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MDA hopes to use cash for acquisitions Add to ...

Executives from MacDonald, Dettwiler and Associates Ltd. made it clear on a conference call with analysts Friday that they hope to use the approximately $850-million in cash from TPG Capital to make some new acquisitions.

Although they didn't specify the names of firms they are eyeing, executives did divulge that there likely won't be any space-related deals.

"We are not focused on buying companies that are similar to us," president and chief executive officer Daniel Friedmann said.

Instead, they are looking at businesses that could use their products in a unique way, such as those automating a part of their operating process with complex software. MDA is also trying to build bridges with companies in the resource sector because oil and gas firms are now the largest buyer of their remote imaging services, management said on the call.

However, there won't be any gigantic announcements. "It will not be a big bang. There will be several bangs as we go along in the next little while," Mr. Friedmann said.

Going forward, geospatial services will merge with the space operations. "When we first started all this ten years ago, geospatial seemed to be more related to products. But it's been crystal clear for the last five years that it's completely integrated and related to our systems business," Mr. Friedmann said.

The executives did not provide too much extra colour on the sale process. All that is known right now is that they put the company on the block and heard from a bunch of interested parties. MDA then short-listed these down to four candidates and ultimately selected TPG.

As to why TPG wants the business, it's still a little unclear. MDA says they own complementary businesses, but there hasn't been any clarity as to what exactly those are.

The transaction was a complex one because the property information business sprawled across 35 different entities in 15 different jurisdictions. But chief financial officer Anil Wirasekara said MDA's balance sheet is now much cleaner because the deal eliminated 90 per cent of goodwill and intangible assets, and replaced them with cash.

Canadian firms got a taste of the deal's complexity. BMO Nesbitt Burns provided a fairness opinion and Stikeman Elliott LLP was hired for legal advice.

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