Norsat International Inc., broadband communications solutions provider, announced today that it has entered into a definitive agreement with Sinclair Technologies Holdings Inc. to acquire all of its shares. Norsat will pay $19.25 million, financing the transaction with $4.75 million in cash, $12.0 million in debt financing from its principal banker, and 4,028,932 common shares issued from treasury. The majority of the purchase price will be paid upfront; the remaining portion will be held in escrow and earned out over a period of two years. The acquisition is projected to close later this month.
Sinclair is a leading provider of antenna and RF conditioning products, systems and coverage solutions for public safety, defense and private wireless networks. Sinclair offers more than 2,000 different products including Base Station Antennas, Mobile/Transit Antennas, Covert Antennas, Filters, Receiver Multicouplers, and accessories that are used extensively in various public and private industries.
For the fiscal year ending September 30, 2010, Sinclair had revenues of CAD$20.1 million and EBITDA1 of CAD$3.1 million. The positive results show another year of continued growth, adding to the company’s history of consecutive years of increased revenue and earnings, even during the major economic recession. In the last three years the compound annual growth rate (CAGR) for revenues was 13% and the CAGR for EBITDA was 26%.
Dr. Amiee Chan, President and CEO of Norsat, stated, “This is an exciting day for Norsat shareholders as this acquisition will bolster our revenue base and is expected to be immediately accretive to earnings. Sinclair has experienced rapid growth in the past several years and is expected to continue to grow, which will act as a catalyst for upside potential to this transaction. The acquisition of Sinclair is a perfect complement to our core businesses and keeps to the focal point of our mission of becoming a premier provider of broadband communications solutions for remote and austere regions. In addition, Sinclair will help diversify our markets into the commercial space and into the municipal government level. Sinclair products are being used all over the world and many are located in the harshest of environments. Many of Sinclair’s customers, like Norsat’s, have become accustomed to relying on the delivery of superior products that can withstand severe elements along with offering up the latest technologies and being able at times to provide customized solutions. In addition, we believe that combining forces with Sinclair will create opportunities such as to cross sell our customer base, resell Sinclair’s products using our Microwave division, potentially have target design antennas for our maritime and wireless divisions, and expose Sinclair’s products to our relationships in Europe and the military markets.”
Mr. Calven S. Iwata, President and CEO of Sinclair, added, “We are pleased in joining forces with Norsat which provides us with increased market penetration, especially in the military arena, as well as other synergistic capabilities like combined R&D efforts in other wireless products. This transaction is a good cultural fit as we’ll retain the Sinclair brand, which is well known in our industry. In addition, being part of the Norsat family will enable us to offer broader service and product offerings to our customers and allows us a strong internal continuity amongst our personnel. Once this transaction is closed, I am looking forward to maintaining the leadership role at Sinclair and contributing towards a smooth transition into Norsat. We are delighted to be part of the Norsat team and believe the combination of our companies will enhance the opportunities for long-term growth.”