Offshore Systems International Ltd.
announced it has signed a non-binding letter of intent to
acquire a United States defense
contracting company. The acquisition is
expected to be accretive, and to approximately double OSI's revenue and
employee base. The target company, with multiple offices in the United States,
is a supplier of technology and services to the U.S. Department of Defense and
key defense prime contractors.
"We said a critical milestone for 2005 was to grow OSI through
acquisitions," said President and CEO, John Jacobson
. "We also said the U.S.
market was a key target. This new company is complementary to our Applications
business. We expect it will greatly expand our revenue opportunities, be
accretive to earnings, and give us access to one of the largest security and
defense markets in the world." Jacobson added OSI would also benefit because
the new company is a growing, profitable, services-based business with
historically lower revenue variability than OSI's navigation business.
This newest announcement closely follows the company's first U.S.
acquisition in April 2005 of Mapcon Mapping Consultants in Salt Lake City,
Utah. OSI completed a financing of CDN$19.5 million, also in April, to support
the company's rapid growth.
"We believe the market opportunity for our products is considerable,"
said Jacobson, "and we are becoming a larger company to capitalize on this
significant potential. Our goal is to become the 'go to' company in the
defense and intelligence communities for geographic technology."
With the letter of intent in place, OSI said it plans to proceed to due
diligence and the development of definitive purchase and sale agreements
immediately. The acquisition is expected to close by September 30, 2005,
subject to the satisfactory conclusion of due diligence, approval by the board
of directors of both companies, the shareholders of the target company, and