The move will be accretive for EADS, complementing the company’s expansion strategy to extend its footprint outside Europe and reduce its financial dependence on aircraft manufacturer Airbus, its largest revenue and profit generator. EADS has long desired to double the share of service revenues to 25 percent and reduce Airbus’ overall commercial sales contribution from 66 percent in 2010 to 50 percent of sales by 2020.

   EADS Spokesman Rod Stone said his company would merge Vizada with its EADS Astrium space subsidiary following regulatory approval of the transaction, and that Vizada would continue to serve nongovernmental and government customers in the aerospace, defense, land, maritime and media sector. EADS Astrium builds civil and defense satellites and provides satellite services, and is the lead contractor for building Arianespace’s Ariane space-launch vehicles.

   “Vizada is in an expanding market as marine communications shifts to broadband services,” Stone told Satellite News. “Although Vizada is based in France, most of the company’s billings are in dollars. With most of its costs in euros, EADS has been trying to reduce its exposure to the weak dollar.”

   Vizada executives released its most recent financial reports, showing the company’s 2011 full-year revenue and EBITDA projections at $95 million and $660 million, respectively.

   In an Aug. 1 research report, Cheuvreux Analyst Antoine Boivin-Champeaux said the acquisition, “could help diversify Astrium’s customer base to include fixed, handheld and mobile products across secure commercial and military satellite-communications networks. Vizada will help Astrium meet growing demand for maritime satellite-communications services and aeronautical services for the U.S. government.”

    Vizada is the EADS Group’s fourth acquisition of 2011. Earlier this year, EADS acquired Canadian aviation repair and overhaul company Vector Aerospace. In July, EADS Airbus’ commercial-aircraft division said its parent company agreed to acquire U.S.-based Metron Aviation, which specializes in air-traffic management and services. Airbus is also currently in the process making a $504 million tender offer for Danish aircraft supplier Satair.

   While most analysts hailed the acquisition’s potential for EADS, some expressed concerns that EADS overpaid for Vizada to shed off some of its cash reserve. EADS is paying for the acquisition in cash from of its 11 billion euro ($15.6 billion) reserve, which was reported at the end of June.

   “I would say there is a risk of overpay," Nomura Equity Research Analyst Jason Adams said in a statement. “Given EADS’ Satair acquisition and the multiples they are paying for Vizada, the investors, at some point, will be a bit concerned if they see EADS consciously overpaying for acquisitions.”

   Kepler Analyst Christophe Menard, however, told Satellite News that while EADS said that the deal would boost its earnings per share, the key attractive feature of the deal is the synergy it creates.

   “Vizada has high-value products aimed at professionals and its margins can boost EADS earnings. It also makes sense in terms of some pieces of technology that EADS might soon need,” he said. “Vizada would fit mainly into the existing business at Astrium, which already provides secure communications to Britain and German military.”