Thursday, 18 February 2010

AeroMechanical & L-3 Communications Now Officially Tied At The Hip

AeroMechanical Services Ltd. (TSX:V-AMA)
Basic Shares: 103.1 million
Fully Diluted: 117.6 million
Management, Directors, and Officers > 7.1%


In early November there was an announcement from AMA that it had signed a reselling and teaming agreement with the Aviation Recorder Division of L-3 Communications. AMA is to provide real-time data communications and internet delivery solutions for aircraft. Importantly, L-3 is the pre-imminent global provider of what is commonly called the “black box”.

L-3 Communications has now issued its own release with the content of that news essentially a mirror of what was in AMA’s on November 6th.

The point to note is that this is the first public acknowledgement from L-3 that the two companies are partnering on this technology initiative. As a company with annual revenues in excess of $15 billion, it stands to reason that L-3 does its homework before not only partnering with a company but also publicly pronouncing that relationship.

We ask, would L-3 link arms with AMA if L-3 did not believe in the technology developed by AMA and that it would play a role in keeping the U.S. based giant at the forefront in its sector?

Aside from all of the other benefits of AMA’s technology, global real-time tracking and reporting as it specifically relates to black boxes became a much discussed issue with last year’s AirFrance disaster over the Atlantic. That blackbox and its secrets remain undiscovered at the bottom of the ocean.

We cannot answer the question of how quickly the L-3 – AMA partnership will translate into new business. It’s our understanding there have been a myriad of meetings with a number of airlines and in many cases, multiple meetings with some of the organizations.

In the words of Bruce Coffey, President of L-3’s Aviation Recorder Division,

“L-3 is extremely pleased to offer to its extensive, worldwide airline and OEM customer base a complete flight data storage, transmission and management system that combines L-3’s leading QAR, FDR and EFB products with the AMA suite of wireless data monitoring, transmission and analysis products and tools. In conjunction with an on-board L-3 FDR, AMA has already demonstrated FDR data and aircraft position streaming on in-service aircraft.”

L-3 is listed on the NYSE and has a market cap in excess of $10 billion. We hope that as the L-3 - AMA relationship becomes more widely known in the U.S. market that the investment, institutional and retail investing communities in that country ask, “who are those guys from Canada?”

To read the news release click here.