12/9/2004 - Mercury Computer Systems, Inc. (NASDAQ: MRCY) announced it has purchased Momentum Computer, Inc. for approximately $14 million in cash, with the potential for additional cash payments upon the achievement of certain performance criteria. Headquartered in Carlsbad, California, Momentum is a developer of high-performance single-board computers for telecommunications, defense, medical, and other commercial markets.
"This acquisition enables Mercury to offer a broader selection of products to our customers, supporting them across more programs," said Jay Bertelli, president and chief executive officer, Mercury Computer Systems, Inc. "One of several market examples is telecommunications, where the Momentum team continues to meet and exceed stringent price and performance requirements."
Mercury's leadership in interconnect technology, system architecture, and integration, coupled with the strength of its relationships with industry- leading OEMs, uniquely positions the Company in high-growth segments within the telecommunications, defense, medical, and other commercial markets. Momentum's high level of engineering expertise and efficient processes amplify the mutual value-add to these markets. As a result of the acquisition, Mercury's extensive sales channels can offer the optimal price-performance solutions to an extended customer base.
"We are very excited to be a part of Mercury," said Harry White, president of Momentum Computer, Inc. "Operating as a separate unit within Mercury, we are well positioned to continue expanding our current product line, while delivering the same excellent levels of service and support our customers have come to expect. In addition, current and new customers will clearly benefit from the financial and R&D strength of Mercury."
Earlier in the year, Mercury had acquired a 35% voting interest in Momentum for $3.1 million. On December 7, 2004, the Company acquired the remaining 65% voting interest for $11 million in cash. Up to $12 million of additional cash consideration is payable if specified operating income and revenue targets are achieved by Momentum over the following 24 months. Any such payments will be recorded as additional purchase price if incurred in the future.
The revenue run rate for Momentum approximates $10 million per year, and the company is modestly profitable. The acquisition is expected to be accretive within six months.
Momentum's design capabilities using standard components, combined with Mercury expertise in architecture, optimized software and middleware in multiprocessing applications, has already demonstrated success. The Mercury XR9 and XRi computing and visualization systems, as well as the Mercury XB Series modular, high-density workstation, have leveraged Momentum's rapid response development capability. These systems were demonstrated to wide acclaim at the Radiological Society of North America (RSNA) conference held November 28-December 3 in Chicago, Illinois.
Momentum's strength in rapidly developing custom, cost-effective solutions will help to position Mercury to address defense and homeland security programs where optimal performance is a requirement. By leveraging Mercury's continuing investments in industry-leading research and development, the combined businesses will be positioned to architect the optimal solutions for existing and new markets.
A related Q&A is available at http://www.mc.com/investor.
About Mercury Computer Systems, Inc.
Mercury Computer Systems, Inc. (NASDAQ: MRCY) is the leading provider of high-performance embedded, real-time digital signal and image processing solutions. Mercury's products play a critical role in a wide range of applications, transforming sensor data to information for analysis and interpretation. In military reconnaissance and surveillance platforms the Company's systems process real-time radar, sonar, and signals intelligence data. Mercury's systems are also used in state-of-the-art medical diagnostic imaging devices including MRI, CT, PET, and digital X-ray, and in semiconductor imaging applications including photomask generation and wafer inspection. Mercury provides advanced 3D image processing and visualization software and optimized systems to diverse end markets including life sciences, geosciences, and simulation. The Company also provides radio frequency (RF) products for enhanced communications capabilities in military and commercial applications.
Based in Chelmsford, Massachusetts, Mercury serves customers in North America, Europe and Asia through its direct sales force and a network of subsidiaries and distributors. Visit Mercury on the web at http://www.mc.com.
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