Gilat CEO Looking For More Acquisitions to Enhance Managed Network Services

[Satellite News 03-23-11] Gilat Satellite Networks’ acquisitions of Raysat Antenna Systems and Wavestream were key elements of the company’s strategy to beef up its overall capabilities and focus on defense and military markets. With these acquisitions now complete, the company is hoping to bring a number of new products to the market.
    Gilat CEO Amiram Levinberg spoke with Satellite News about the company’s aggressive moves into the military and defense markets, possible future acquisitions, as well as new technologies the company hopes to rollout during the next year.

Satellite News: What was your strategy behind your acquisitions of Raysat and Wavestream last year?

Levinberg: At the end of 2009, we announced a strategy based on two pillars. The first pillar was strengthening our leadership in our existing markets, and the second pillar was entry into the defense and homeland security market, both in the United States and internationally.
    For the second pillar, we decided that we would look to grow mainly by acquisitions and this is what we implemented in 2010. Both Wavestream and Raysat are strong players in the defense market, each with unique capabilities with many of their opportunities in the defense business. These acquisitions also gave us an entrance into other growth markets such as homeland security and satellite-on-the-move applications. As a result, we have become a much more diversified company and things have changed significantly for us this past year.

Satellite News: Why did you feel the need to diversify?

Levinberg:  The U.S. defense market is a very big market for satellite communications, estimated at about $4 billion. Since we had almost no activity in this sector it was a natural growth candidate for us. However, outside of the United States, military and homeland security ‘discovered’ satellite only fairly recently. This has since become a growing market, one that is a good fit for Gilat, which has a significant international presence. 
    We have added to our portfolio several technologies from the acquisitions of Wavestream and Raysat Antenna Systems, which we would like to introduce to system integrators supplying to the Pentagon. We also announced at the end of 2009 that we were establishing a dedicated research and development group to develop derivatives of our technologies aimed toward the military market. At SATELLITE 2011, we introduced a new military VSAT to support small dish solutions that are usually used in communications-on-the-move applications. It is based on innovative spread-spectrum technology that we think will give us an advantage for mobile applications.

Satellite News: Are you still on the lookout for more acquisitions?

Levinberg: We are not looking to acquire companies that are the size of Wavestream at the moment, but we are strongly committed to our defense business. We will be on the lookout this year for opportunities for our commercial business, such as Spacenet’s services. We will be looking to improve in areas such as managed network services and we might look for an expansion of our capabilities in that area through an acquisition. There are also additional complementary technologies, which we could look at in order to make our portfolio even richer.

Satellite News: What capabilities would you like to add?

Levinberg: When it comes to Spacenet, we would want to expand our managed network capabilities. We introduced a network appliance called PrysmPro in the United States. PrysmPro is a technology that enables a service provider to offer a broader array of services and not just satellite communications and is particularly suited for situations where there is more than one connection to the Wide Area Network. For example, situations where you have DSL and satellite, or 3G and satellite, can be managed from a single device providing high-availability of service at a more attractive price to the user.
    We want to expand PrysmPro’s offerings and capabilities within the U.S. domestic market as well as introduce it into international markets. Spacenet plans to enhance its offerings in the area of managed network services organically. We will also be looking for additional capabilities that Spacenet currently does not have, whereby a small-scale acquisition can strengthen and complement our offering. Since we find these are common issues with other service providers in the international markets as well, we will be looking to expand our sales outside the United States.

Satellite News:  Is Gilat planning to launch any new services this year?

Levinberg: Besides introducing PrysmPro to international markets and expanding our defense portfolio, we will introduce a new product later this year, which is aimed at cellular and high-end services. It is a product optimized for high-bandwidth services.
   We also will have a new line of Wavestream products aimed to replace TWTs for the big broadcasters. It is a very interesting market because this market has been dominated by TWT to this point. Replacing TWT with solid0-state is a very interesting move and we foresee a very solid market there. We have had our first sales in this segment, and we hope to expand our success in 2011. We also plan to introduce new phased array antennas from Raysat Antenna Systems that are electronically steered. This technology is usually optimized for airborne communications, but it may be used for other applications as well. We will also introduce a new range of antennas with higher performance.