Defense tech firm L-3 Communications Holdings (LLL) is continuing its push to build out its airport security operations, acquiring British-based security screener MacDonald Humfrey (Automation) in a deal valued at £224 million ($280 million).

Luton-based MacDonald Humfrey makes camera-based luggage security screening systems deployed at airports in Europe, the Middle East and Canada, and has recently begun courting airlines and airports in the United States. The company, which employs about 350, is expected to generate sales of about $135 million in 2017.

Terms of the deal include an upward adjustment of up to £30 million payable in 2020 based on MacDonald Humfrey's post-acquisition performance. The target is being rebranded as L-3 MacDonald Humfrey, and will operate as part of the buyer's Security & Detection Systems division.

Tom Ripp, the division's president, in a statement said that with MacDonald Humfrey in-house "we will be able to more effectively address continually evolving security requirements and the growing end-user demand for centralized screening supported by common data networks."

The deal continues L-3's expansion push, which the company telegraphed late last year when it added Chris Kubasik as president and chief operating officer. L-3 was a prolific dealmaker early in its 19-year history, doing more than 100 acquisitions during a period of post-Cold War consolidation, but had slowed the pace since the unexpected 2006 death of co-founder and CEO Frank Lanza.

Kubasik, who at one time was CEO-elect at Lockheed Martin and is a respected industry strategist, told investors mid-year that L-3 has at least $1 billion in potential firepower to do acquisitions and was evaluating more than a half-dozen potential purchases.

Cowen analyst Cai von Rumohr, in a note, said the purchase, at about 10 times estimated 2017 Ebitda, is "fully priced," but argued L-3 should have opportunities to grow the business given its large airport security system portfolio and its global distribution. The company, which sells a range of explosives detection systems, whole-body imaging units and other airport gear, also has a deal pending to acquire Implant Sciences, which makes sensors to detect explosives and narcotics, out of bankruptcy for $117.5 million, subject to court approval.

"When combined with LLL's baggage check systems and the proposed acquisition of Implant Sciences' explosives trace detection capability, L-3 will have the ability to offer more comprehensive and integrated check point solutions," von Rumohr write.

In addition to the airport security deals, L-3 also in October agreed to acquire pilot training firm Aerosim for an undisclosed price.

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