Sweden’s defense and security company Saab AB recently said it has agreed to acquire United States-based sensor firm Sensis Corp., in a deal that combines complementary capabilities in air traffic management (ATM) and radar systems and kicks-off Saab’s plans for buying U.S. companies in the defense and security space.
Saab will pay $155 million in cash for New York-based Sensis, plus up to $40 million more by 2014 in earn out provisions. The deal is expected to close in the third quarter of 2011 pending regulatory approvals.
Saab said that Sensis gives it a customer base and product portfolio in the United States with the Federal Aviation Administration for ATM systems and boosts its capabilities and presence with these systems internationally. Currently, Saab has air transportation system, including ATM, capabilities that it offers to customers in Sweden, as well as Europe and Australia.
About 70 percent of Sensis’ business is in the ATM area and the rest in radar systems, mainly in the United States but it does have customers in 35 countries and its customers include 54 of the world’s 100 largest airports.
Sensis is expected to have $130 million in sales for the fiscal year that ends on June 30. Combined with Sensis, Saab expects its U.S.-based sales to be close to $500 million this year, Dan-Ake Enstedt, president of Saab North America, told Defense Daily.
“This is an extremely important milestone” for Saab’s growth strategy in the U.S., Enstedt said of the acquisition. It’s the first deal Saab has done since it acquired Sweden-based Ericsson’s [ERIC] microwave division in 2006.
On the defense and security side, Sensis develops and manufactures radar systems and related products, missile defense simulation products, data processing and data mining and analysis. The two companies already do business together as Sensis licenses for sale in the U.S. and foreign military customers Saab’s Sea GIRAFFE multi-role radar. The companies are also partners on the Austal/General Dynamics [GD] team for the Navy’s Littoral Combat Ship.
Enstedt said that Sensis gives Saab a platform to help expand the reach of its current solutions into the United States as well as to invest research and development resources to better meet customer needs here.
Saab AB is pursuing a three-pronged growth strategy that includes organic growth in the United States and globally, partnering with U.S. firms, and acquisitions. Enstedt said that Saab will likely focus on the integration of Sensis this year before it buys additional companies in the United States.
Sensis, which will be renamed Saab Sensis, will become part of Saab North America. Sensis has 600 employees.
Moellis & Co. served as Sensis’ financial adviser on the deal.