EADS North America Acquires Racal Instruments; First American acquisition strengthens and broadens EADS North America and creates leading Global Test and Services Company

ARLINGTON, Va.--()--Oct. 6, 2004--

  Racal Instruments' market position strengthened  



EADS North America has acquired Racal Instruments Group, marking the initiation of a core strategic element of growth through acquisition. Racal Instruments is a leader in the development, production, and integration of systems and instruments to test electronics, aerospace, and defense systems. Racal Instruments will be operated through EADS North America Defense Company.

"The acquisition of Racal Instruments is part of the long-term growth strategy of EADS in North America," stated Ralph D. Crosby, Jr., Chairman and CEO, EADS North America and a Member of the EADS Executive Committee. "With this acquisition, we obtain a market leader in the integrated test business in the U.S., build upon our other U.S. test businesses, and add materially to our critical mass as a leading global test and services company. EADS will provide Racal Instruments with an enhanced technology base, improved financial stability, and thus better position it to develop new capabilities," Crosby said. "This will facilitate the production of a more extensive range of products, and services."

Gordon Taylor, CEO of Racal Instruments, commented: "Racal Instruments has a long and successful history as an innovator in the test systems product market. Now, as part of the EADS Group, our military and commercial customers will enjoy improved security of guaranteed long-term support. Our new company can better support the move toward common Automated Test Equipment (ATE) systems and applied solutions, across a broader base of programs and test sets. The inclusion of Racal Instruments' U.S. business in the new EADS North America Defense Company will also make us better able to serve military customers who require classified instrumentation and test equipment."

Racal Instruments was acquired from an entity controlled on behalf of the Thomas Weisel Capital Partners funds and J.F. Lehman and Company. The price of the acquisition is $105 million, plus or minus net cash at the date of closing, and the sellers have agreed to an earn-out formula whereby EADS pays up to an additional $25 million for guaranteed future bookings until mid 2005. Racal Instruments employs more than 320 professionals in the U.S. (Irvine, CA, and San Antonio, TX), the United Kingdom, Europe and Asia and supports both commercial and military customers worldwide. Revenue for the year in progress is expected to be $84 million, reflecting strong year-to-year growth. Upon completion of the transaction, Racal Instruments, Inc. (Irvine, CA and San Antonio, TX) will transfer to EADS North America Defense Company and Racal Instruments UK, Europe and Asia will be transferred to EADS Test and Services in the Defense and Security Systems Division of EADS.

Tom Enders, Member of the EADS Executive Committee and Head of the EADS Defense and Security Systems Division, said, "Beyond the U.S. market, Racal Instruments UK and EADS Test & Services will form the European leader in Aerospace and Defense Testing. The new company will be a strong global competitor in the test and services industry, with world-class software and engineering capabilities, uniquely capable of offering customers a global full-service support network."

EADS Test & Services is a specialist in Automatic Testing and offers a line of test systems and services for the integration, production and maintenance testing of electronic, optro-electronic and radar equipment installed in airliners, military aircraft, helicopters, tanks, missiles and weapon systems. More than 800 test stations and 4,000 test programs have been delivered throughout the world to more than 160 airlines, maintenance organizations, equipment manufacturers and armed forces. Building on its test expertise, the ISO 9001-certified company increasingly supplies test engineering and obsolescence management services to the industry.

About Racal Instruments (www.racalinstruments.com)

Racal Instruments designs, manufactures, sell, and services electronic test and measurement equipment and systems to leading high-technology customers throughout the world. It has facilities in the U.S., UK, France, Italy, and Germany and a sales and support network in over 80 countries. The company offers an extensive range of products and services, from modular instruments to turnkey automatic test systems. These are ideal for use in a wide variety of applications, including commercial functional test and measurement, laser diode burn-in and production, microcomputer production, and jet engine test. Among the key market sectors the company serves are Military, Aerospace, Telecommunications, Semiconductor, and Commercial Manufacturing.

About EADS North America (www.eadsnorthamerica.com)

EADS North America is the North American operations of EADS, the second largest aerospace and defense company in the world. As a leader in all sectors of aerospace, defense and homeland security, EADS North America and its parent company, EADS, contribute more than $6 billion to the U.S. economy annually, and support more than 100,000 American jobs through its network of suppliers and services. With 12 operating companies located in 39 American cities and 21 states, EADS North America offers a broad array of advanced solutions to its customers in commercial, civil, para-public and defense markets across the United States.

EADS North America Subsidiaries:

EADS North America Defense Company, Arlington, VA; ARC Information Assurance Institute, San Antonio, TX; American Eurocopter LLC, Grand Prairie, TX; EADS Aeroframe Services, LLC, Lake Charles, LA; EADS CASA North America, Chantilly, VA; EADS Sogerma Barfield, Inc., Miami, FL; Socata Aircraft, Inc., Pembroke Pines, FL; EADS Supply & Services, Rockville, MD; EADS TELECOM North America, Frisco, TX; Fairchild Controls Corporation, Frederick, MD; TYX, Reston, VA.

About EADS Test & Services (www.eads.net)

EADS Test & Services is an integrated part of the EADS Defense and Security Systems Division (DS). DS, with revenues of over 5.2 billion euros in 2003 and roughly 24,000 employees across nine nations, forms the defense pole within EADS.

About EADS

EADS is a global leader in aerospace, defence and related services. In 2003, EADS generated revenues of more than 30 billion euros and employed a workforce of more than 109,000. The EADS Group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and the joint venture MBDA, the second largest missile producer in the global market. EADS is the major partner in the Eurofighter consortium, is the prime contractor for the Ariane launcher, develops the A400M military transport aircraft and is the largest industrial partner for the European satellite navigation system Galileo.

Contacts

EADS North America
Diane Murphy, 703-236-3300
Diane.Murphy@eads-na.com
or
EADS Defence and Security Systems Division
Alexander Reinhardt, +49 89 607 34 862
Alexander.Reinhardt@eads.net

Contacts

EADS North America
Diane Murphy, 703-236-3300
Diane.Murphy@eads-na.com
or
EADS Defence and Security Systems Division
Alexander Reinhardt, +49 89 607 34 862
Alexander.Reinhardt@eads.net