Vancouver-based broadband communications solutions provider Norsat International Inc. (TSX:NII.TO) announced Wednesday it will acquire Sinclair Technologies Holdings Inc., an antenna and RF conditioning products provider, for US$19.25 million.
“I think it’s a great deal for Norsat,” said Norsat president and CEO Aimee Chan. “We think that this deal really helps Norsat in that it’s a strong financial fit, it doubles our revenue, it creates a really strong EBITDA base, and it opens up to new markets, all with minimum dilution to our shareholders.”
Aimee said the deal will open up the land mobile radio market to Norsat.
“What Norsat does is we provide communications to remote and austere regions,” she said. “So far, Norsat has been primarily focused on satellite, and Sinclair actually gives an extension into the land mobile radio market where they service a lot of customers in emergency response, law enforcement, [and] disaster recovery.”
The deal, Aimee added, will allow both companies to capitalize on each other’s markets.
“There’s a strong commercial component to [Sinclair’s] markets which helps diversify Norsat from its primary military markets,” she said. “And at the same time, [the deal will] bring them our military customers and we can leverage off their relationships with their commercial customers and launch into those areas.”
Norsat is financing the deal with US$4.75 million in cash, US$12 million in debt financing and approximately 4 million shares.