Magellan and Ashtech to become a new $125 million satellite navigation, positioning and communications products company
SAN DIMAS, CA/SUNNYVALE, CA (December 02, 1997) In a move that will create a $125 million satellite access products company, Orbital Sciences Corporation (NYSE: ORB) has signed a definitive agreement with privately held Ashtech of Sunnyvale, CA, which will merge Global Positioning System (GPS) technology developer/manufacturer Ashtech into Orbital Sciences Corporation's San Dimas, CA-based Magellan Corporation subsidiary, a leading GPS consumer products and satellite communications equipment company.
David W. Thompson, Orbital Sciences Corporation'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."
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 telephones 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 Precision Products company will consist of four key operating units: GPS and GPS+GLONASS solutions under the Ashtech Precision Products 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 will be accomplished through the exchange of stock and cash between the privately held Ashtech Inc. and Orbital Sciences Corporation, a leading commercial space products and services company. The Ashtech stockholders will receive $25 million and 34% ownership in Magellan Corp., while Orbital Sciences Corporation 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 PioneerTM 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 PathMasterTM 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.