In a move that will create a $125 million satellite access products company, Orbital Sciences Corporation has signed a definitive agreement with privately held Ashtech Inc. of Sunnyvale, CA, which will merge Global Positioning System (GPS) technology developer/manufacturer Ashtech into Orbital's San Dimas, CA-based Magellan Corporation subsidiary, a leading GPS consumer products and satellite communications equipment company.
David W. Thompson, Orbital's chairman and chief executive officer, stated,
“Operating under the Magellan banner, the new organization will become the
world's foremost satellite access products technology business, offering
advanced GPS positioning, navigation and timing solutions as well as the
latest satellite telephony and data communications products for rapidly
expanding industrial, commercial and consumer markets worldwide.''
Charlie Trimble, president and chief executive officer, of Trimble, commented, “As we've said before, consolidation in the GPS industry is inevitable with the scores of companies competing in the business. We see the merger of two competitors as positive for the industry.''
“When completed, the combination of these two companies should create a strong number two
competitor in the GPS industry, further increasing the pressures on the many niche players,'' he added.''
According to figures compiled by the United States GPS Industry Council,
global sales for GPS products are projected to reach $8.5 billion by the year
2000. Specializing in advanced satellite technologies, Magellan will benefit
from several trends driving this growth: safety and collision avoidance; the
integration of components into existing hand-held devices, such as wireless
telephone and personal digital assistants; and the need of nearly all people
to locate themselves in relationship to a destination, whether on foot in the
wilderness, in a kayak on the ocean or in a car on a city street. Key markets
identified by the USGIC include car navigation, consumer/cellular, tracking,
OEM, survey and mapping, Geographic Information Systems, aviation, marine and
military. The new Magellan Corporation will be the only company in the world
to design and manufacture products for all of those markets, Thompson noted.
The combined Magellan-Ashtech company will consist of four key operating
units:
. GPS and GPS+GLONASS solutions under the Ashtech brand for surveying,
mapping, GIS and OEM products for timing, positioning and navigation;
Consumer GPS products from Magellan for recreation, marine and aviation
applications;
. Vehicle navigation products and intelligent transportation technologies
from Magellan's Driver Information Systems group, and;
. Magellan's satellite-based wireless communication products including
portable satellite telephones and hand-held, satellite messaging devices.
“Magellan's expertise in low-cost receiver design and manufacture, its
global marketing and distribution strength and the extremely high brand
awareness it enjoys around the world balance perfectly with Ashtech's world-
class GPS and GPS+GLONASS technology development, its applications engineering
expertise, and its high-end manufacturing proficiency,'' according to Ashtech
President and CEO Charles M. Boesenberg, who will become President and CEO of
Magellan upon completion of the transaction later this month.
The Merger
The merger will be accomplished through the exchange of stock and cash
between the privately held Ashtech Inc. and Orbital, a leading commercial
space products and services company. The Ashtech stockholders will receive
$25 million and 34% ownership in Magellan Corp., while Orbital will own the
remaining 66%.
Speaking on behalf of the Ashtech board of directors, former Apollo 13
astronaut Capt. James A. Lovell, Jr. described the merger as “a shining
example of how business can help us achieve the promise that space technology
offers for enhancing our lives. This merger is great for GPS and all who use
the technology.''
Once the deal is final, Magellan will employ about 500 people and combined
1997 revenues should top $100 million. Magellan-Ashtech products will be sold
in more than 12,000 retail outlets in more than 100 countries through a
network of dealers, distributors and agents. The merged operation will be
headquartered in Sunnyvale, CA. Other company locations will include San
Dimas, CA; Reston, VA; Plano, TX; Newport, RI; Kansas City, MO; Rochester
Hills, MI; international offices in the United Kingdom, Germany, and Hong
Kong; and a GPS/GLONASS technology center in Moscow, Russia.
Background on Magellan and Ashtech
Magellan introduced the first hand-held GPS receiver in 1989, and has sold
more than one million GPS navigators since that time. The company specializes
in easy-to-use, affordable GPS and satellite communications products for
automotive, aviation, GIS, marine, outdoor recreation and wireless
communications markets worldwide. Its newly released GPS Pioneer(TM) is the
first hand-held GPS product to retail for under $100.
The company is also a pre-eminent designer and manufacturer of advanced
vehicle navigation systems. The innovative Magellan PathMaster(TM) route
guidance and driver information system is installed in more than 10,000
vehicles in the United States, including some 8,000 Hertz rental cars.
Additionally, Magellan offers both geostationary and low-Earth-orbit (LEO)
satellite communications products. The Magellan World Phone provides
worldwide voice, fax and data communication capability via Inmarsat Series-3
satellites, and the new GSC 100 is the world's first hand-held satellite
communications device, affording global two-way text messaging via the ORBCOMM
LEO satellite network and navigation via GPS.
Ashtech's professional GPS products for precision geopositioning
applications are used in such disciplines as agriculture, civil engineering
and construction, environmental remediation and protection, forestry, mining,
natural resource management, oil/gas/mineral exploration and extraction,
survey, transportation, and utilities management. The company also engineers
and manufactures board-level GPS receiver modules and GPS chip sets (with
Philips Semiconductor) for integration in a variety of products and systems
requiring precise position, velocity and timing information. Ashtech is the
premier integrator of GPS and GLONASS, the Russian equivalent of GPS.
