Management Group Intends to Purchase M/A-COM Division
Five former and current M/A-COM Government Systems managers have signed a letter of intent to acquire the San Diego-based division from its corporate parent for about $70 million, the companies said Monday.
The resulting company, which would have about $48 million in annual sales and 675 employees in San Diego, would be renamed Linkabit. The division manufactures digital communications systems for satellite communications.
The division did not fit in with Boston-based M/A-COM’s plan to “focus its resources and efforts” on manufacturing components and subsystems for missiles, electronic warfare and radar systems, according to a company spokesman.
Linkabit was the division’s original name when San Diego businessman Irwin Jacobs founded the company in 1969. Boston-based M/A-COM acquired Linkabit in 1980 for $40 million, then subsequently sold Linkabit’s San Diego-based VideoCipher division, which manufactures television signal encoders and decoders. M/A-COM also sold a communications division.
Create an ESOP
The former and current Government Systems managers hope to complete a deal to transfer a majority interest in the newly formed company to a new employee stock ownership plan. The management group, led by Thomas S. Seay, a former Government Systems general manager, plans to arrange financing through Drexel Burnham Lambert, a New York-based investment banking firm.
According to the letter of agreement, a percentage of the newly formed company would be held by financial institutions that agree to make the loans needed to finance the deal. However, company spokeswoman Michelle Mueller declined to discuss the ownership breakdown because the proposed sale involves securities offerings that have not yet been registered with the federal Securities and Exchange Commission.
In addition to Seay, the “Founders’ Group” includes Government Systems General Manager Michael A. Wintermute, Senior Vice President Hussein S. El-Ghoroury, corporate attorney Edward D. Schmidt and Laurin G. Pause, an executive with the company.
In a related announcement on Monday, M/A-COM said that it had entered a definitive agreement to acquire Waltham, Mass.-based Adams-Russell Inc. for $15.50 a share. Adams-Russell manufactures microwave and low-frequency products for the defense electronics market.
