Nurad is acquired by Mass. company Microwave antenna maker says deal will hasten growth

Chelton shifts work to city

Manufacturing

January 20, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Nurad Technologies Inc., the Baltimore microwave antenna manufacturer that moved into the Park Circle plant vacated by London Fog, has been sold to Chelton Communications Systems Inc. of Massachusetts, the companies said yesterday.

Tony Barnard, Nurad's president, said the deal will give the company badly needed capital and help it compete for a wider range of projects.

He said Nurad, which employs about 70 people, will probably reach 100 workers by 2000 -- a year earlier than it would have without a large partner. The deal also improves Nurad's prospects of boosting sales from about $7.2 million to $20 million by 2001, he said.

"Nobody here except for me and maybe the controller is even going to notice the difference, other than that we're going to grow faster," Barnard said.

Chelton Communications Systems Inc. is a Bolton, Mass.-based subsidiary of Cobham PLC, a United Kingdom manufacturer of aerospace and electronics components. Chelton's other companies are Atlantic Microwave in Bolton, Kevlin Corp. in Wilmington, Mass., and Continental Microwave and Tool Co. in Hampton, N.H. Neither Chelton nor Nurad officials would disclose the purchase price. Cobham valued the deal at $5.6 million in a statement. The company valued Nurad's assets at about $2.8 million and its annual profit at $900,000.

David Gaggin, president and chief executive of Chelton, said he was attracted to privately held Nurad because of its aerial electronic warfare microwave antenna and its radomes -- or protective covers for antennas.

"They had very little overlap with" Chelton's other companies, he said. "We don't buy and sell companies. We buy companies and grow them."

Nurad has historically competed for military business, but is trying to boost sales for wireless cable systems and cellular communications. "The only way to get the money we need to grow is to join another organization," Barnard said.

Barnard, who will continue as Nurad's president, said Chelton has already shifted a missile antenna product line to Baltimore. "There are others that they are going to give us as well," he said.

He also said the acquisition will give Nurad money to capture commercial customers. "The big expense for the commercial side of the business is tooling," he said. "They told me, 'You've got deep pockets but you still have to justify it.' "

Founded in 1965 by J. Gordon Neuberth, Nurad made antenna systems for military aircraft and mobile television news trucks. With a flush U.S. defense budget, Nurad sales topped $13 million in the late 1980s, when it employed about 300 people. But defense cutbacks were devastating, sending sales plummeting to $3 million and employment to just 40 in 1994.

Barnard, an Air Force Academy graduate, bought the company in 1992 from Virginia-based Carlton Industries in a management-led leveraged buyout.

The company, housed for years in an old two-building plant on Druid Park Drive in Northwest Baltimore, started looking for a new building last year.

Barnard had all but signed a deal to move the company to Halethorpe when he came upon the nearby London Fog plant in the Park Circle Industrial Park. With few barriers, the building offered 54,000 square feet of mostly open space -- 2,000 more than the Druid Park Drive plant -- and room to expand.

London Fog Industries Inc. moved out in June, eliminating 281 jobs. Nurad struck its deal for the $3.4 million plant in August and set up in November. The company will finish out London Fog's roughly $17,000-a-month lease, which expires June 30, 1999.

Under a lease with the city containing similar terms, Nurad will continue to occupy the building for five more years. The company will have the option to renew the lease in 2004 and again in 2009, with increases in lease payments limited to 3 percent.

Nurad could buy the plant in 2007 for $983,818, or for a declining price over the next five years. Nurad, which spent about $1.5 million on equipment for the new plant, will likely buy the building.

Gaggin, the Chelton president and chief executive, said the building was part of the attraction. "In most of the facilities we have, we can't grow anymore," he said. "Here is a company that can double and maybe even triple in size and still stay down there. If Tony [Barnard] hadn't moved to that facility, we probably wouldn't have bought them."

Pub Date: 1/20/98

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