Harris to Acquire Schlumberger GCS
Harris Corp. has entered into a definitive agreement to acquire oil and gas industry service provider Schlumberger’s Global Connectivity Services (GCS) business for $347.5 million in cash after tax expenses, Harris announced Nov. 8.
The acquisition builds on Harris’ acquisition of CapRock Communications in July, as Schlumberger GCS will be combined with CapRock to form Harris CapRock Communications. The deal will see Harris inherit Schlumberger GCS’ worldwide terrestrial infrastructure and VSAT manufacturing capabilities in the United Kingdom and Singapore, as well as 400 employees, 12 teleports and a network operations center. The merged unit will target the energy, government and maritime industries.
Harris will finance the acquisition using a combination of cash on hand, commercial paper, borrowings under its committed credit facilities and long-term debt. The company said the acquisition would extend significantly its capabilities as a global mission-critical, end-to-end managed satellite communications services provider for customers operating in remote and harsh environments.
“Combining Schlumberger GCS with CapRock Communications will create an organization with unsurpassed global satellite network capabilities, broad service offerings and a large experienced service team to provide customers with superior remote and in-the-field support,” Harris President and CEO Howard Lance said in a statement.
Schlumberger GCS’ 2010 total revenue and EBITDA are expected to be $170 million and $41 million, respectively. The transaction is set to close during the third quarter of fiscal 2011.