Instrument manufacturer kicks off "growth through acquisition" strategy

In its first major US purchase, EADS North America has bought precision instrument manufacturer Racal Instruments.

The deal marks the beginning of EADS's stated policy of "growth through acquisition" and will see the US arm of EADS pay $105 million cash, plus up to $25 million for guaranteed future bookings up to mid-2005.

EADS North America chairman Ralph Crosby says the acquisition "brings on board a market leader in the integrated test business in the USA and adds materially to our critical mass as a leading global test and services company". The deal also provides access to the US Department of Defense and potentially lucrative military contracts and follows the creation this month of EADS North America Defense, which is aimed at improving the potential for US military business. The US arm of Racal Instruments will be incorporated into the new company, the rest becoming part of EADS Test and Services in the Defence and Security Systems division of EADS. Racal Instruments is expected to turn over around $84 million in 2004.

Gordon Taylor, Racal Instruments chief executive, says joining EADS "will support our move towards common automated test equipment, across a broader base of programmes". The deal will, he says, "make us better able to serve our military customers who require classified instrumentation test equipment".


Source: Flight International