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| TeleCommunication Systems Acquires Solvern Innovations, Inc. |
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| ANNAPOLIS, MD, Nov 03, 2009 (MARKETWIRE via COMTEX) -- TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS), a leading
provider of mission-critical wireless communications, today announced
the acquisition of privately-held Solvern Innovations, Inc., a
communications technology solutions company that specializes in cyber
security. Consideration for the purchase included cash,
approximately one million shares of TCS Class A common stock, and
contingent consideration based on the business's gross profit in 2010
and 2011.
Based in Baltimore County, Maryland, Solvern is a provider of comprehensive communications products and solutions, training, and technology services for the Department of Defense and the intelligence community. With more than 100 employees, Solvern provides support and training for multiple security-based platforms. The acquisition of Solvern extends TCS' core competency in secure network communications and encryption, which are integral to TCS' secure satcom and wireless carrier businesses. Post-acquisition operations will be reported as part of the TCS government segment's services category. Solvern's full year 2009 revenue, including the pre-acquisition part of the year, is expected to be about $18 million, with an expected fourth quarter revenue run rate of about $7 million and expected EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of about 12 to 15% of revenue. The acquisition is expected to be immediately accretive to TSYS earnings per share. The increased threats of web-based attacks, coupled with the US government's renewed focus on protecting online assets, indicate that cyber security will be a high growth communications technology area for the foreseeable future. According to the Office of Management and Budget, the Department of Homeland Security plans to increase the number of personnel dedicated to civilian cyber security by approximately 160% next year. Federal spending on cyber security for protection of both government and civilian communications is expected to grow from $9.2 billion in 2010 to $12.7 billion in 2014, and total $54 billion over the next 5 years. About Solvern Innovations Founded in 2003, Solvern Innovations is a communications technology solutions company specializing in cyber security training, and technology services for the Department of Defense and the intelligence community. Solvern works in partnership with the government, applying systems and engineering and advanced technology to address issues of critical national importance. Products and solutions include: project management, systems engineering, information assurance, program and business management, and enterprise modernization to address mission critical needs. About TeleCommunication Systems, Inc. TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) engineers and delivers highly reliable wireless communications technology. TCS is a leader in wireless text messaging and location-based technology, including E9-1-1 services and commercial applications like navigation that use the precise location of a wireless device, and secure satellite-based communications systems and services. Customers include leading wireless and VoIP carriers around the world, cable MSOs, automotive telematics vendors, and agencies of the U.S. Departments of Defense, State, and Homeland Security. TCS is one of six primary vendors on a $5 billion Army Worldwide Satellite Systems Contract vehicle. For more information, visit www.telecomsys.com. This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These statements are based upon TCS' current expectations and assumptions that are subject to a number of risks and uncertainties that would cause actual results to differ materially from those anticipated#, including those risk factors included in our filings with the Securities and Exchange Commission such as in our Annual Report of Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. The words, "believe," "expect," "intend," "anticipate," and variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Statements in this announcement that are forward-looking include, but are not limited to statements that (a) Solvern's full year 2009 revenue, including the pre-acquisition part of the year, is expected to be about $18 million, with an expected fourth quarter revenue run rate of about $7 million and expected EBITDA (Earnings Before Interest, Taxes Depreciation and Amortization) of about 12 to 15% of revenue, respectively, and (b) the acquisition is expected to be immediately accretive to TSYS earnings per share. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information in this press release, whether as a result of new information, future events or circumstances, or otherwise.
Company Contact: SOURCE: TeleCommunication Systems, Inc. |