Kanders & Company Completes Acquisition of Antenna and Test Equipment Businesses from L3Harris

Rhea-AI Summary

Kanders & Company has completed its acquisition of certain antenna and test equipment businesses from L3Harris Technologies for $200 million.

The acquired businesses, ATI, Datron, and Randtron, will operate under Kanders' new defense technology platform, Fisica.

Fisica will manufacture antennas and electromagnetic systems for various defense applications, including radar and communications.

Based in San Leandro, with additional operations in Menlo Park and Simi Valley, Fisica aims for growth as a critical partner for defense primes and the U.S. Department of Defense.

Warren B. Kanders will serve as Fisica's Executive Chairman, with Mark Rayner as President and Christopher Prabhu as CFO.

Positive

• Completion of a $200 million acquisition expands Kanders' portfolio.
• Launch of Fisica positions the company in the defense technology sector.
• Acquired businesses have strong existing management with over 30 years of experience.
• Fisica's operations are located in strategic areas in California.
• Fisica aims to be a critical partner for U.S. defense primes and the Department of Defense.
• Leadership team includes renowned experts like Warren B. Kanders, Mark Rayner, and Christopher Prabhu.

Negative

• The $200 million expenditure could impact Kanders' financial liquidity.
• Integration risks with the newly acquired businesses may pose challenges.
• Financial performance of acquired businesses under new management remains uncertain.

Insights

Financial Analyst

Kanders & Company completing the acquisition of certain antenna and test equipment businesses from L3Harris Technologies for $200 million has significant implications for stakeholders.

For investors, this deal represents a strategic consolidation in the defense technology sector. The newly formed entity, Fisica, should be closely observed as it has the potential for organic growth and further acquisitions. The leadership team, with strong backgrounds in both finance and technology, suggests a stable and experienced management structure, which is essential for successfully integrating new acquisitions and driving growth.

In the short term, investors might consider the financial stability and potential revenue boost from the acquired businesses. Long-term, the focus should be on how well Fisica leverages its new assets and positions itself within the broader defense space. This deal could enhance Kanders' competitive edge in the defense sector, particularly in segments like radar, communications and electronic warfare.

Defense Industry Expert

The acquisition marks a pivotal move for Kanders & Company's new platform, Fisica. With assets specializing in airborne and ground-based antennas, electromagnetic systems and simulators, Fisica is poised to become a critical supplier to the U.S. Department of Defense (DoD) and flagship defense primes. This can mean lucrative, long-term contracts, ensuring steady revenue streams.

Moreover, the defense sector's reliance on cutting-edge technologies for applications such as remote sensing and nuclear effects testing places Fisica in a strong position to innovate and meet emerging needs. The company's ability to cater to these high-demand areas will be important for its market positioning. Investors should watch for how new product developments and DoD contract wins unfold.

Market Research Analyst

Combining the antenna and test equipment businesses into Fisica offers potential market synergies. By integrating these operations, Fisica can streamline R&D efforts, reduce costs and enhance its product offerings across a wider array of applications. This strategic alignment can provide a competitive advantage and accelerate market penetration.

The presence of distinguished independent directors, like Hamish Norton, Lisa Randall and Neil deGrasse Tyson, adds significant intellectual capital to the leadership team. Their extensive backgrounds in physics and defense-related technologies suggest Fisica might prioritize innovation and advanced technological developments, setting it apart from competitors.

For retail investors, it's essential to follow how Fisica capitalizes on these synergies and the market’s reception to its offerings, especially in high-tech segments of the defense sector.

Launches Fisica, Kanders' New Defense Technology Platform

PALM BEACH, Fla., June 3, 2024 /PRNewswire/ -- Kanders & Company, Inc. ("Kanders"), a U.S.-based single-family office, announced today the completion of its previously announced acquisition of certain antenna and test equipment businesses from L3Harris Technologies (NYSE: LHX) for $200 million.

