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GM Hughes Completes $105 Million Acquisition of M/A-Com Subsidiary

October 01, 1987|CHRIS KRAUL | San Diego County Business Editor

SAN DIEGO — GM Hughes Electronics has completed its previously announced $105 million acquisition of M/A-Com Inc.'s MTEL commercial telecommunications unit, which employs 300 at plants in Torrey Pines and Sorrento Valley.

The acquisition of MTEL will make the Detroit-based subsidiary of General Motors one of just three companies--the others being GTE Corp. and Contel Corp.--to offer complete, self-contained satellite-based communication systems, said John Koehler, an executive of Hughes Communications Inc., a GM Hughes unit based in El Segundo.

MTEL manufactures "terrestrial" satellite telecommunication equipment including Earth stations or satellite dishes, while GM Hughes specializes in satellites and other space-related hardware, Koehler said.

MTEL sales totaled $120 million last fiscal year. Headquartered in Germantown, Md., MTEL employs 1,100. No layoffs or management changes are planned at MTEL, which is being renamed Hughes Network Systems.

M/A-Com senior vice president Joseph Bothwell said the sale of the MTEL subsidiary, first announced last May, is consistent with M/A-Com's stated goal of divesting itself of all commercial and consumer electronics and telecommunications businesses. The firm is based in Burlington, Mass.

M/A-Com is positioning itself to sell products only to defense-related and other government customers, Bothwell said.

In September, 1986, M/A-Com sold its San Diego-based Videocipher satellite TV encryption device business to General Instrument Corp. for $220 million. Videocipher's decoder boxes have become widely used by cable TV programmers trying to stop piracy by home dish owners of programming transmitted via satellite.

Both Videocipher and MTEL were originally parts of Linkabit, a digital communications company founded in San Diego in 1968 by two computer science professors, Irwin Jacobs and Andrew Viterbi.

Private satellite-based telecommunication systems capable of transmitting voice, data and video information are becoming increasingly popular with Fortune 500 companies that want to link multiple offices or outlets. GM Hughes' customers include Southland Corp. (operators of 7-11 Stores), Wal-Mart, Holiday Corp. and Schlumberger.

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