Odetics Buys Rockwell Transportation Technology Unit

ANAHEIM — Boosting the chances of spinning off another division, Odetics Inc. said Monday that it has bought a unit of Rockwell International Corp. that makes computer systems for monitoring traffic.

Terms of the transaction weren’t disclosed.

Odetics, which makes a variety of high-technology products, said it will merge the Rockwell unit into its Gyyr closed-circuit television division. Odetics will retain the 45 Rockwell employees in Anaheim and Troy, Mich.

With the acquisition, Odetics gets three Rockwell contracts, including the National Intelligent Transportation Systems (ITS) Architecture contract awarded by the Department of Transportation.

Transportation authorities use such traffic-monitoring systems to reroute vehicles and minimize backups.

The ITS contract is to study the feasibility of deploying traffic-monitoring systems nationwide. The department estimates it would cost as much as $10 billion to install such systems in the 50 largest U.S. cities.

“It’s going to give us a lot of credibility in that market,” said Joel Slutzky, chairman of Odetics.

One of the other Rockwell contracts, he said, is to install a monitoring system in Michigan.

Seal Beach-based Rockwell has been transforming itself from a military and aerospace company to an electronics concern.

The purchase makes Gyyr the next division that Odetics is likely to spin off. The company has spun off its ATL Products subsidiary, selling about 20% to the public and giving shareholders the rest.

“We like that concept and consider ourselves an incubator,” Slutzky said. “Gyyr, depending on its results, is the most mature unit to go out next. We expect some real good product announcements over the next six months that should put it in high growth.”

Solid revenue and earnings growth, he said, are needed before the unit can go public. “It won’t take off instantly,” he said. “It will take time to catch on.”

Odetics, based in Anaheim, also makes video surveillance and monitoring equipment under the Gyyr name. Slutzky said Gyyr, with 96 employees, accounted for about $40 million of the company’s $141 million in revenue for its fiscal year, which ended March 31.

Rockwell wouldn’t disclose the revenue of its transportation unit.

Last year, Rockwell took charges totaling $77 million, or 35 cents a share, related to its decision to sell its intelligent-transportation and truck communications businesses.

Rockwell also has said that it is spinning off to shareholders its auto-accessories businesses, which had 1996 revenue of about $3.1 billion. It sold its defense unit to Boeing Co. to concentrate on its semiconductor and factory-automation businesses.

Bloomberg News contributed to this report.