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Wednesday, September 28, 2016

OSI to Acquire Defense Contracting Company

July 12, 2005

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 regulatory approval.


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