New York-based L-3 Communications Holdings Inc. (LLL), in recent times, has been consolidating its operations to enhance its competitiveness and operational efficiency.
Recently, L-3 Communications acquired the assets of MITEQ, Inc., a manufacturer of specialized RF microwave products and SATCOM components for space and military applications, for $41 million. The acquired business will be combined with the company’s Narda Microwave-East business and will be named as L-3 Narda-Miteq. The new entity will cater to the U.S. military and commercial customers.
With this acquisition, L-3 Communications intends to strengthen its Communication Systems segment as a gradual shift in defense spending is witnessed at the macro level. Focus appears to have shifted on high-tech intelligence and communications equipment, next-generation technologies, cyber security and intelligence, surveillance and reconnaissance (“ISR”) technologies. The company intends to capitalize on the growing demand through the acquisition of MITEQ. It is expected that this acquisition will boost the company’s top line and add roughly $60 million to revenues for the year ending Dec 31, 2015.
L-3 Communications thus continues to supplement, strengthen and enhance its existing businesses through acquisitions that add innovative technologies and products, provide access to select customers, programs and contracts, and ensure attractive returns on investment.
Earlier, in the first quarter of 2014, L-3 Communications had acquired Data Tactics, a data analytics and cloud computing solutions provider. The acquisition is expected to realize growth opportunities for the ISR business and offer access to next-generation technology, which would help to secure defense contracts.
Apart from L-3 Communications, other defense players like Textron Inc. (TXT), Raytheon Company (RTN) and Huntington Ingalls Industries, Inc. (HII) have also resorted to bolt-on acquisitions to minimize gaps in product offerings and remain competitive.
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