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TADIRAN RACOM’S NEW EUROPEAN HF RADIO BY SUMMER

TADIRAN RACOM’S NEW EUROPEAN HF RADIO BY SUMMER
By Adam Baddeley, Deputy Editor, BATTLESPACE

09 Dec 03. The sale of a 75% stake in RACOMS; the Ulm based EADS military communications business unit to Tadiran communications in a Euro18million deal is aimed at providing a five fold boost in European sales to the Israeli company, according to Hezi Hermoni, its President and Chief Executive Officer talking to Battlespace. EADS will retain a 25% stake under the arrangement announced on 18th November.

Hermoni explained that RACOMS concentrates mainly on European and NATO protocols, modems and interfaces that relate to HF radios rather than the radio itself. This expertise represents the main technical advantage to Tadiran from the acquisition. He added, “Tadiran on the other hand concentrates on the RF portion of the radio.” Tadiran’s strategy is to bring together these two competencies to develop an HF radio for the NATO market with Tadiran shipping the RF portion to RACOMS in Ulm for completion and integration with the modem, interface and protocols. “By doing that, in a very short time we will be able to launch a European HF radio with many advantages over the other radios we have seen.” This is expected to be ready no later than Eurosatory in June 2004.

RACOMS is participating in the Franco German Euroradio join venture, developing the Multi Mode Radio software defined radio for France and Germany. Tadiran will not play a part in this, not least because this work is now drawing to a close.

Hermoni said, “Tadiran is deeply involved in Software defined radios through what we are doing with the Israeli MoD. We will take this know how and make it a baseline for our activities in Europe. Later on it will be RACOMS role to take up these capabilities and develop proposals for European customers.”

RACOMS will lead Tadiran’s activities throughout those countries not already covered by pre-existing agreements. Hermoni cited Tadiran’s relationship with Denmark’s Terma who are teamed with the Israeli company in all areas of communications, excluding HF in several countries including Scandinavia and the Netherlands.

The agreement has yet to be studied by Germany’s cartel authorities. Hermoni said, “I believe it will take no more than a few weeks. I very much hope before the end of December.”

The initial interest in the acquisition was identified at the Paris Air Show in June this year during a scheduled meeting between Tadrian and EADS to discuss each others technical capabilities and potential co-operation.

Hermoni explained that each company’s activity was complimentary to the other. “Tadiran’s main expertise is in ground forces, RACOMS is ground to air. RACOMS also has a strong presence in naval communications. That is an area that Tadiran is not currently present. There are specific technical capabilities, not just marketing opportunities that benefit the other company.”

RACOMS structure means that there is little duplication of effort with Tadiran communications. “In RACOMS we only bought engineering and development capabilities rather than manufacturing. RACOMS does its manufacturing through subcontractors so the company does not have the overhead of manufacturing. That makes it easier to combine the capabilities of Tadiran in Israel and the US.” He added, “All the products in Europe will be designed and manufactured in Europe, not outside.” Currently RACOMS is active in the German market for military communications but Tadiran’s strategy is to expand.

RACOMS is currently involved in the civilian rail transport sector providing the wireless communication systems for the very high-speed Transrapid trains. RACOMS currently has current annual revenues of Euro 10m in this area. Tadiran has no presence in this sector at the moment. Hermoni said that the potential gains form this area might be considerable. “If they succeed it might bring more value to Tadiran than all the current value of Tadiran… but let’s s

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