Singapore Technologies Engineering Acquires iDirect For $165 Million
Communication network equipment provider iDirect Technologies Inc. agreed to be acquired by Singapore Technologies Engineering Ltd. for $165 million in cash.
“This business acquisition will help us in many different ways like moving into Asia more aggressively and expanding our business with the Department of Defense,” John Kealey, iDirect CEO told Satellite News. “They also have other resources, like financial backing and engineering, that we can leverage to help iDirect build itself into a much larger company.”
Under the terms of the deal, ST Engineering’s U.S. holding company, Vision Technologies Electronics (VTEE), will acquire 11-year-old iDirect. This acquisition will infuse iDirect with cash and already solidified business relationships within certain markets, enabling Kealey to expand iDirect’s line of satellite-enabled network equipment.
According to Kealey, Herndon, Va.-based iDirect will operate as a wholly owned subsidiary under its existing management team and name. “It is business as usual for us with the change coming in the fact that we will have a greater success rate of increasing our market share within some of the strongest market segments out there,” he said.
Today, iDirect’s broadband modem business is among the strongest in the industry. According to company officials, roughly 30 percent of its revenue comes from its military business. In 2004, iDirect brought in more than $50 million in revenue and is on track to post $80 million in 2005, said Kealey, who was named Satellite Executive of the Year 2004 by Via Satellite magazine, a sister publication of Satellite News. The annual award honors the satellite industry executive that has made significant contributions on the global satellite communications business landscape.
For Singapore Technologies Engineering, iDirect equipment further strengthens its brand within the broadband market place, according to company officials. “VTEE actually has a significant presence with the [Department of Defense], as does the iDirect brand. This acquisition will help us provide a much stronger solution to our military customer and further expand our U.S. business,” VTEE CEO John Coburn told Satellite News. “We will also be able to do more research and development. iDirect is a very strong engineering company and this will make us that much more stronger for our customers.”
Being able to provide a strong and more complete offering to a certain customer base is gaining more importance in today’s competitive environment. The acquisition of iDirect extends ST Engineering’ satellite communications product offering with the integration of iDirect’s network equipment into ST Engineering already existing satellite communications front-end transceiver, marketed under its Agilis brand.
iDirect also manufactures two-way Internet protocol-based broadband satellite networking solutions and has customers in the telecommunications, oil and gas, construction and marine industries, as well as government and military agencies. After the acquisition is complete, ST Engineering will have a more comprehensive equipment offering for its clients, avoiding the need for multiple contracting, officials said.
An integrated engineering group providing solutions and services in the aerospace, electronics, land and marine sectors, ST Engineering reported revenues of $2.9 billion in fiscal year 2004. The global conglomerate has more than 100 subsidiaries and associated companies in 15 countries throughout the world.
The transaction is subject to regulatory approvals and other closing conditions, including the approval of a majority of iDirect’s stockholders. Both Kealey and Coburn said that they expect the final phase of this deal to go smoothly, with everything completed before the holiday season but no later than year’s end.