Amplitech, a developer of custom and standard state-of-the-art RF components for the Commercial, SATCOM, Space, and Military markets has signed an asset purchase agreement to acquire the business assets of Specialty Microwave Corp. (SMW), a privately held company based in Ronkonkoma NY. The purchase will include all business assets of SMW, including all inventory, open orders, customers, fixed assets, intellectual property and the building at which SMW has operated for over 30 years. The assets will also include all personnel currently employed at SMW.
Amplitech will acquire Specialty Microwave Corp. for a total of $2.05 Million. The real estate (premises) of SMW alone was independently appraised at a value of $1.2 Million in 2014.
SMW has been in business for over 30 years and makes microwave components, subsystems, and specialized electronics, and provide services to some of the same customers as Amplitech.
SMW operates in adjacent and upstream areas to Amplitech and utilizes their components in some of its subsystems. As they also share some common customers, the transaction should also offer Amplitech the opportunity to move up the value chain with its customers by offering expanded products and solutions at higher average transaction values and margins. The physical proximity of SMW to Amplitech also allows a merger of the production/engineering teams to occur with limited disruption and cost to Amplitech, and Amplitech expects to relocate its operations to SMW’s facilities as soon as its lease expires at 620 Johnson Ave, Bohemia, NY. The combination is also expected to allow Amplitech to utilize both teams to develop new products that could generate additional revenue in the coming years.
Between 2015-2018, SMW generated average annual revenue of approximately $1.75 million in sales and about $290 thousand in operating profit, and Amplitech expects that the acquisition should result in a doubling of its 2018 revenue of $2.4 million on a run rate basis within 2-3 months of closing the acquisition. The transaction is expected to close by the end of July 2019.