HEICO Corporation Acquires Niche Embedded Computing Company
HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) today announced that its Electronic Technologies Group acquired 89.99% of Connect Tech Inc. ("CTI (News - Alert)") 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 expects the acquisition to be accretive to its earnings within the first year following the closing. With this acquisition, HEICO has completed six highly specialized, niche acquisitions in its current fiscal year and four since the COVID-19 pandemic's start.
Connect Tech designs and manufactures rugged, small-form-factor embedded computing solutions and offers both standard commercial off-the-shelf products, as well as custom design services. CTI is well-regarded for its computer-on-module carrier boards and GPU solutions. CTI is NVIDIA's (News - Alert) largest global embedded hardware partner, for which it is an NVIDIA® Jetson Elite Partner. CTI's components are designed for the harshest environments and are primarily used in rugged commercial and industrial, aerospace and defense, transportation, and smart energy applications.
Connect Tech will continue to operate and serve its customers out of its 20,000-square-foot, fully-integrated design and manufacturing facility in Guelph, Ontario. Connect Tech employs approximately 65 team members, and HEICO stated that it does not expect any staff turnover to result from the acquisition.
David Worthen, who co-founded Connect Tech in 1985, will remain as Connect Tech's President and will be HEICO's partner in the company, retaining the portion not acquired by HEICO. Mr. Worthen commented, "HEICO's resources will help to fuel continued product development and growth while our current executive team will remain intact to ensure a seamless transition for our global customer base. Having gotten to know HEICO over the past four years, I felt they are the ideal partner for us."
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, jointly commented, "Connect Tech is known among its customers as being completely devoted to those customers' needs and has a reputation for excellen engineering, quality and response times, all characteristics which attracted us to the company. Dave Worthen built and leads a special team and we are delighted to be partnered with the industry's best. "
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.
Connect Tech Inc. is NVIDIA's largest global embedded hardware partner offering a wide array of NVIDIA® Jetson™ solutions, as well as embedded solutions for a variety of industry standards including COM Express, SMARC, and more. With over 35 years of embedded computing experience, Connect Tech's range of proven technology includes complete embedded systems, carrier boards, thermal solutions, and more. With in-house design and manufacturing services, Connect Tech can provide fast turn-around of custom design services, taking you from development to deployment in record time. For more information visit www.connecttech.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.