L-3 Communications buys UK-based MacDonald Humfrey

23 November 2016

U.S. defense contractor L-3 Communications Holdings Inc (LLL.N) said it had acquired UK-based MacDonald Humfrey Automation Ltd for 224 million pounds ($278 million) to strengthen its position in the aviation security market.

MacDonald Humfrey makes automated tray handling systems and airport checkpoint security systems that integrate inputs from CCTV cameras on a single platform.

L-3 makes airport security products, explosives detection systems and whole body imaging systems, among other devices such as military and commercial aircraft flight simulators and global positioning system receivers.

The deal, which comes after the UK's decision to leave the European Union, will generate sales of about $135 million in 2017, L-3 said.

MacDonald Humfrey, which has 350 employees, will operate under L-3's electronic systems business that accounted for about 41 percent of L-3's total revenue of $10.47 billion in 2015.

The purchase price is subject to an upward adjustment of up to 30 million pounds, based on MacDonald Humfrey's post-acquisition performance for the next three years, L-3 said.