Purchases are HEICO’s 4th and 5th
acquisitions in this fiscal year to date
HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) today announced that
its Electronic Technologies Group acquired Intelligent Devices,
Inc. (“ID”) and Transformational Security, LLC (“TS”) from their
founder-owner-managers for cash at closing, plus potential
additional cash consideration to be paid if certain post-closing
earnings levels are attained. Further financial details were not
disclosed.
HEICO stated that it expects the acquisitions to be accretive to
its earnings within the first twelve months after closing. The
acquisitions are HEICO's fourth and fifth acquisitions in its
current fiscal year, as well as being HEICO's second and third
acquisitions since the COVID-19 pandemic's start.
ID, which was founded in 1995 by Edmund Pirali, and TS, which
was founded in 2004 by Jon Whittingham, are leading security
technology companies that design, develop, manufacture and support
state-of-the-art detection and monitoring systems used to protect
critical spaces from exploitation via wireless transmissions,
technical surveillance, and listening devices. Their products
include hardware and software which detect, identify and analyze an
array of threats posed in cellular communication security,
information security and radio frequency security.
ID and TS offer these solutions, commonly known as Technical
Surveillance Countermeasures, or TSCM, to well-funded markets and
applications, including intelligence, military, law enforcement,
government agencies and the private sector. HEICO believes that
emerging technologies and continued espionage desires by many
governments, companies and people render this an important and
growing market.
Although ID and TS are separate companies, Mr. Pirali and Mr.
Whittingham partnered their companies in 2010 when they became
roughly equal owners in each other’s company in order to share
certain resources and jointly develop critical technologies. The
two companies, which together employ approximately 50 people, are
co-located in state-of-the-art facilities in Columbia, MD and share
extensive resources.
Mr. Whittingham will serve as the firms’ President and Mr.
Pirali will serve as their Vice President. HEICO stated that it
does not expect any staff turnover to result from the acquisition
and stated that the businesses shall continue to operate from their
existing location. HEICO expects that the two companies will be
fully combined within a reasonable time after the closing, though
no timetable has been set, and HEICO emphasized that it does not
anticipate any changes to staff, location, products or services to
result from this mostly administrative change.
HEICO entered the TSCM field in June 2019 through its
acquisition of 75% of market-leader Research Electronics
International (“REI”) from its founder-managers, Tom Jones and
Bruce Barsumian, who continue to own the remaining 25% of REI. Mr.
Jones and Mr. Barsumian acquired 25% of ID and TS by contributing
their proportionate share of the cash investment, with HEICO
acquiring 75% of ID and TS. ID and TS will report to Mr. Jones,
though they will remain separate businesses from REI while
cooperating on developing new technology and offering unique
expanded product offerings to customers.
Laurans A. Mendelson, HEICO’s Chairman and Chief Executive
Officer, along with Victor H. Mendelson, HEICO’s Co-President and
Chief Executive Officer of its Electronic Technologies Group, and
Mr. Jones, jointly commented, “We welcome Edmund, Jon and all of
the Intelligent Devices and Transformational Security Team Members
to our HEICO family. The crucial TSCM field provides vital
equipment and services to keep sensitive information from reaching
the wrong hands and we are excited about the potential for all of
our companies to bring great products to our customers.”
Mr. Pirali and Mr. Whittingham jointly remarked,
“Transformational Security and Intelligent Devices are proud to be
joining the HEICO family of companies. HEICO represents a
philosophy of excellence, innovation and customer service that are
at the core of TS and ID products and technologies. Partnering with
HEICO extends and enhances our commitment to our customers. We look
forward to continuing to serve our customers within the umbrella of
a larger group, while maintaining our culture, customer service,
and the unique capabilities TS and ID bring to counterintelligence,
SIGINT, and spectrum operations customers.”
HEICO Corporation is engaged primarily in the design,
production, servicing and distribution of products and services to
certain niche segments of the aviation, defense, space, medical,
telecommunications and electronics industries through its
Hollywood, Florida-based Flight Support Group and its Miami,
Florida-based Electronic Technologies Group. HEICO's customers
include a majority of the world's airlines and overhaul shops, as
well as numerous defense and space contractors and military
agencies worldwide, in addition to medical, telecommunications and
electronics equipment manufacturers. For more information about
HEICO, please visit our website at http://www.heico.com.
Certain statements in this press release constitute
forward-looking statements, which are subject to risks,
uncertainties and contingencies. HEICO's actual results may differ
materially from those expressed in or implied by those
forward-looking statements as a result of factors including: the
severity, magnitude and duration of the COVID-19 outbreak; HEICO’s
liquidity and the amount and timing of cash generation; the
continued decline in commercial air travel caused by the COVID-19
outbreak, airline fleet changes or airline purchasing decisions,
which could cause lower demand for our goods and services; product
specification costs and requirements, which could cause an increase
to our costs to complete contracts; governmental and regulatory
demands, export policies and restrictions, reductions in defense,
space or homeland security spending by U.S. and/or foreign
customers or competition from existing and new competitors, which
could reduce our sales and profitability; our ability to introduce
new products and services at profitable pricing levels, which could
reduce our sales, sales growth or profitability; product
development or manufacturing difficulties, which could increase our
product development and manufacturing costs and delay sales; our
ability to make acquisitions and achieve operating synergies from
acquired businesses; customer credit risk; interest, foreign
currency exchange and income tax rates; economic conditions within
and outside of the aviation, defense, space, medical,
telecommunications and electronics industries, which could
negatively impact our costs and revenues; and defense spending or
budget cuts, which could reduce our defense-related revenue and
profitability. Parties reading this press release are encouraged to
review all of HEICO's filings with the Securities and Exchange
Commission, including, but not limited to filings on Form 10-K,
Form 10-Q and Form 8-K. We undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except to the
extent required by applicable law.
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Victor H. Mendelson (305) 374-1745 ext. 7590
Carlos L. Macau, Jr. (954) 987-4000 ext. 7570
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