Mercury deal continues consolidation trend in electronic warfare

In another sign of the growing importance of electronic warfare and related capabilities, Mercury Systems is adding to its portfolio with the $40.5 million acquisition of Delta Microwave.

When it closes, it’ll be Mercury’s fourth acquisition in 18 months after prior buys of Creative Electronic Systems, Microsemi Corp. and Lewis Innovative Technologies.

Mercury is building a variety of capabilities around communications, electronics, microwave technologies and other areas.

They aren’t the only buyer in this space. Arlington Capital Partners built a platform in Polaris Alpha to bring together companies in the electromagnetic spectrum, cyber and electronic warfare areas.

Raytheon also is among those working on ways to improve training and integrate these emerging technologies and capabilities into the battlefield.

With Delta Microwave, Mercury is buying a designer and manufacturer of radio frequency, microwave and millimeter wave sub-assemblies and components for the military and space markets.

“These new capabilities add scale and breadth to Mercury’s existing RF, microwave and millimeter wave portfolio, expand our addressable market into satellite communications, data links and space launch – markets that are well-aligned with Mercury’s existing market focus – and deepen our penetration into our core radar, electronic warfare, and precision-guided munitions markets,” said Mercury President and CEO Mark Aslett in a statement.

Delta also works on on several long-term weapons programs such as the F-35 fighter jet, he said.

Delta posted $12.8 million in 2016 revenue and said it was on a rapid growth trajectory.

With the announcement of the Delta deal, Mercury’s stock rose 1.6 percent to $37.79 a share in mid-afternoon trade Tuesday. Mercury recorded $270.2 million in revenue for its last fiscal year ended June 30 to show a 15.1-percent year-to-year increase.