Amplitech Inc. has signed an asset purchase agreement to acquire Specialty Microwave Corp. (SMW), a privately held company based in Ronkonkoma, New York. In business for more than 30 years, SMW makes microwave components, subsystems and specialized electronics, providing services to some of the same customers as Amplitech. SMW operates in adjacent and upstream areas to Amplitech, using Amplitech components in some of its subsystems.
Amplitech will pay $2.05 million for SMW, including SMW’s facility, independently appraised for $1.2 million in 2014. SMW’s personnel will become employees of Amplitech.
Between 2015 and 2018, SMW generated average annual revenue of approximately $1.75 million and approximately $290,000 in operating profit. Amplitech expects the acquisition will double its 2018 revenue of $2.4 million on a run rate basis, within two to three months after the deal closes, expected by the end of July (2019).
The physical proximity of SMW to Amplitech will enable the production and engineering teams to merge with limited disruption and cost. Amplitech expects the combined team to develop new products that will generate additional revenue in the coming years. Amplitech has the opportunity to move up the value chain with its customers, with a portfolio of expanded products and solutions at higher average revenue and margin.
The acquisition includes all the business assets of SMW, including inventory, open orders, customers, fixed assets, intellectual property and the building where SMW has operated for over 30 years. Amplitech plans to relocate its operations to SMW’s facility as soon as the lease expires at its current location (620 Johnson Ave, in Bohemia, New York).
Both companies will exhibit at the International Microwave Symposium (#IMS2019) in Boston, June 2–7.