In a series of moves designed to maintain its momentum in the military sector, systems integrator Datapath Inc. acquired the assets of M&C Systems Inc., a provider of satellite communications monitoring and control systems.

Datapath, like many others commercial companies in the satellite industry, is seeing a spike in the use of its services by the military. The company’s latest contract, announced June 13, is for $17.5 million from the U.S. Army for 14 joint Network Node Satellite Communications trailers and 38 Satellite Communication Battalion Command Post Noted trailers. The solution provides a mobile satellite telecommunications platform configurable for operation in the C-, Ka-, Ku- and X-bands.

The Duluth, Ga.-based company focused exclusively on the commercial market when it started in 1996, but military business has driven its growth throughout the past three years, said Andy Mullins, Datapath’s CEO.

Datapath, which is privately held, recorded revenue of around $89 million in 2004 and expects to surpass $200 million in revenue in 2005, Mullins said. Business from about 250 commercial clients accounts for most of Datapath’s work by volume, but about 90 percent of the company’s revenue now comes from large contracts for the U.S. military and other agencies such as the Department of Homeland Security, he added.

Mullins cited the company’s DKET 4000 Mobile communications system as an example of how the company’s business focus has shifted. Designed with commercial users such as newscasters in mind, Datapath shipped the majority of the systems to Iraq for use by U.S. military forces. The company also has about 130 employees in the region to provide services and support to the product, and 20 percent of the company’s revenue comes from services, operations and maintenance, he said.

The military market should continue to growth at its current pace for the next three to four years before returning to a “a normal rate,” Mullins told Satellite News. “They’re trying to make up for 20 years of neglect of the communications systems,” he said.

Expansion By Acquisition

With that growth rate in mind, the M&C acquisition is intended to help Datapath strengthen its position as a supplier to the military by filling in a specific need.

“We believe more and more of our customer base can’t afford product operations and maintenance costs,” Mullins said. To help address that need, the company acquired the assets of M&C, which developed an algorithm that will provide operations and maintenance personnel with a clearer picture of what is happening with the bandwidth that is being utilized by a customer to determine if it is being used productively.

What this acquisition, Datapath customers will be able to monitor a larger portion of its network traffic without having to hire or contract out for more personnel.

“The military understands they have this problem and they need to solve it,” Mullins said. He noted that the military is not necessarily looking at this solution as a replacement for its operations and maintenance staff, but are more looking to gain more productivity from its existing personnel.

Datapath expects to have all the assets and employees of M&C integrated before the end of June, Mullins said, but the acquisition was just the first step in Datapath’s plan in fulfilling its goal of becoming the first to market with a solution that offers total remote management of satellite networks.

Mullins added that the company is looking to acquire other software companies that help bolter asset configuration as well as automatic configuration detection capabilities. “We’re probably a year away from a software solution that is as robust as it needs to be,” he said.

–Jason Bates and Gregory Twachtman