Echotek's sale called 'growth merger'
Mercury purchase for $49M won't cost jobs, CEO says
Thursday, July 14, 2005
Mercury Computer Systems Inc., headquartered in Chelmsford, Mass., has signed an agreement to buy Huntsville-based Echotek Corp. for about $49 million.
The purchase, subject to certain conditions, is expected to close in the third quarter this year.
Echotek, which was incorporated in 1987, makes high-speed, mixed-signal products used in radar, electronic test instruments, medical scanners and other data acquisition applications. The company's founders are Ralph Kimball, its chief executive officer, and Gary Turchetta, its vice president and chief financial officer.
Echotek has 45 employees, and Mercury has more than 750 employees worldwide.
"There are no layoffs" at either Echotek or Mercury, Kimball said. "Mercury has been growing at about 25 percent a year, and we expect to increase (the combined) staff gradually. We'll increase the staff here locally as well."
"This was a growth merger," not an attempt to reorganize, Kimball said.
In a prepared statement, he said, "Mercury is an ideal partner to address the future needs of our customers. We have been working with Mercury for several years and have a mutual understanding of what we have to do to be successful."
Joining with Mercury will give Echotek "a broader reach which will lead to new business opportunities," Kimball said.
Mercury provides digital signal and image processing computer systems, and its systems are used in state-of-the-art medical diagnostic imaging devices and in semiconductor imaging applications.
The $49 million purchase price will be payable in a combination of cash and shares of Mercury common stock, with stock representing about 10 percent of the total purchase price.
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