Harris buying Schlumberger unit

Nov. 8, 2010 at 10:30 AM
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MELBOURNE, Fla., Nov. 8 (UPI) -- Harris Corp. has entered into a definitive agreement to acquire the Global Connectivity Services business from Schlumberger Information Solutions.

Harris said the acquisition of GCS will significantly extend its capabilities as a global provider of mission-critical, end-to-end managed satellite communications services for customers operating in remote and harsh environments -- including the energy, government and maritime industries.

Schlumberger GCS will be combined with recently acquired CapRock Communications to form Harris CapRock Communications.

With customers in more than 50 countries, Schlumberger GCS provides global communication services for a wide range of customers primarily in the oil and gas industries.

"Combining Schlumberger GCS with CapRock Communications will create an organization with unsurpassed global satellite network capabilities, broad service offerings and a large experienced service team to provide customers with superior remote and in-the-field support," said Howard L. Lance, chairman, president and chief executive officer of Harris. "Harris CapRock Communications will be able to use its capabilities and expertise to offer customers the most secure, reliable and efficient solutions in the industry."

Under the terms of the agreement, Harris will purchase the Schlumberger GCS business for $397.5 million in cash, subject to post-closing adjustments. The goodwill arising on completion of the acquisition will be an allowable tax expense with an estimated net present value of $50 million, resulting in an effective purchase price of $347.5 million.

The transaction is subject to customary regulatory reviews and closing conditions and it is expected to close during the third quarter of fiscal 2011.

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