Andrew Corporation, which employs 250 people at a satellite dish manufacturing plant in Smithfield, is selling its satellite communications business to an Ohio company.
The deal includes the Smithfield operation, and it could mean good news for the region in terms of jobs.
“It really won’t have any impact immediately. We will maintain the status quo,” said Bassem Mansour, managing partner for Resilience Capital. “We’re hoping to grow that business over time.”
Andrew Corporation had at one time employed more than 400 people in Smithfield where it leases a portion of a 750,000 square foot structure. Under its previous owner, Channel Master, the plant once employed 1,600 people. Channel Master went bankrupt and Andrew acquired the operation in 2005.
Resilience Capital, a private equity firm based in Cleveland, will pay Andrew (Nasdaq: ANDW) approximately $39 million for the satellite subsidiary. Andrew also will keep an equity stake in the new business that Resilience Capital will build around the acquisition. It will be called ASC Signal Corporation.
The Smithfield operation is a major part in the deal since it employs around half of the employees Resilience Capital inherits from Andrew, according to Mansour.
Andrew, which is based in Westchester, Ill., decided to exit the satellite business, citing it as “under performing.” However, Resilience Capital believes there a significant opportunity for growth as the satellite industry grows worldwide, Mansour explained.
“We see it as a growth opportunity and these guys were a leading player in the business,” he said of Andrew’s operation. “We believe we can grow it both organically and through acquisitions.”
In a statement announcing the deal, Bassem said Reslience is “confident that, when given the opportunity to be decoupled from Andrew, this business and its people will find itself to be an even more significant integrated systems supplier in its marketplace and to its customers.”
Andrew’s losses in the business had grown over the past two years.
“For several quarters we’ve highlighted losses that we have incurred in that business,” said Andrew spokesperson Rick Aspan.
He noted that in fiscal 2007 that ended Sept. 30 the group lost $50 million on revenues of $104 million. That total includes a non-cash impairment charge of $32 million. In fiscal 2006 the group lost $18 million on revenues of $122 million.
“That was a significant drag on our overall company performance,” Aspan said.
Three other Andrew facilities are also involved in the transaction, including operations in Canada, Texas and Germany. Resilience also will lease space in other Andrew locations where satellite work is being done, according to Aspan.