L-3 Communications acquires Wescam Inc.

L-3 Communications Holdings Inc. of New York announced Sept. 18 that it will buy Wescam Inc., a Canadian provider of wireless visual information systems for the military, for about $118 million.

The deal should close by the end of 2002. It should bring about $100 million in sales and between 2 cents and 3 cents of earnings per share to the firm in 2003, L-3 officials said.

L-3 supplies a wide variety of intelligence, communications and wireless products to the Department of Defense, U.S. intelligence agencies, aerospace companies and commercial telecommunications and wireless customers.

"Through this transaction, the company will secure a much larger presence in the United States, as well as greater support and access to the largest defense market in the world," said Mark Chamberlain, president and chief executive officer of Wescam.

Wescam of Burlington, Ontario, designs and manufactures systems for defense applications that capture images from mobile platforms and transmits them in real time to tactical command centers for interpretation and for commercial broadcast applications to production facilities.

"One of L-3's key strategic acquisition goals was to add a strong electro-optic company that has a recognized technical edge over the competition, and Wescam does that for us," said Frank Lanza, chairman and chief executive officer of L-3 Communications.

Wescam's customers include the U.S. departments of Defense, Transportation, Navy, Army, Air Force, Marines and Coast Guard, and international military organizations such as the Canadian Navy and the German Border Guard.

Wescam also serves prime contractors and original equipment manufacturers, including Lockheed Martin, Northrop Grumman, Thales and General Dynamics. The company also provides products to law enforcement agencies and police departments in the United States and internationally.

"As the U.S. military and various international governments concentrate on bolstering their intelligence, surveillance, reconnaissance and communications capabilities to deal with terrorist threats, there are numerous opportunities to build Wescam's business base," Lanza said.

Lehman Brothers Inc. of New York was a financial adviser to L-3 Communications on the acquisition. Quarterdeck Investment Partners LLC of Los Angeles was a financial adviser to Wescam.