| From the Publisher
By Roland Mangold Space Imaging Buys Pacific Meridian, ConAgra Acquires Emerge Two recent acquisitions in this industry that would be perceived as causing barely a ripple on the global economic waters, could conceivably create a tidal wave in the GeoTechnologies. Just when it seemed that the mergers and acquisitions (M&A) activity in this industry was abating - the exceptions being 3DI's spate of acquisitions late last year, and more recently, AGRA Baymont's acquisition of Geonex - the proverbial "other shoe" has dropped.
Two announcements made within the same week in March portend to have far-reaching implications for the GeoTechnologies. Space Imaging agreed to acquire Pacific Meridian Resources, and ConAgra inked a deal to buy Emerge from Litton.
The acquisition will enable Space Imaging to significantly expand its offerings of value-added, visual Earth information products to its customers and increase Pacific Meridian's product offerings in a number of vertical market areas. The agreement was signed March 14, 2000, and terms were not disclosed.
"Pacific Meridian Resources will provide tremendous value toward developing visual information products to meet our customers' needs," said John Copple, Space Imaging's chairman and chief executive officer. "Pacific Meridian Resources will help us expand our capabilities in product applications, analysis, and decision support systems."
"This merger is a natural fit for both our companies," said Kass Green who will remain president of the wholly owned subsidiary, Pacific Meridian Resources, and lead the expansion of the Space Imaging value-added business. "Our experience in image classification, applications development, and Web technology will allow Space Imaging to offer complete, end-to-end information solutions. Pacific Meridian will gain access to new markets and resources, and will continue to serve its existing clients."
Space Imaging's motives to acquire Pacific Meridian are obvious. They need to build market share, gain access to vertical markets, and establish a revenue stream. And their shopping spree is not over yet. Word on the street is that Space Imaging will make at least one, possibly two, additional acquisitions of considerably larger fish than Pacific Meridian. This time the targets will probably be in the $20 million revenue category, which eliminates 95 percent of the companies in this industry as possible candidates. More than likely, their next acquisition will be one of the handful of large photogrammetry/aerial photography/mapping firms.
ConAgra Inc.'s announcement to purchase the Emerge business of Litton Industries Inc., located in Billerica, Mass comes as much more of a surprise than does the Space Imaging action. Emerge provides a fleet of airplanes that are deployed across the United States collecting aerial digital color and color infrared imagery for agricultural and land-use applications. In 1996, Emerge began as a project with an agricultural focus and, in 1998, became a business unit within Litton's TASC division. All Emerge software systems and support, including its employees, are being transferred to ConAgra. Terms of the sale were not disclosed, but rumor has it that the sale price is about $8.5 million.
"Bringing Emerge into ConAgra makes sense," said Bruce Rohde, ConAgra chairman and chief executive officer. "It gives us a key resource to expand our agricultural e-commerce platform and will greatly complement mPOWER3, our unique, Internet-based agricultural information system."
ConAgra's United Agri Products (UAP) group, a leading distributor of seeds, fertilizer products and crop protection chemicals, developed mPOWER3, an Internet-based information systems program designed to help growers use technology to increase production and better manage their land. Emerge's aerial-collections expertise will provide ConAgra with additional tools to help growers with yield and fertilizer crop mapping developed through land-use imagery.
"The sale of Emerge to ConAgra is fully consistent with Litton's strategy of building shareholder value by divesting our non-core assets and focusing on our primary businesses," said Harry Halamandaris, Litton executive vice president and chief operating officer (Electronics and Information Systems). "Through its affiliation with ConAgra, Emerge will be better able to achieve its full growth potential."
The big question is, what are ConAgra's intentions? Will Emerge become a proprietary source of aerial data for ConAgra's agricultural e-commerce and information services? Or will ConAgra allow Emerge to compete as a source of color and color infrared imagery in the geospatial information industry?
Many sources close to Emerge admit that ConAgra obviously recognizes the benefits Emerge has to the agricultural community, but understands little or nothing about its myriad other applications. One thing is certain. If ConAgra does recognize the benefits of Emerge's broader applications, with ConAgra as its corporate parent, Emerge could compete very effectively as a major supplier of Earth information imagery to the multi-billion dollar Geospatial applications markets. Until next time, Cheers!
Roland Mangold
Publisher, EOM
E-mail: [email protected] Back |
