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SpatialNews Press Release
Leica Geosystems launches GIS initiative with
acquisitions of ERDAS, Inc. and LH Systems
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Leica Geosystems announced today the signing
of two acquisition agreements. The Company will
acquire 100% of the shares of ERDAS, Inc., a
pioneer and the market leader in remote sensing
software. Simultaneously, Leica Geosystems will
acquire the remaining 50% of the outstanding
shares of LH Systems, a pioneer and one of the
leaders in aerial photography, remote sensing,
and photogrammetry, from its Joint Venture
partner BAE Systems. ERDAS and LH Systems,
both headquartered in the United States, will
form the core of Leica Geosystems’ new GIS and
Mapping Division and provide a platform for
growth in the attractive Geographic Information
System (GIS) and Remote Sensing (RS) market
segments. With the completion of these two
acquisitions, Leica Geosystems will provide the
most comprehensive spectrum of technologies
and solutions for integrated spatial measurement,
remote sensing and mapping with Geographic
Information Systems world-wide. Leica
Geosystems will acquire ERDAS Inc. for
approximately US$ 30 million in cash plus
registered shares of the Company. The
acquisition of LH Systems will be concluded at a
price of US$ 15 million and will be an all-cash
transaction.
Once these acquisitions are completed, Leica
Geosystems will not only be able to offer the most
comprehensive world-wide program of surveying
technology sensors from a terrestrial platform (TPS
Tacheometers, GPS Global Positioning Systems,
CYRAX 3D laser scanning), it will also be one of the
leaders in acquiring remote sensing data from
satellites and aerial photographs from aeroplanes.
Leica Geosystems’ offering is unique as its
customers will be able to select the surveying,
remote sensing and data capturing techniques best
suited for the required task. Modern GIS projects for
city and regional planning — such as the
internationally-awarded spatial database of
North-Sydney, for example — may have been cost
prohibitive without a combination of all these data
acquisition methods from the earth, the sky and from
space. Additionally, Leica Geosystems customers
can now create and maintain very up-to-date digital
maps and 3D virtual reality models for use in critical
decision making.
Leica Geosystems CEO Hans Hess: "Individually,
these two companies bring significant benefits to our
company. Through the combination of the two,
however, even more synergies should materialise.
The fusion of these companies brings together the
broadest array of image-based data acquisition and
visualisation tools in the industry. We have created
our new GIS and Mapping Division to leverage these
synergies along with terrestrial based GPS/GIS data
acquisition and to launch Leica Geosystems into
these rapidly growing markets of GIS and of Remote
Sensing. The combined GIS and Remote Sensing
markets are expected to experience significant
growth rates through to 2005. Leica Geosystems will
be well positioned to capitalise on this tremendous
opportunity."
Fast realisation of Leica Geosystems‘ growth
strategy
As a result of the rapid implementation of Leica
Geosystems‘ growth strategy into reality, the
traditional Swiss Surveying-Technology company
has, within a few months, become one of the most
comprehensive suppliers of solutions in the
acquisition, visualisation and modelling of spatial
data for numerous applications. With the successful
integration of Laser Alignment Inc. and Cyra
Technologies Inc. earlier this year, new potential
growth opportunities employing the most modern
technologies in terrestrial surveying have developed.
ERDAS and LH Systems represent further
opportunities in the remote sensing and
photogrammetry markets through the collection of
data via aerial means.
CEO Hans Hess: "Our strategic objective of
becoming the most comprehensive supplier of
modern digital spatial measuring and GIS products
is now — only nine months after going public —
already realised. This gives us a pilot position in
Geomatics and allows us to lead the creation of
Digital Earth Information Systems (DEIS) by fusing
together high precision survey data and mass-data
handling technologies. We are creating a seamless
data-flow into and out of the large database software
of ESRI (Environmental Systems Research Institute)
and other GIS data management systems suppliers,
allowing our customers to be at the forefront in these
growing business areas."
Excellent Position for Growth in many GIS and
Remote Sensing Market Segments
"ERDAS and LH Systems provide very attractive
growth platforms in the emerging GIS and Remote
Sensing market segments", stated Bob Morris,
President of Leica Geosystems’ GIS and Mapping
Division. "We believe there is a significant market
opportunity resulting from the convergence of various
digital technologies. This convergence enables a
coherent, end-to-end solution for the mass capturing,
editing and 3-D visualisation of spatial data. When
these acquisitions are completed, we will be able to
offer a comprehensive range of spatial data capturing
and processing solutions to a wide spectrum of
customers. Our targeted customers range from
professional photogrammetrists and mapping
agencies, to more occasional GIS users in
segments like utility and telecommunications
companies, local communities, land registration
authorities, environmental institutions, and forestry
services, just to name a few. Our products and
solutions will allow our customers to obtain very
accurate and up-to-date digital maps and spatial
virtual reality models for use in their business or
governmental activities," said Morris.
In order to fully realise the synergies between these
two companies, Leica Geosystems plans to
integrate ERDAS and LH Systems as part of the
Leica Geosystems family, and under the umbrella of
the new GIS and Mapping Division, while retaining
and leveraging their individual identities and market
presence. Bob Morris explains: "It is our clear
intention to provide the necessary entrepreneurial
freedom for these dynamic enterprises to continue
their successful history of product innovation in the
GIS, Remote Sensing and Photogrammetric
markets, and to make the most of their trusted brand
identities. In addition we want to achieve synergies
between all three companies as appropriate. We
value the continuing leadership of the current
management teams, and believe that together with
Leica Geosystems, the combined entities can fully
capitalise on the tremendous opportunities within the
GIS and Remote Sensing arenas."
