CPI CEO Explains Rationale Behind ASC Signal Acquisition

Joe Caldarelli, CEO at CPI International. Photo: CPI International

[Via Satellite 09-25-2015] Communications and Power Industries (CPI) International’s corporate-level purchase of ASC Signal, a manufacturer of advanced satellite communications, radar and high-frequency antennas and controllers, from former owner Resilience Capital Partners, brings much greater antenna capabilities to CPI, which provides high tech products for the satellite industry and others.

CPI’s Malibu division supplies antennas, but focuses primarily on smaller, high-precision products for Information, Surveillance and Reconnaissance (ISR) applications with Unmanned Aerial Vehicles (UAV). Joe Caldarelli, CEO of CPI International, told Via Satellite that ASC Signal, which focuses on antennas from 2.4 meters to 14 meters, broadens the variety of products that CPI can offer to integrators.

“Our big-picture plan is to essentially be able to provide most of the components and subsystems that the system integrators buy in order to integrate a full communication, radar or electronic warfare system. That was really the motivation behind buying ASC. Antennas are a significant additional element that, in parallel to the products we already provide, most of our customers buy from an outside supplier,” he said.

Caldarelli described the acquisition as a logical add-on, since the company already produces Solid State Power Amplifiers (SSPAs), Travelling Wave Tube Amplifiers (TWTAs) and radomes. CPI will look to sell antennas to integrators of communications or radar systems in addition to these other products so customers don’t have to go to a third party.

“The reason [why] that is really important to us is we do provide a number of products that all our customers need, but we also, in some cases, provide products to competitors of ours and we buy from our competitors, so we go through great pains to maintain good clean independence between our operating units so they don’t contaminate each other. For CPI, it’s extremely important to be viewed as a good solid supplier of technology and products without pre-bias and concern over the fact that one of the other CPI divisions may be either a supplier or competitor to them,” he explained.

CPI’s business is split between defense and communications markets and Caldarelli said CPI is seeing solid demand on both sides. He added that the ASC Signal acquisition was biased more toward the communications side of the company, effectively making this CPI’s largest focus. ASC Signal builds antennas for Ultra-High-Frequency (UHF) to V-band, and S-band and L-band radar antennas for air traffic control. The company also supplies S- and C-band antennas for weather radar and high frequency and specialty antennas in a wide frequency range for a variety of applications. This year, the company sold antennas to Globecomm, Harris Corp., NATO, and an undisclosed Asian information and communications systems provider.

“With this acquisition, it makes communications the biggest market that we serve. We continue to be very interested and focused on maintaining our position in the communications industry and serving those markets well with a greater variety of products,” he said.
ASC Signal has approximately 125 employees, and will be operated as an independent division of CPI. Existing leadership and personnel, including its sales team, will stay with the company. CPI anticipates realizing approximately $50 million in annual sales, as well as positive contributions to its earnings, in the first year following the acquisition.