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Marport acquires defence sonar company C-Tech

Posted on 07.08.2009 - 11:00 EDT in GENERAL NEWS by Rons_ROV_Links

Marport acquires defence sonar company C-TechMarport Canada Inc. today announced the completion of its acquisition of C-Tech Ltd., a leading supplier of advanced sonars for underwater defence, including anti-submarine warfare, mine countermeasures and harbour surveillance.

The combination creates a sonar powerhouse by combining Marport's technology leadership in Software Defined Sonar technology with C-Tech's strengths in Omni Sonar system design and manufacturing. The result is a formidable sonar technology company, determined to drive innovation for its customers. Marport will move beyond current product configurations to integrated platforms that address the growing need for reconfigurable embedded sonar systems for underwater defence.

The acquisition positions Marport as Canada's largest underwater acoustics technology company, with over 110 employees delivering a diverse range of subsea sensing, surveillance and communications products for commercial fisheries, underwater defence, offshore energy and ocean science. The combination creates an entity with the scale and resources to deliver industry-leading products in the rapidly emerging market for network-centric Undersea Domain Awareness.

"Today marks the beginning of an exciting new era and is a significant step forward in our objective to increase market share in the multi-billion dollar military sonar industry," said Karl Kenny, President and CEO of Marport. "We are aggressively pursuing new opportunities across multiple market sectors. The addition of C-Tech's employees, customers and technologies will enable us to accelerate access to the underwater defence market, enhance efficiencies, and increase our growth strategy momentum."

To ensure smooth transition Marport will begin immediately the planned integration of the two companies' products, customers and employees to ensure a smooth transition that will deliver immediate value for customers, partners and investors. Over the next several months, Marport will transfer assembly and testing of its existing product line to C-Tech's ISO-9001 compliant engineering and manufacturing facility in Cornwall, Ontario.

With this acquisition, C-Tech Ltd. becomes a wholly owned subsidiary of Marport that will be renamed Marport C-Tech Ltd. Mr. Dennis Derouin will continue as President of Marport C-Tech Ltd. and is also appointed VP, Corporate with integration responsibilities into the parent company.

"While we anticipate the integration team will identify additional opportunities for increased operational efficiencies and cost savings, the primary motivation is to continue to expand and grow our business into new products and platforms", said Derouin. "We expect that the organisations will be fully integrated by year-end. Customers will benefit from the breadth and depth of our solutions and our commitment to unsurpassed quality. With the resources of our combined R&D capabilities and existing world-class technologies, we have an opportunity to truly redefine sonar technology in both underwater defence and a variety of other markets."

"We have tremendous respect for C-Tech's many accomplishments. The founders, shareholders, management and employees of both Marport and C-Tech are passionate about underwater acoustic technologies," said Karl Kenny. "Our combined teams will be a powerful force in the innovation of cutting-edge sonar platforms for subsea intelligence, surveillance and reconnaissance. The integration of Marport's advanced Software Defined Sonar technology with C-Tech's expertise in Omni Sonar® systems will bring this vision to life via an industry-defining sonar technology for Undersea Domain Awareness applications."

No maritime nation can afford to lose control of its territorial waters to hostile powers. From the undersea environment, submarines and other underwater threats can strike with impunity if they are not located and challenged. As the importance of blue-water operations decline, the significance of coastal, littoral operations is expected to rise.

Marport believes these trends will drive steady growth in the underwater defence market, notably in systems that prevent attack or serve as a deterrent. As such, revenues in underwater defence systems should continue to grow as newer, expanding threats in the undersea environment become increasingly prominent. In particular, the threat of stealthy submarines, sea mines and underwater improvised explosive devices (IEDs), potentially deployed by terrorist networks in ports, estuaries and inland waterways, requires new systems optimised to counteract such threats.


C-Tech was founded in 1969, and in the forty years since, has evolved into a world leader in the design, development and manufacturing of sonar systems for the Canadian Navy, major defence contractors and other foreign naval customers. All anti-submarine and mine countermeasure sonars deployed in the current Canadian Navy fleet were manufactured at C-Tech's facilities in Cornwall, Ontario.

The staff consists of professional, technical, manufacturing and support personnel with a broad range of experience in underwater acoustics, engineering, software development and manufacturing. C-Tech has the capability to design, develop and manufacture complete end-user equipment and systems, meeting and exceeding customer requirements in the areas of electro-acoustic performance, mechanical design, long-term corrosion resistance, pressure housings, and long-life power sources.

C-Tech was a pioneer in the development of sonars for the commercial fishing industry, including the world's first Omni microprocessor controlled colour sonar. The Company focused on the underwater defence sector in the early 1980's and now specializes in sonars designed for shallow waters and the difficult littoral environment. In addition to the Canadian Navy, naval customers include the US Navy, Royal Danish Navy, Royal Swedish Navy, Royal Australian Navy, South Korean Navy, Belgian Navy, Hellenic Navy, Portuguese Navy, Bangladesh Navy and others. Some recent contracts include:

• the design and manufacture of hull mounted and variable depth sonars for the Royal Swedish Navy's Visby class corvettes;
• the evaluation of sonar for Arctic applications, and
• sonar modules for Canada's new CH-148 maritime helicopter project.

Marport C-Tech is located in a 38,000sq-ft. engineering and manufacturing facility in Cornwall, Ontario. The facility is cleared to Secret Level 2 through the Department of National Defence, and is capable of performing classified efforts for the government or as a subcontractor to other cleared entities. It is also certified compliant to ISO-9001 and includes electronic, software, mechanical and acoustic design, manufacturing and test capabilities for a wide range of underwater applications. Testing facilities include hydrostatic pressure testing, vibration, temperature and onsite acoustic test tanks. Comprehensive acoustic testing is conducted at a company owned Underwater Acoustic Test Facility located in an off-site area remote from environmental noise and providing acoustically quiet and stable water.

The transaction was unanimously approved by the Board of Directors of each company. Marport expects that the transaction will be accretive to earnings in 2009, and meaningfully accretive in 2010, based upon plans to deliver additional military sonar systems. The acquisition was financed by an equity investment from Marport shareholders with additional financing provided by the Royal Bank of Canada. Marport will maintain its existing design, engineering and sales centers in Canada, France, Iceland, Spain and the United States. Financial details of the transaction were not disclosed.

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