NETANYA, Israel, February 8 2005. RADA Electronic Industries Ltd. announced today that it would purchase of all the assets of Vectop Limited, an Israeli company specializing in the design, development, marketing and sale of electro-optic equipment and debriefing systems.
Vectop's assets also include know-how, patents and intellectual property to produce off-the-shelf products such as cameras and video recorders, which are currently operational onboard aircraft and tanks in Israel and other countries. These products are complimentary to RADA's product suite, and also add key customers including ground and air forces to RADA's existing customer base.
The consideration to be paid by RADA to Vectop, according to the agreement is composed of two components: the sum of US$250,000 in cash and a future consideration based on performance. In addition, RADA is assuming $800,000 of Vectop's debt to be paid starting from 2006 over a two-year period, as well as other operational liabilities.
"In line with our strategy, RADA is completing its first acquisition post its turnaround. Vectop presents a unique opportunity for RADA and we believe we can harvest significant synergies in terms of our complementary product lines and access to major new customers. Our expectation is that Vectop's products will contribute US$2.5 million in revenue during this year," said CEO Adar Azancot.
"By taking advantage of our engineering staff and production facilities, we believe our existing operational infrastructure can easily absorb Vectop's products and customers. Thus, we have no need to absorb any of Vectop's operational expenses and expect Vectop's high gross profit to also have a direct positive impact on RADA's net profit, already during this year."
The transaction is still subject to the approval of Vectop's board of directors and shareholders, as well as to the formal closing of the transaction.
RADA Electronic Industries Ltd. is an Israel-based company involved in the military and commercial aerospace industries. The company specializes in avionics, ground debriefing stations (video, ACMI and maintenance) and automatic test equipment. For more information, see www.rada.com.
