Despite a drop in earnings due to the sale of its property information business MacDonald Dettwiler and Associates Ltd. (MDA) (TSX:MDA) saw a “blow-out” year in its systems business with overall revenues increasing 32.9%.
Anil Wirasekara, executive vice-president and CFO of MDA, told Business in Vancouver March 1, “We had a very strong year, on the back of a pretty strong year last year, possibly one of the best years we’ve ever had in the systems business.”
This was not normal organic growth, Wirasekara said, but rather due to a two-tiered step-up increase in the baseline for that business.
Looking ahead and with the completed $850 million sale of its products business to TPG Capital on January 4, Wirasekara stated that “we’ve closed the transaction, we have a huge amount of money, and now we have to figure out what to do with it.”
Wirasekara said MDA is looking at two options.
First, it could continue to modestly grow the existing business from its current base, which is a lower base than previously because it has sold 40% of its business.
The alternative is redeploying this money through mergers and acquisitions. Wirasekara said, “We have a pipeline and we are evaluating that pipeline. As of today we are trying to determine if there are transactions in this pipeline which are actionable in the short-term.”
MDA has a couple of months to evaluate these options and expects to announce its intentions to shareholders at the annual general meeting on May 5.