Complementary Relationships
Leica Geosystems has already strengthened its
position in the GIS, Remote Sensing and related
markets through several strategic partnerships. The
company’s relationship with industry leader ESRI
and its recent investments in AED Graphics (Central
European market) and NovaLIS (North American
market) have provided an opportunity to enter the
field of Cadastral and Land Information Solutions
(LIS). These strategic relationships, coupled with
Leica Geosystems’ core competency in data
acquisition technology, clearly establish the
framework for market leadership.
Great opportunities for ERDAS and LH Systems
Lawrie E. Jordan, III, ERDAS President, welcomes
this new partnership and the opportunities it
provides: "The excellent position of Leica
Geosystems in all fields of data acquisition,
combined with the Company’s world-wide sales and
services network, makes Leica Geosystems our
ideal partner. We are confident that the experience
and reputation of Leica Geosystems will drive the
further development and growth of our already strong
customer base."
Bruce Wald, President of LH Systems, said: "Leica
Geosystems is now in a position to offer our
customers a comprehensive range of spatial data
gathering, visualisation and modelling products and
technologies, be it through terrestrial surveying
products, remote sensing or GIS products and
technologies. The company is becoming a
powerhouse of new technologies."
Financial details of the acquisitions
"Through their focussed investments in new product
development and strong market leadership positions,
ERDAS and LH Systems have experienced
excellent growth over the past several years.
Furthermore, this top-line growth has led to healthy
profit development and helped produce solid cash
flow. We expect this trend to continue, and
accordingly, once consolidated, expect both
companies to make an immediate positive
contribution to our profitability – before and after
Goodwill amortisation. Although we have not
finalised our results for FY01, we confirm our earlier
indications of 15% sales growth, and EBITDA growth
in the range of 25%, and expect our current positive
sales and earnings growth to continue in to the new
Fiscal Year 2002. The expected contributions from
ERDAS and LH Systems should accelerate our
top-line growth and bring solid profits to our new GIS
and Mapping Division," stated Christian Leu,
Vice-President and CFO. "The transactions, which
we expect to close in mid-May of this year, will be
financed through a combination of cash and shares.
Specifically, under the terms of the ERDAS
transaction, shareholders of ERDAS, Inc. will receive
US$29.45m in cash (CHF 50 m @ USD/CHF1.70)
and 62,762 shares of Leica Geosystems. Under the
terms of the agreement, shareholders of ERDAS will
be subject to certain lock-up provisions on shares
received through the acquisition. With respect to the
LH Systems transaction, the selling shareholder of
LH Systems, BAE Systems, will receive US$15m
(CHF 25.5 m @ USD/CHF1.70) in cash," said
Christian Leu. Leica Geosystems plans to issue the
additional shares from its existing authorised capital
(whereby the pre-emptive rights of the current
shareholders shall be withdrawn in accordance with
the articles of Leica Geosystems) and finance the
cash portion of the transactions through its various
credit facilities. Under the terms of the agreements,
ERDAS, Inc. and LH Systems will become wholly
owned subsidiaries of Leica Geosystems.
ERDAS — the world’s leading Earth Resource
Data Analysis Systems Company
Based in Atlanta, Georgia, US, ERDAS, Inc. is a
pioneer and leader in remote sensing software, with
a significant share of the global market. The current
executive team, Lawrie Jordan and Bruce Rado, who
pioneered the first PC-based image processing
system, founded the company in a converted garage
23 years ago. It was the beginning of Earth
Resource Data Analysis Systems, ERDAS, as it is
known today.
ERDAS and its 140 employees offer a suite of
software used to produce image-based maps for a
variety of customers and applications. The software
is based on modern technologies and is used on
ESRI’s ArcInfo V8 platform, the same platform that
Leica Geosystems uses for its current GIS and
surveying products. Corporate and International
headquarters are in Atlanta, with several US sales
offices, five training centres, a subsidiary office in
Cambridge, UK, and a network of over sixty
distributors. Markets served are: Agriculture,
Business/Marketing, Cadastral, Cartography,
Defence/Military, Electric, Emergency,
Environmental Engineering, Environmental Planning,
Forestry, Land Use, Gas/Oil/Mineral Exploitation,
Oceanography, Meteorology, Photogrammetry,
Surveying, Pipeline, R&D Educational,
Telecommunications, Transportation, Water
Resources, Water/Waste.
During 2000, ERDAS recorded revenues of US$23.5
million, and generated an operating profit of more
than US$3 million.
Further Information at: http://www.ERDAS.com
LH Systems – Pioneer in Aerial Photography
and Photogrammetry
LH Systems is a pioneer and leader in its markets of
aerial photography and sensing, and
photogrammetry. Based in San Diego, California,
and with various subsidiaries around the globe, LH
Systems offers a product line of aerial cameras, and
has recently introduced the first digital airborne
sensor as the result of a project together with the
German research centre of Deutsche Luft- und
Raumfahrt. Over the past ten years, LH Systems
has migrated from a distributor of analogue/analytical
photogrammetric equipment (manufactured by Leica
Geosystems) to a distributor of digital
photogrammetric software. LH Systems has been a
joint-venture company of Leica Geosystems and
Helava/General Dynamics — now BAE Systems —
from whom Leica Geosystems is acquiring the
remaining shares. LH Systems has a highly qualified
staff of 135 employees, working at San Diego and
Heerbrugg and in the sales units. For the year 2000,
LH Systems achieved revenues of US$35 million,
with operating profits of US$5 million.
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