Alexander Coolidge reports:
In a $10 million deal, defense contractor BAE Systems announced on Tuesday it is selling off its locally based commercial armored vehicles business that employs 134 workers.
The acquiring company is Sycamore Township-based O’Gara Group Inc., which provides security equipment and services to commercial and government clients. The transaction will close by the end of the year.
The deal marks something of a reunion for chairman Thomas O’Gara and chief executive Bill O’Gara. Both helped build O’Gara-Hess & Eisenhardt Armoring Co. into one of the world’s largest armored vehicle makers before selling it to Armor Holding in 2001, which was acquired by BAE in 2007.
CEO Bill O’Gara vowed to grow the business.
“We look forward to continuing the growth of our commercial armoring business and expanding the transparent armor business,” he said in a statement. “This acquisition not only restores our heritage, it also advances our position and agility in the commercial armor market.”
Earlier this year, the O’Gara Group leased a 36,000-square-foot Fairfield facility to expand an armoring business it acquired, Protection Devices Inc. of San Antonio, which makes fully armored passenger vehicles, mostly for government officials working in dangerous circumstances.
If the latest deal reflects O’Gara Group ramping its business up, it also marks BAE Systems dialing its business back.
The commercial sale comes less than three weeks after BAE Systems announced it would lay off 160 workers by March 31 as it shut down local military production and transferred the work designing and making armored cabs, turrets and accessories to a factory in Sealey, Texas, outside Houston.
BAE Systems has been cutting positions over the past two years as it experiences a marked decrease in production volumes. Factors include the winding down of some long-standing programs, leaner defense budgets and the recession.
“The decision to sell the commercial armored vehicles business and transition our remaining production work from our West Chester site to Sealy improves our competitiveness,” said Erwin Bieber, president of BAE Systems Inc.’s land and armaments, in a statement.