Ultra Electronics Agrees to Acquire Adaptive Materials for $23 Million

January 05, 2011 by Jeff Shepard

Ultra Electronics Holdings announced that it has acquired Adaptive Materials Inc. from its founders, Dr Aaron and Michelle Crumm for an initial cash consideration of $23.0 million. A further sum of up to $5.0 million will be payable if certain performance-based measures are achieved by 31 December 2013.

Adaptive Materials designs and manufactures portable power solutions in the 50 – 300W range. Adaptive Materials has developed Solid Oxide Fuel Cells (SOFCs) that run on propane and provide more power in less space than competing technologies. Propane is an inexpensive fuel source which is readily available globally, and can be easily sourced in all current operational areas. Propane fuel cells deliver nine times the energy density of conventional batteries. Its products are suitable for niche applications where the power requirements are too small for conventional generators and too large for batteries.

Applications in the defence market for the fuel cell technology developed by Adaptive Materials include:

– individual soldiers; to power the increasing range of soldier-borne electronic equipment

– Unmanned Air Vehicles and Unmanned Ground Vehicles; to increase endurance compared to batteries and provide near silent operation compared to internal combustion engines

– remote sensors; to enhance the life of unattended sensor systems

Customer confidence in the technology developed by Adaptive Materials has been demonstrated by the award in recent years of over $45 million of engineering funding from the US DoD and other research agencies. Adaptive Materials has a significant IP portfolio and is now preparing to enter volume production. It employs around 50 staff, including 15 engineers, operating from a facility in Ann Arbor, Michigan, USA.

The acquisition of Adaptive Materials will be financed using Ultra’s existing facilities and is expected to be earnings enhancing in 2011. Adaptive Materials will continue to operate from its existing facilities as a bolt-on acquisition, reporting to Phil Evans, Managing Director of Ultra’s Aircraft & Vehicle Systems division.