Arotech Corp. in Ann Arbor has acquired South Carolina-based defense contractor UEC Electronics, which specializes in hybrid power generation systems, power subsystems for military vehicles, and aircraft and missile systems support for weapons and communications technologies.
As part of the $33-million acquisition, UEC will be integrated into Arotech’s Battery and Power Systems Division, says Robert S. Ehrlich, Arotech’s chairman and CEO. “UEC brings us significant electronic engineering and manufacturing skills which combines very well with our expertise in military and commercial grade battery technology and management systems,” he says. “In addition, we see very strong sales and marketing synergies as well as the potential to make efficient use of shared resources.”
The transaction is a logical progression for UEC, which provides a renewable power generation, storage, and distribution system for U.S. Marine Corps troops serving in austere environments, says Rebecca Ufkes, UEC’s president.
“This strategic alignment will provide UEC with access to capital required to scale our existing infrastructure for larger programs and requirements, as well as to increase distribution channels for UEC OEM products,” Ufkes says.
Arotech, which develops defense and security products for the military, law enforcement, and homeland security markets, reported revenue of $88.6 million for 2013 and expects to record $117 million to $123 million in sales this year.
The acquisition consisted of $28 million in cash, about $4.8 million in Arotech’s stock, and a potential earn-out of $5.5 million over the next two calendar years.