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Andrew to Leave Broadcasting; Spin Off Division to ERI

Andrew to Leave Broadcasting; Spin Off Division to ERI

Electronics Research Inc. plans to purchase the broadcast products division of Andrew Corp. Both companies have signed a letter of intent for the deal. ERI is conducting due diligence and the deal is expected to close in early November. Price and deal structure have not been disclosed.
Andrew Corporation’s Broadcast Products Division manufactures antenna systems for all broadcast applications; filters, combiners and RF components for television and FM radio; and rigid line and components.
Andrew will retain its Heliax air cable-manufacturing business and will be the main supplier of air cable to ERI. ERI will distribute the product for broadcast use while Andrew will distribute for non-broadcast use. Andrew retains the Heliax trademark.
After the deal closes, Andrew broadcast products would be manufactured by ERI, which is acquiring all the machinery and inventory, said Kinsley Jones, engineering and marketing manager for ERI.
“We have been expanding the range of our product lines for strategic reasons,” he said.
While most of the products ERI is acquiring are TV-related, two in particular are applicable to HD Radio: mask filters developed for HD Radio by Andrew and the Heliax transmission line.
ERI plans to temporarily lease Andrew’s Orland Park, Ill. facility while it transitions machinery and employees to ERI’s main manufacturing plant in Chandler, Ind., said Andrew spokeswoman Greta Brown.
Andrew’s Gray, Maine facility for the manufacture of filters and combiners is also part of this transaction.
Andrew has approximately 100 employees in its broadcast division: roughly 40 in Maine and 60 in Orland Park. ERI anticipates offering positions to 60% of those workers. ERI now has roughly 200 employees in Chandler.
Andrew Corporation also has a satellite communications business that is not affected by the proposed sale of assets of the broadcast products division.
Andrew merged in July with wireless telecommunications equipment supplier Allen Telecom. It could not break out how much of its income came from broadcast products, however its 2002 sales for all of its divisions combined were $1.4 billion, according to a company fact sheet.
As to why it’s leaving the broadcasting equipment business, spokeswoman Greta Brown said the company is focusing on businesses that are $100 million in size and first or second in their market in terms of sales.
“We’re hoping by selling to ERI we’re creating a better opportunity for the broadcast product line,” she said.
ERI will assume warranties for Andrew’s broadcast products. “We’re trying to make sure customers are not adversely impacted,” by the sale, said Jones.