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Moog Purchases Broad Reach Engineering for $48 Million
WASHINGTON — In the latest of a string of strategic acquisitions, satellite component maker Moog Inc. announced Jan. 2 that it had purchased space avionics and software provider Broad Reach Engineering Co. for $48 million.
Moog of East Aurora, N.Y., makes reaction wheels, valves and other control systems for satellites, rockets and aircraft. Broad Reach of Golden, Colo., produces spacecraft and payload avionics, microprocessors, software, GPS receivers and communications terminals.
“This acquisition gives us a capability from mission design through mission execution for commercial and military aerospace customers worldwide,” Jay K. Hennig, president of Moog’s Space and Defense Group, said in a prepared statement. “Broad Reach has extensive spaceflight heritage and an entrepreneurial spirit that impresses us.”
In a written response to questions, Hennig said the deal did not meet the $68.2 million threshold for requiring approval by U.S. antitrust regulators.
Broad Reach has supplied avionics for missions including the U.S. Air Force’s experimental XSS-11 on-orbit rendezvous mission and NASA’s Lunar Reconnaissance Orbiter as well as gimbal drivers for the international space station, Moog said.
“Broad Reach’s and Moog’s avionics products are different, but obviously complementary and proven,” Broad Reach Chief Executive Chris McCormick said in a prepared statement. “But it’s the spaceflight heritage between our respective companies’ ears that can help us capitalize on market trends like the move toward small, reliable spacecraft.”
McCormick, who previously worked for the former Spectrum Astro space hardware company, will become vice president of the Moog Space and Defense Group’s Space Sector. He replaces Doug Morash, who is retiring after more than 30 years with Moog’s space business.
Broad Reach has some 60 employees in Golden; Tempe, Ariz.; and San Jose, Calif. These workers are now Moog employees.
Hennig said no facility closures or layoffs are planned as part of the acquisition.
The acquisition comes on the heels of Moog’s July purchase of American Pacific Corp.’s In-Space Propulsion business for $46 million, a move Moog said would add $50 million to revenue in 2013. The addition of that business, which makes liquid-fueled propulsion for satellites and missile defense systems, contributed $9 million to Moog’s 2012 revenue, according to a Nov. 20 company filing with the U.S. Securities and Exchange Commission (SEC).
In December 2011, Moog acquired satellite equipment maker Bradford Engineering of the Netherlands, a move that strengthened its presence in Europe and added $8 million to 2012 revenue, according to the SEC filing.
Total revenue for Moog’s Space and Defense Group for 2012 was $359 million, a 1 percent increase from 2011, according to the SEC filing. Moog projects $413 million in sales for the group for 2014, a 15 percent increase “to be primarily attributable to our acquisitions and to foreign opportunities in our missile defense programs,” the company said in the filing.
Hennig said the Broad Reach acquisition is expected to add $32 million to Moog’s annual revenue.
He declined to say whether Moog is interested in pursuing other space-related acquisitions.
“All of these acquisitions were strategic — expand in Europe, strengthen propulsion system capabilities and add avionics,” Hennig said. “In all cases we developed a relationship with the owners years prior to the acquisition and made it clear that when they were ready to sell, we were interested. I don’t think overall market conditions were a factor.”
Hennig said Broad Reach adds “avionics, payloads and mission planning to our capabilities. Developing or acquiring these capabilities has been a key element of our strategy for several years.”
Hennig sited the PlanetIQ venture — Moog, Broad Reach and Millennium Engineering and Integration Co. of Arlington, Va., are founding partners — as an example of how Moog will be able to leverage its newly acquired capabilities. PlanetIQ aims to build and launch a constellation of small environmental monitoring satellites, and Moog, following the acquisition of Broad Reach and others, will be able to produce most of the spacecraft subsystems and components as well as integrate the mission.
“PlanetIQ is a good example of Moog pursuing an opportunity we could not have a few years ago as well as payload design and development that we had not been involved in before,” Hennig said.
The Broad Reach acquisition puts Moog in position to compete with companies like Honeywell Aerospace and BAE Systems in the space avionics market, Hennig said.