Canadian Marconi Wants to Grow,
May Make Yet Another Acquisition

"The board wants to grow this company," said W. James Close, newly installed president of Canadian Marconi. He and his company's owners have big plans.

"GEC Marconi, which owns 51% of the company, wants to grow it, and the employees want to grow the company," Close said. "We plan on doubling the company within the next four years."

"Canadian Marconi has tremendous growth potential," Close said.

Canadian Marconi has been known as a very conservative company, Close said, serving mainly the high-end electronics market. It produces the CMA- 2102 High-Gain satcom antenna, of which it has shipped more than 750 shipsets since 1993. The company also makes the CMA-900 GPS-based FMS selected recently by AOM to equip its DC-10s. The CMA-900 is also installed on Boeing 707, 727, 737, DC-9, and MD-80 series aircraft, on the Airbus A300-B4, the Bombardier Dash 8, and the Gulfstream II, and is currently being certified on the DC-10 and EMB-110.

Canadian Marconi is also a major supplier to the U.S. Army for line-of-sight radio equipment.

Close said plans call for spending about $25 million on internal growth with additional spending planned to find and acquire additional companies.

"We have established an acquisition council to look at companies we may want to acquire. There may be more than one at a time," said Close. The company has an estimated C$250-300 million in the bank, he said.

Canadian Marconi recently purchased Novatel, a high technology GPS company selling to companies performing land surveys. Close plans to use the Novatel technology to make and certify a next-generation GPS capable of Category IIIB operations. Certification is expected by 2001.

"We have a toe-hold in the general aviation market with our earlier purchase of Northstar. Novatel had a market in land survey. A strategic decision we made is we want to broaden our line of GPS engines and extend GPS use but we will not get into low-cost, wide-application GPS," Close said. He ruled out ventures into GPS for automobiles or personal applications.

Close envisions cockpit upgrades and systems integration as a major growth field. The company recently got the nod to upgrade KLM's entire fleet of 747-200/300 aircraft to standards comparable to the all-digital 747-400. The aim was not to duplicate the -400 avionics but to give the crews the equivalent functionality of advanced FMS, EFIS, EICAS and laser inertial reference systems. The contract will install triple Canadian Marconi CMA-900 GPS/FMS with integrated, 12-channel GPS sensors, triple IRS, electronic instrument displays including EADIs and EHSIs, plus three center-console engine instrument displays.

Close said the 747 upgrade was an important contract but also important was the expertise gained in the newly established System Integration Laboratory. The SIL, located in Montreal, allows the company to create complex installations with critical interfaces and test them against possible eventualities-meaning less downtime and minimum certification flight testing.

"We have a good presence in the high-gain satcom antenna market," Close said. "We expect to expand into the medium-gain antenna market. We see live television broadcast to aircraft in flight as a future market although I can not talk much about that except to say we are positioning ourselves."

By John Wiley