The purchase price was $42.5 million in cash, with additional consideration payable upon achievement of certain revenue targets.
NVEC is a manufacturer and marketer of innovative night vision products and combat identification systems.
It focuses on the rapid development and delivery of lightweight, affordable image intensification (I2) night vision, uncooled thermal imaging, reflective combat identification and laser-based products for U.S. and international militaries and paramilitary organizations.
NVEC maintains research, development and production facilities in Prescott Valley, Arizona, and has production and sales agreements with leading infrared and thermal imaging divisions of several major U.S. prime contractors.
NVEC is expected to generate approximately $45 to $50 million in annual revenues and approximately $0.08 to $0.10 in diluted earnings per share in its first twelve months of operation under DRS ownership.
For DRS's current fiscal year ending March 31, 2005, the business is expected to be accretive to earnings and contribute approximately $15 million to DRS's sales.
"As a supplier of small, high-quality, affordable night vision and thermal imaging soldier systems, NVEC is expected to enhance DRS's position as a market leader in uncooled infrared (IR) sensor and thermal imaging systems, as well as to support our increased access to and participation in homeland defense efforts at the federal, state and local levels," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies.
"With strong original equipment manufacturer (OEM) relationships and an extensive catalog of products and accessories, the addition of NVEC to our Surveillance & Reconnaissance Group will broaden our electro-optical product offerings and customer base and, importantly, provide strong sales distribution channels through the Government Services Administration (GSA) Schedule and other government buyers to broadly market DRS's existing uncooled thermal imaging systems and other lightweight, portable military equipment."
NVEC enjoys a high level of customer satisfaction, due to its strong sales organization and ability to provide quick-turnaround, rapid deployment of products.
Through a network of dealers and government contract vehicles, it has earned a reputation as a top supplier of night vision and related equipment to the U.S. government.
Over the past decade, NVEC has played a significant role in the development of several critical combat identification devices, which have demonstrated success in increasing survivability of U.S. troops by reducing fratricide.
NVEC's four major product lines - I2 night vision, thermal imaging, combat identification and laser aimers/illuminators - are primarily used for soldier systems, enabling day/night vision that support military Reconnaissance, Surveillance and Target Acquisition (RSTA).
The company produces image intensification products used in night vision applications, such as goggles, binoculars and monoculars; consumable combat identification equipment, such as IR beacons and thermal panels; short, medium and long-range thermal imagers for weapon sights, hand-held units, helmet and mobile or fixed surveillance units; and laser-based products for a variety of applications, including handheld IR illuminators, weapon- and helicopter-mounted IR laser aimers and handheld IR pointers that provide the ability to direct movement and control fire during hostile engagements.
Programs include Quick Fix for the next-generation combat identification family of products, Combat Commander's Tactical Aimer (GCP-2), U.S. Marine Corps Cobra Helicopter Laser Aimer (GCP-2C), Evader's Night Vision Imaging System (ENVIS), MX-2 Miniature Thermal Weapon Sight and Night Heavy Artillery Accurate Targeting (Night HEAT), among others.
DRS financed the acquisition by utilizing existing cash on hand.