include the large aerospace and defense prime contractors and the Navy, Army and Air Force. Avalex’s products are used in a number of platforms including the V-22 Osprey tiltrotor, the HH-60 Pave Hawk helicopter, the C-130 and C-17 transport aircraft, P-3 maritime patrol aircraft, AC-130U gun ship, Norway’s Advanced Surface-to-Air Missile System canister launcher, and others.
A Mercury spokesman told Defense Daily that “Avalex is well-positioned on a wide variety of key airborne platforms that are experiencing increased funding for electronics modernization to specifically address digital convergence and combat near-peer threats in line with the National Defense Strategy.”
Mercury said it will use cash on hand and an existing credit facility to fund the purchase. It expects the acquisition to be immediately accretive to its adjusted per share earnings.