Israel’s Elbit Acquires BVR for $34M
Jul 20, 2009 12:19 EDT
Elbit Systems in Haifa, Israel, agreed to pay $34 million to acquire BVR Systems (1998) Ltd., a provider of training, simulation and debriefing systems for air, sea and ground forces. The transaction is subject to price adjustment as well as fulfillment of certain conditions, including receipt of all approvals required by law. The transaction will also include the re-employment of BVR’s employees by Elbit.
The merger affects, and is affected by, BVR’s recent debt financing agreement. BVR provides a range of services to militaries around the world…
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Based in Rosh Ha’ayin, Israel, BVR provides live/embedded, virtual and constructive training for joint force, on-board and distributed simulation systems. They are most famous for their EHUD AACMI pods, which are used to track the exact positions of aircraft participating in air combat training, for use in subsequent debriefings. Their Embedded Virtual Avionics allow trainer aircraft to simulate more advanced and costly fighters, while naval systems like NCMI and land systems like HADES allow the integration of virtual targets and AACMI data into naval platforms and air defense systems during combined exercises.
The firm also produces data links and avionics, as a natural extension of its other businesses. Its interesting “Minimally Intrusive Approach” is a unit that can be added between the an existing databus and the Remote Terminals (RTs). The MII unit then controls the RTs’ operation as a new Bus Controller (BC), without changing the existing bus operating system without introducing incompatibilities.
On May 28/09, BVR announced $3.5 million in debt financing from Yuval Golan Investments Ltd. and Michael Golan Securities Holdings Ltd. The terms included repayment within a year at 10% interest ($3,850,000), but those terms would change if there was a merger or acquisition within 12 months.
A merger causes an immediate repayment of $4.55 million to create a 30% absolute return, plus an option to purchase 3 million Ordinary Shares of BVR, at an exercise price per share of $0.18, exercisable for a period of 5 years.
