Australia's Tenix group is to extend its dominance of the domestic defence sector with the planned purchase of the Vision Abell and LADS subsidiaries of Adelaide-based Vision Systems.
The A$74 million ($45 million) takeover may signal a new round of Australian rationalisation, this time involving leading second-tier contractors such as CEA Technologies, Australian Technology Information and Compucat.
The takeover, due to be finalised by the end of next month, will see Tenix gain control of important Australian geographic information system and airborne electronic warfare (EW) contracts.
Vision Abell is the prime contractor for the Australian defence department's Joint Project 2049 multilevel information security system redevelopment. It is competing with a joint Tenix-Air Affairs bid for the Royal Australian Navy's (RAN) commercial EW training system contract. Vision's bid teams it with FRA and National Jet Systems.
LADS operates the Australian laser airborne depth sounding system, and has support contracts for a first-generation system owned by the RAN. It also offers a commercial survey service based on a sounder fitted to a de Havilland DHC-8-200.
The acquisitions will further a three-year push by Tenix to build up a defence systems business unit, which included attempts in 1997 to buy Telstra Trusted Systems, which was subsequently taken over by Vision Abell in a A$1.6 million deal in 1998.
Completion of the Tenix transaction will mark Vision Systems' withdrawal from the aerospace and defence sectors, although it will retain a short-term role in managing Vision Abell and LADS.
Source: Flight International