Our client, EDSS, has successfully developed and marketed world-class methodologies and simulation tools for assessing the effectiveness of electronic countermeasures and active protection. These are used in tactical engagements against radar and infrared guided missiles, rocket-propelled grenades and radar-controlled gun systems.
The company is now seeking a strategic buyer / investor to accelerate its growth in the global market. This is a rare opportunity to invest in a paradigm shift in electronic defense simulation software.
The Company
The company is a premier developer and provider of electronic countermeasure and electronic attack evaluation tools. EDSS provides countermeasure effectiveness evaluation training to electronic warfare professionals along with analytical products for countermeasure development and evaluation.
EDSS develops and implements an evolving suite of products based on high-fidelity physics-based modeling and simulation for electronic defense.
The first products were released in 1997 and are mature, stable products now in Version 4 release and include 3D and virtual reality functionality. The company has a clear focus on becoming the leading technology solution in not only its own analysis market but also to expand vigorously into training and hardware test markets using high fidelity physics-based simulations.
It is a small but nimble company with products installed globally. EDSS has a highly gifted staff of developers and, while small, is dominant in its current international market sector. Anticipated growth without the aid of additional investment or buyer is 16% but with additional resources a larger company can bring to bear, growth could easily exceed 100%.
The firm represents a true center of excellence in this specialist field and excels at vision, technical leadership, rapid development and its commitment to delivering high customer satisfaction. It is conservatively managed and has a strong leadership team.
The Market
The defense simulation software and training market opportunity is huge with the market in 2011 at $9.6B and growing at 15%*. The training applications dominate the market with the combat simulation segment at $7.3B, software-only combat simulation segment at $1B and EW-specific analysis software estimated at $200M.
Until the past few years, EDSS has offered products primarily in the latter segment. In 2009, EDSS upgraded its products to run 3D simulations in real-time, opening up the market to companies interested in defense training, electronic defense and/or radar equipment or testing markets. EDSS now offers products to the entire $94.6B defense simulation and training market.
The company has quickly found success in the marketplace with large technically astute clients seeking superior performance for a reasonable investment.
Customers include:
- International defense research and analysis centers
- National Defense Departments
- Prime Contractors
Products & Services
The unique physics-based product suite is written with the latest performance-based simulation technology and runs on the Microsoft Windows platform. The company’s simulation products include various types of radar and infrared guided missiles attacking a number of platform classes that use tactics and countermeasures for survival.
Professional services offered include product customization, consulting and training.
Quality of Customers
The company has earned the support and loyalty of its customers with more than 80% return business. The company has significant Fortune 50 and 500 showcase accounts to highlight its capabilities.
Financial Highlights
The company’s revenue peaked in 2007 at $2.2M. The global recession caused a decline in revenue, however over the past two years, EDSS has improved their software to leading edge technology and in doing so, expanded their marketplace 50-fold. The buyer of this company will have an excellent opportunity to capitalize on EDSS’s investment in this unique technology.
Value Proposition & Competitive Advantage
The organization and its products offer high value relative to other competitive offerings in the marketplace. Its high fidelity performance, reliability, flexibility, open architecture and real-time run speeds differentiate it from others. The systems are easily and cost effectively adapted to the unique needs of a wide variety of electronic defense clients.
The Opportunity
Given the diverse nature of this special opportunity, there are a broad range of companies that would find an acquisition or merger synergistic. These would include:
- Electronic defense equipment and systems contractors
- Companies in the electronic defense operational support and analysis markets
- Companies in the training and simulation business
An acquisition would significantly enhance the capabilities of companies in each of these markets.
For more information please contact Jim Pullen at 416.483.9400 x105 or by email.
*Data source: Visiongain