The ASX-listed firm has secured a deal worth up to $134 million to acquire US-based technology company Domo Tactical Communications.
SA-based electrical engineering firm Codan has entered into an agreement to acquire 100 per cent of the shares in US-based company Domo Tactical Communications (DTC), from a private equity company.
DTC, which also has office locations in the UK and Denmark, is an established provider of high bandwidth wireless communications with specialist capabilities in MIMO Mesh networks — software defined networks that leverage multiple antennas to stream data to and from devices.
The US-based company’s MIMO Mesh products provide transmission of video and other data applications to military and special forces, intelligence agencies (including the Five Eyes), border control, first responders and broadcasters.
As part of the acquisition, Codan will make an upfront payment of US$88 million ($114 million), with the possibility of an additional payment of up to US$16 million ($20.5 million) if certain earn-out targets are achieved in calendar year 2021.
The acquisition is expected to be completed by 30 April 2021, subject to a number of US and UK regulatory conditions.
Upon completion of the acquisition, DTC is expected to contribute approximately $90 million of sales, $14 million in EBITDA and $9 million profit before tax in the first full-calendar year.
“The acquisition of DTC is consistent with Codan’s well publicised strategic growth plan for our Tactical Communications business,” Codan chief executive Donald McGurk said.
“This is focused on providing total communications solutions by transitioning from a traditional voice only platform via the addition of data and video communication capabilities.
“This acquisition fills a technology gap and will be able to leverage Codan’s global distribution channels into the developing world.”
Codan’s president for tactical communications, Paul Sangster, added, “DTC is an important strategic acquisition for us and brings complementary capabilities to our existing tactical communications solutions.
“We will be able to add immediate value by integrating DTC’s and Codan’s sales and marketing teams as we open up new geographic routes to market.
“Over the long term our combined engineering capabilities will allow us to bring unique communications solutions to a diverse global customer base from military to security to broadcasting”.