AAI Corp. expands with ACL Technologies acquisition

January 18, 1992|By Jon Morgan

AAI Corp., trying to lessen its reliance on federal contracts, has made its second acquisition in six months aimed at beefing up its commercial business.

The Hunt Valley-based company on Thursday acquired ACL Technologies Inc. of Santa Ana, Calif., a leader in the design and manufacture of hydraulic testing systems.

ACL is now a wholly owned subsidiary known as AAI/ACL Technologies. The new unit's headquarters will remain in California, but a new president will be appointed by AAI.

"This is a significant opportunity for us," said Paul J. Michaud, vice president of finance for AAI, which is a subsidiary of United Industrial Corp. of New York.

Much of ACL's work is for the commercial aviation industry, in contrast to AAI's Defense Department work, Mr. Michaud said. With this acquisition, and the purchase last June of Microflite Simulation International Corp., AAI's dependence upon federal work should fall from 90 percent of revenues to less than 70 percent in the next three to five years, he said.

Microflite, based in Binghamton, N.Y., is a manufacturer of flight simulators used to train commercial pilots. AAI produces similar devices for military planes.

"What they are trying to do is get into related fields," said Denis Moran, an analyst with A. G. Edwards in St. Louis. "It's the right thing and the right direction for them."

ACL was founded in 1954 as Auto Controls Laboratories and was, until its sale, closely held by its founders.

Mr. Michaud declined to provide details of the transaction, other than to say AAI paid cash up front, assumed liabilities of ACL, and will make continuing payments to ACL's former owners based upon the profitability of the unit.

ACL has 150 employees, all in California except for some in field offices around the country. AAI employs 2,400 nationwide, about 1,600 of them in Maryland.

The acquisition should not affect employment in either area, although ACL could expand if new business develops, he said.

Mr. Michaud would not disclose recent financial results of ACL other than to say the company generates about $20 million a year in revenues, compared with about $200 million for AAI. ACL lost money last year, for only the second time in its history, due largely to some underbid contracts, Mr. Michaud said.

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