Australian tech company Codan will pay more than $100 million to buy US-based Domo Tactical Communications (DTC) from a private equity firm.
DTC is an established technology provider for high bandwidth wireless communications with specialist capabilities to provide wireless transmission of video and other data applications to predominantly first world customers, including military and special forces, intelligence agencies, border control, first responders and broadcasters.
SA-based Codan has been on a steep trajectory in the past 12 months, reporting a record profit of $64 million in August for the 2020 financial year. The result included record sales in its communications and metal detection divisions totalling $348 million.
Under the DTC deal, Codan will make an upfront payment of about $113 million with the possibility of an additional payment of up to US$16 million if certain earn-out targets are achieved in calendar year 2021.
The acquisition is on a cash-free, debt-free basis and is expected to complete by 30 April 2021, subject to US and UK regulatory conditions.
In the first full year of Codan’s ownership, DTC is expected to contribute approximately $90 million in sales and $9 million in profit before tax.
Codan chief executive Donald McGurk said the acquisition will allow Codan to provide total communications solutions with the addition of video and data to traditional voice-only platforms.
“This acquisition fills a technology gap and will be able to leverage Codan’s global distribution channels into the developing world,” McGurk said. “DTC’s products are complementary to Codan’s tactical communications solutions and serve similar markets and customers. A number of key members of our tactical communications sales team have previously worked in the MIMO Mesh and surveillance markets, and therefore have significant experience in this industry segment.”