Sydney-based HarTec has acquired the business assets of Plessey Asia Pacific’s communications division, formerly AWA Communications, for an undisclosed but cash amount.
The acquisition will see HarTec establish a separate company and market the technology under the brand name Longreach Communications, with all products manufactured through the company’s existing manufacturing and repair facilities.
HarTec also plans to undertake an extensive R&D campaign to extend the wireless RF technology in terms of both overall capacity and frequency, according to HarTec managing director Andrea Taylor.
“We see the Plessey Asia Pacific acquisition as a platform on which to build a substantial microwave radio business,” Taylor said.
“HarTec intends to become a significant global player in long reach communications, and with over 90% of the technology having export potential, our business focus will hinge on exporting it to developing countries”.
“There may also be opportunities for upgrading facilities in Australia,” Taylor added.
Under the acquisition terms, HarTec will gain control of an installed base of 15,000 microwave radio towers located both in Australia and various developing countries around the world.
The newly acquired division is expected to generate $4 million in ongoing revenue until an aggressive product upgrade and relaunch due in the next financial year, according to HarTec chairman Morris Symonds.
“I believe there will be substantial opportunities to leverage off the established brand, technology and installed customer base,” Symonds said.
“It is our intent to run out the existing product prior to upgrading the technology and aggressively re-launch the products in the next financial year”.
Any upgrades will be backwards compatible with existing and previous Plessey products, with improvements to be made in regards to the functionality, capacity and frequency constraints on the existing product lines, according to Taylor.
“Backwards compatibility will be vital to any product upgrades, with all development running concurrently with selling the products to ensure a smooth product line transition,” Taylor said.
As part of the acquisition, HarTec will also take over any existing distribution agreements in place between the Plessey division and product resellers.
“What we are aiming to do is leverage off the existing technology, customer base and distribution channels,” Taylor said.
The new company created as part of the acquisition process will be a pure product house responsible for the development and distribution of radio-based products, both domestically and internationally.
It will join the Design and Manufacturing and Repairs and Logistics businesses as a third autonomous business under the HarTec integrated group of electronics companies, Symonds said.
“It is important to note that HarTec will establish an independent product house to develop and market the exciting and new generation wireless products,” Symonds continued.
“All the administration, manufacturing and engineering support will be subcontracted to our manufacturing and repair businesses therefore providing substantial revenue, cost and operational advantages”.
The Plessey Division, formerly AWA Communications, has manufactured and sold approximately $300 million of microwave wireless point-to-point radio equipment since 1986, with the majority of sales to Telstra in the Australian regional network rollout.
Plessey acquired AWA Communications in 1997 before the division was sold to HarTec in 2001.