Acquisition of Redflex Communications Systems Pty Ltd
13 December 2006
RCS is an experienced turnkey systems supplier, integrator and maintainer of communications, command and control systems for defence and civil customers around the world.
RCS applies state-of-the-art digital switching and communications technologies to achieve fast, efficient and simple to use communications solutions through its world leading Switchplus® based products. RCS systems are used in:
Initially entering the Australian market in 1990 with its ALARMON product, RCS now provides a complete and integrated hardware and software solution to clients both in Australia and overseas - including project management, systems management, customer liaison, functional specification, design and development of hardware and software, installation, maintenance and technical support services.
Since inception, RCS' defence customers have included; the Royal Australian Air Force, the Royal Australian Navy, the US Air Force, he Bahrain Defence Force, the Croatian Air Force, Lockheed Martin, Northrop Grumman, the Mexican Department of Defence, BAE Systems Australia and the Taiwan Department of Defence.
RCS has also provided touch-screen Air Traffic Control - Voice Communications Systems to various airports around the world, including Dubai International, Fiji, Mauritis and Bahrain. The RCS Switchplus® based systems are also currently in use by the Australian Civil Aviation Authority, New South Wales State Rail Authority and others.
RCS has recently won a number of significant new contracts, including in the USA, to a NATO country, with the Royal Australian Navy, in Denmark for the police force, and in Turkey for a defence project.
Allied Technologies' Chief Executive Officer Michael Addison said "RCS acquisition is in keeping with Allied's strategic focus to become a leading ASX-listed supplier of integrated ICT products and services to the defence, security and intelligence sectors, both locally and globally.
"We believe that RCS' recognised status as a trusted defence supplier in the USA and other international markets will provide us with a capability to fast-track the group's offshore sales aspirations."
"In addition, local product recognition amongst blue-chip customers such as the Department of Defence and other State and Federal Government Departments will serve to build on the already established position that Allied Technologies commands in the local market."
The acquisition purchase consideration, which is payable in cash, is based on an adjusted multiple of RCS earning over the 205, 2006 and 2007 financial years. An initial amount of $4 million was paid to the vendor on completion of the acquisition. The balance of the purchase consideration is based on RCS' adjusted earnings to 30 June 2007 and is payable by 14 September 2007.
The acquisition is expected to be earnings per share accretive from acquisition.
Allied Technologies Group Limited (ASX:ATZ) is a leading ASX-listed provider of integrated information and communications technology based products and services to the defence, security and intelligence sectos, specialising in the design, installation, integration and maintenance of voice and data networks and services.
Key operating companies in th Allied Technology Group include ServicePoint and LongReach.
ServicePoint is a specialist provider of highly secure and non-secure visual collaboration systems and solutions and related management services - principally to the Department of Defence and to Federal and State Government departments across Australia - particularly in addressing their secure Command and Control visual communicatons requirements.
ServicePoint is also engaged in the maintenance, performance and security management of the cable and related hardware and software infrastructure integral to the Department of Defence's voice network.
LongReach designs and sells network switches and multimedia gateways to domestic and international customers, including telecommunications carriers, defence organisations, and the governments and enterprise sectors.
Allied Technologies also holds a significant investment in Startronics - one of the largest diversified electronic manufacturing and repair business in Australia.
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