S3 purchase deal means firm will stay in Columbia Simulator company employs 300

August 10, 1993|By James M. Coram | James M. Coram,Staff Writer

Howard County officials were celebrating yesterday the success of their plans to keep Columbia-based S3 Technologies and its 300 employees.

They had feared that Simulation, Systems and Services Technology Co., as S3 Technologies is officially known, would be sold to a foreign investor and moved abroad.

Instead, the contract buyer, ManTech International Corp. of Fairfax, Va., plans to keep S3 Technologies in Columbia and operate it as wholly owned subsidiary once it purchases the company Aug. 31, said Michael J. Cromwell III, executive vice president of ManTech.

ManTech, a 25-year-old privately

held company that supplies defense, aerospace, environmental and intelligence technology to federal agencies, signed a purchase agreement July 29.

The agreement calls for ManTech to buy all of S3 Technologies' stock from BiCoastal Corp. of Tampa, Fla. BiCoastal had filed for bankruptcy. Mr. Cromwell declined to reveal the purchase price.

Although S3 Technologies' sales have fallen since 1991, when the nuclear power simulator company was making $50 million a year, it is still profitable, with sales in the $36 million range in 1992, Mr. Cromwell said.

ManTech was looking to expand into a commercial market internationally and S3 Technologies was an ideal instrument, Mr. Cromwell said. "It is a world leader in utility simulation in Germany, Taiwan, Korea and Russia," he said, areas where Man

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Tech already has a foothold.

"Technically, what S3 does is first cousin to a number of things that we do in the simulator area," he said. "We have desk-top simulators for the Navy, flight simulators for the Air Force and NASA and strong software training. It is a direct plug-in."

William H. Howard Jr. thought the same thing when he took over as county economic development director six months ago. A former banking executive, Mr. Howard is good friends with John Moore, chief financial officer at ManTech.

ManTech "is a small version of Westinghouse," Mr. Howard said. "They were looking to add a commercial line. I had visited ManTech and told John they were a duplicate of the S3 facility."

The potential merger was "a pleasant surprise," Mr. Cromwell said. S3 Technologies "is a technological powerhouse of a resource. We expect to invest, to accelerate what we have into new market places."

S3 Technologies is a world leader in nuclear power plant simulation. More than half of U.S. simulators were made by S3. The company has also captured 61 percent of the overseas market.

Concerns about the balance of trade and the safety of nuclear power plants abroad make the international market place "a real growth opportunity" for S3 Technologies and

ManTech, Mr. Cromwell said. "The future is excellent on a number of fronts."

Mr. Cromwell said it would be premature to comment on what S3 will look like after the merger until Bill Kuhlmann, the new manager, takes command.

"Employees have been living under a cloud for four years, making it very hard for them," Mr. Cromwell said. "Customers were very concerned about vendor stability and frankly, it caused S3 to lose some good people."

Workers at the Columbia office learned about the merger last week.

"We're all very positive about the move," said Richard Libra. "We've been in Chapter 11 for a long time."

"It's a positive direction," said Dr. Abdollah Abtahi. "We're looking forward to becoming part of the ManTech family. Overall, it's very uplifting to become part of a larger

company."

Short term, the merger will mean keeping 300 jobs in Howard County, Mr. Howard said. "Long term, it underscores the county's commitment to high tech and hopefully a move of a company headquarters here."

The merger is also a boon from a policy standpoint, he said. "[County Executive Charles I. Ecker] says we not only want to bring people to Howard County, but once here we don't forget about them. We certainly haven't forgotten about a marquee name like S3, and we won't forget about others either, regardless of size."

ManTech employs 3,000 people worldwide and did about $200 million worth of business last year. The company has about 700 employees in Maryland -- 250 in Howard County -- and did about $50 million in business in the state last year, Mr. Cromwell said.

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