LOS ANGELES, 6 Jan. 2006. Ducommun Inc. today announced that it has acquired Miltec Corp., a privately-owned company based in Huntsville, Ala., for $50 million.
Miltec is a provider of missile and aerospace systems design, development, integration and test. Its key customers include the U. S. Army Space and Missile Defense Command, the Missile Defense Agency, the Aviation and Missile Command, the Aviation and Missile Research, Development and Engineering Center, and various prime contractors to the U.S. government.
Don Miller, president and principal shareholder of Miltec, and his management team will remain with the company. Miltec's sales for the 12-month period ended September 30, 2005 were approximately $42 million.
The purchase price includes assumed indebtedness plus contingent payments not to exceed $3 million. Numbers are subject to adjustment based on a closing balance sheet and for certain tax refunds.
Joseph C. Berenato, chairman and CEO of Ducommun, stated, "The acquisition of Miltec is consistent with our stated strategy of moving Ducommun into growing markets with increasing engineering content. Miltec has a strong record of profitable growth which we expect to continue into the foreseeable future. Miltec is benefiting substantially from the trend for the U.S. government to outsource its technical services requirements. Miltec also possesses an impressive suite of leading-edge technologies, particularly in missiles, sensors and data fusion, which we hope to exploit."
Founded in 1849, Ducommun Inc. provides engineering and manufacturing services for the aerospace and defense industry. Bear, Stearns & Co., Inc. advised Ducommun on this transaction. For more information, see www.ducommun.com.
"The acquisition of Miltec provides us with a platform business with leading-edge technology in a large and growing market with substantial design engineering capability. Our goal is to expand upon Miltec's existing strengths by exploiting other applications for its broad-based technologies, and by expanding Miltec's presence in its marketplace with the manufacturing capabilities of Ducommun's existing businesses. We believe that the acquisition of Miltec provides us with the potential to transform the existing manufacturing-oriented Ducommun into a higher growth, engineering technology business with significant manufacturing capability which can grow faster than either business functioning independently," he said.
Mr. Berenato concluded, "As a result of the Base Realignment and Closure (BRAC) Commission, the U.S. government has embarked on a significant realignment of its command structure. The Missile Defense Agency, the Space and Missile Command, and the U.S. Army Material Command are all in the process of relocating significant personnel to, and increasing engineering services spending in, the Huntsville, Ala. area. We expect the realignment rising from the BRAC Commission to have a significant positive effect on Miltec's business over the next several years."
Miltec operates through three divisions. The Miltec Missile and Space Co. division specializes in missile engineering and aerospace technologies with extensive knowledge, experience and capability in missile design, development, integration and test. The Miltec Systems Co. division provides engineering, technical and program management services. The Miltec Military Research and Technology division provides high technology systems engineering and analysis with a focus on sensors, system simulation, engineering and integration. For more information, see www.mil-tec.com.
