Frequency Electronics buys Elcom Technologies

Plans for the acquisition were announced earlier this month. Frequency has held a minority interest in Elcom for five years. Martin Bloch, President and CEO, said, "We are very excited to welcome the Elcom team to the Frequency family. We expect our combination will not only help Elcom grow in its own right, but also assist Frequency's growth in satellite payload systems". "Elcom will now be able to exploit its technical competence in expanded markets with major customers, many of which we share. Frequency's ruggedized clocks and its low-g and low phase noise technologies can be employed by Elcom for military end use. Frequency will utilize Elcom's ultra-high speed switching synthesizer technology and Ka-band microwave spectrum expertise in commercial and military satellite payloads. This expertise will help increase the value of our content per single satellite payload, currently under $10 million, to potentially over $25 million." Chief Financial Officer, Alan Miller, commented, "This acquisition was substantially an all cash transaction and included elimination of Elcom's outstanding debt. In recent years, Elcom has made substantial investments in product development, particularly for government electronic intelligence ("ELINT") systems". "Costs associated with these efforts have contributed to operating losses in prior periods and for the last full calendar year ended December 2011, during which Elcom recorded revenues of approximately $8.6 million. Going forward, Frequency's resources can better enable Elcom to realize benefits from these R&D investments. We anticipate Elcom will achieve increased sales and generate profits during our next fiscal year 2013 which begins May 1, 2012."