Harris picking up Orkand Corp. for $66 million
- By Roseanne Gerin
- Jun 08, 2004
Harris Corp. has signed a definitive agreement to acquire Orkand Corp., a privately owned provider of technical services and information technology for federal agencies, for approximately $66 million in an all-cash deal, the company said yesterday.
The purchase price is subject to post-closing adjustments.
Regulators must approve the transaction, which is expected to close before the end of Harris' fiscal year July 2. The acquisition is estimated to be immediately accretive to earnings in fiscal 2005 at around 5 cents per diluted share, the company said.
Based in Falls Church, Va., Orkand has more than 1,000 employees in 22 states. It had $80 million in revenue for the 12 months ended March. Its federal clients include the departments of Energy, Health and Human Services, Interior, Labor and State and the U.S. Postal Service
"The acquisition of Orkand Corp. expands our mission-critical services business and adds important new customers to our government communications systems division," said Howard Lance, Harris' chairman president and chief executive officer, in a prepared statement.
The acquisition comes on top announced job cuts in Harris' microwave communications and broadcast communications divisions to reduce the company's costs and improve its operating efficiency and profitability.
The company is cutting approximately 100 jobs worldwide in its microwave communications division and moving another 140 to lower cost locations. It is also consolidating the division's administration and support functions at its office in Durham, N.C., as well as the production and support for its microwave radio products at its manufacturing plant in San Antonio. Harris expects to take a pre-tax charge of around $8 million in the fourth quarter for these restructuring actions.
Harris is also eliminating 100 positions in its broadcast communications division in the United States and Europe. The company has reorganized the division into five business units: television broadcasting systems, radio broadcast systems, broadcast systems Europe, broadcast automation solutions, and network and government solutions.
Restructuring costs of around $4 million in the fourth quarter will be offset by the reversal of a previously set reserve for the consolidation of the company's European broadcast operations, Harris said.
Also during the quarter, Harris completed the sale of its telecom tools, test sets and test systems product line to Danaher Corp., a telecommunications products provider in Camarillo, Calif., for $50 million in cash, subject to post-closing adjustments. Harris signed an agreement for the sale last month.
Harris of Melbourne, Fla., offers communications technology to the federal and commercial sectors. It ranks No. 16 on Washington Technology's 2004 Top 100 List of federal government IT contractors. The company had 2003 revenue of $2.1 billion.
(Posted June 8 and corrected July 7)