Acquisition brings together Ashtec, Magellan

Orbital Sciences Corp. strengthened its position in the Global Positioning System (GPS) receiver industry through an agreement to acquire and merge Ashtec Inc. with Orbital's Magellan Corp. subsidiary creating a $125 million satellite receiver company. Magellan which introduced the first handheld GPS receiver in 1989 with a cost of more than $3 000 has pioneered development of low-cost handhelds and now markets a model with a list price as low as $99.

Magellan also manufactures satellite communications receivers including a handheld unit that features a built-in GPS receiver designed for use with Orbital's fleet of low-data-rate communication satellites slated to provide worldwide service in 1998. The privately held Ashtec has concentrated on the higher end of the GPS market and supplies the reference receivers used in the base stations of the nationwide Differential GPS network operated by the Coast Guard.

Ashtec also supplies high-resolution systems capable of measurements in the millimeter range to a number of federally backed projects designed to predict earthquakes by monitoring of tectonic plate movements. Orbital intends to fold Ashtec into Magellan to create a GPS and satellite receiver powerhouse.

David Thompson Oribital's chairman said the merger will result in "the world's foremost satellite access products technology business offering advanced GPS positioning navigation and timing solutions as well as the latest satellite telephony and data communications products."

Former Apollo 13 astronaut James Lovell Jr. who serves on the Ashtec board said "The merger is great for GPS and all who use that technology." Charles Trimble chairman of Trimble Navigation Ltd. the leading company in the GPS receiver market said the Magellan/Ashtec merger confirmed his belief that "consolidation in the GPS industry is inevitable.... When completed the combination of these two companies should create a strong No. 2 competitor in the GPS industry further increasing the pressure on the niche players."

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