M&A

Mercury to pay $310M for mission management tech company

Mercury Systems has agreed to acquire Physical Optics Corp. for $310 million in cash to gain access to more platform and mission management content technologies for use in defense applications.

In a release Monday, Mercury touts POC’s avionics and mission subsystems products as complementary to what Mercury already provides for certain defense platforms. The deal helps position the company for opportunities to address digital convergence requirements of the military.

POC was founded in 1985 and employees nearly 350 people that work on common use products such as data transfer systems, flight data recorders, mission computers, high-definition data and video recorders and advanced encryption devices.

Mercury views those areas as experiencing increased funding for electronics modernization on both airborne and naval platforms.

POC expects its revenue this year to reach $120 million and the transaction values that company at approximately 13 times expected next 12 months EBITDA (earnings before interest, taxes, depreciation and amortization).

Both companies expect to close the transaction by Jan. 1. Investment bank KippsDeSanto & Co. advised POC.

Prior to this deal for POC, Mercury’s most recent acquisition closed in September 2019 for display technology maker American Panel Corp. The calendar year 2019 saw Mercury close four acquisitions.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also connect with him on LinkedIn.

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