The acquired ATI, Datron and Randtron businesses will operate under Fisica, Inc. ("Fisica"), Kanders' defense technology platform, and manufacture airborne and ground-based antennas, and electromagnetic systems and simulators for applications across radar, communications, warning systems, remote sensing, nuclear effects testing and imaging. Fisica, which is based in San Leandro, Calif., with additional operations in Menlo Park and Simi Valley, Calif., is well positioned for continued growth as a critical partner for flagship defense primes and the U.S. Department of Defense. Additional information about Fisica can be found at https://www.fisica.com.

"We are pleased to complete this transaction and launch Fisica, a defense industry platform positioned to grow organically and through targeted acquisitions," said Warren B. Kanders, President of Kanders and Executive Chairman of Fisica. "Alongside the talented existing management team, I look forward to leveraging and building on Fisica's outstanding portfolio to serve a growing need in the electronic warfare and communications industry. I view these businesses as an excellent starting point to think expansively and opportunistically about growth in the broader defense space."

Warren B. Kanders will serve as Executive Chairman of Fisica. The businesses will be led on a day-to-day basis by President Mark Rayner and Chief Financial Officer Christopher Prabhu.

Mr. Rayner has over 30 years of experience in satellite communications, electronic protection and support, and antenna technology. Prior to the transaction he was serving as General Manager overseeing these businesses for the seller, and his prior experience includes time at TRW Inc.

Mr. Prabhu joined the seller in 2019 as CFO of the ATI business and following a series of consolidations, grew to oversee all the businesses as finance lead. He has over 20 years of aerospace and defense industry experience with companies such as Dover Corporation, GE Aviation, Triumph Group, and IMPEX.

Three well-respected independent directors will round out the leadership of Fisica, including:

• Hamish Norton is the President of Star Bulk Carriers Corp. and in addition to a distinguished career in finance and shipping, has an undergraduate degree in physics from Harvard College and a Ph.D. in physics from the University of Chicago.
• Lisa Randall is the Frank B. Baird, Jr., Professor of Science at Harvard University, having previously taught at MIT, Princeton University, and University of California-Berkeley. Professor Randall is a bestselling author and her studies have made her among the most cited and influential theoretical physicists. She has an undergraduate degree and a Ph.D. in physics from Harvard University.
• Neil deGrasse Tyson is a well-known astrophysicist and author who received an undergraduate degree in physics from Harvard College, and a PhD in astrophysics also from Columbia University.

About Kanders & Company, Inc.

Kanders & Company, Inc., based in Palm Beach, Florida, is a single-family office owned and controlled by Warren B. Kanders. Mr. Kanders has more than 35 years of experience investing in public and private companies across a variety of sectors, acting as an active strategic partner for enhancing operating discipline and catalyzing long-term growth.

About Fisica

Fisica, Inc. is a leading defense products manufacturer that was formed to acquire the Randtron, Datron and Applied Technologies Inc. businesses, establishing a platform that designs and produces airborne antennas, ground-based antennas, and electromagnetic systems and simulators. Headquartered in San Leandro, Calif., with additional operations in Menlo Park and Simi Valley, Calif., the company has approximately 375 employees.

Contacts:

Kanders & Company
Gray Hudkins
ghudkins@kanders.com
(203) 550-7148

Media
Aura Reinhard / Tim Ragones
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449

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SOURCE Kanders & Company, Inc.

FAQ

What is the value of Kanders & Company's acquisition from L3Harris Technologies?

The acquisition was valued at $200 million.

What businesses did Kanders & Company acquire from L3Harris Technologies?

Kanders & Company acquired ATI, Datron, and Randtron.

Under which platform will the acquired businesses operate?

The acquired businesses will operate under Kanders' new defense technology platform, Fisica.

Where is Fisica based?

Fisica is based in San Leandro, with additional operations in Menlo Park and Simi Valley, California.

Who will serve as the Executive Chairman of Fisica?

Warren B. Kanders will serve as the Executive Chairman of Fisica.

What is the main focus of Fisica's manufacturing?

Fisica will manufacture antennas and electromagnetic systems for defense applications, including radar and communications.

Who are the key members of Fisica's leadership team?

The leadership team includes Warren B. Kanders as Executive Chairman, Mark Rayner as President, and Christopher Prabhu as CFO.