Shah Capital Partners, a private equity firm focusing on technology, will acquire GNSS receiver manufacturer Thales Navigation from the Thales Group, of Paris, France.

The two companies reached a “definitive agreement” on July 20, according to Shah Capital, with the transaction expected to close in the third quarter of 2006. Reportedly, the selling price was $170 million.

The deal will apparently bring back Magellan as a corporate name in the GNSS field as well as a popular brand of consumer GPS products. Thales Navigation will become Magellan Navigation, Inc. and be headquartered in San Dimas, California. The new name and headquarters evoke the Magellan Systems Corporation founded in the late 1980s and later merged with Ashtech, Inc. following the latter companies’ acquisition by first Orbital Science and then Thales in 2000.

Thales Navigation makes products using GPS and GPS/GLONASS technologies for OEM, survey, GIS and consumer markets worldwide.

Copyright 2006 Gibbons Media and Research LLC

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The consortium negotiating to build and operate Europe’s Galileo system now expects to sign an agreement with the Galileo Joint Undertaking (GJU) by the end of 2006.

Stefan Sasser, managing director of TeleOp GmbH, a member of the merged eight-member consortium, made that prediction to participants in the Allsat Open conference held June 22 in Hannover, Germany. The event was hosted by Allsat GmbH, a provider of GNSS products and engineering services.

The agreement will not be a full-fledged contract, however, but an outline of the “head of terms” — or the headlines of the contract — identifying the key issues and responsibilities for the Galileo program, now scheduled to complete a 30-satellite GNSS constellation by 2010.

At that point, the GJU is scheduled to go out of business, leaving responsibility for signing and overseeing a contract with the concessionaire to the Galileo Supervisory Authority (GSA). The GSA is a European Union (EU) agency set up a couple of years ago and headed by Pedro Pedreira that will actually own Galileo.

On the industry side, the consortium members are currently setting up a Galileo Operating Company (GOC), which will be headquartered in Toulouse, France, and be responsible for the contract with the GSA. The GOC will award three key subcontracts: to Arianespace for launch services, Galileo Industries (a consortium of European aerospace companies) for deployment of the Galileo space and ground infrastructure, and a 20-year services contract with an operations company to be based in London, England.

The concession partners and the European Space Agency (ESA) are negotiating an agreement for ESA to hand over responsibility to the GOC in 2009 for overseeing completion of the Galileo infrastructure. ESA will retain responsibility for providing “technology refresh and replenishment” for the system infrastructure.

According to industry officials, the concessionaire will need to go back to more than 100 prospective subcontractors and negotiate deliverables and costs, before approaching European banks for financial backing. An actual contract is now expected to be signed by the end of 2007. That contract timeline is not expected to affect the Galileo implementation schedule.

China’s Galileo Role. Meanwhile, the participation of non-European nations in the Galileo program remains a matter of discussion. EU transport ministers are deliberating China’s participation in the GSA, with some reportedly resisting the nation’s membership despite the fact that China is a partner in the GJU.

When it joined the GJU, China pledged $200 million to the Galileo effort. Most of that money has been spent in China, however, on infrastructure and application development projects; one European industrial source suggested that the amount that has gone into the Galileo program budget is no more than $10 million.

Complicating the picture are reports that China plans to pursue its own military GNSS system called COMPASS and may seek to put signals on the same portion of the L1 frequency as the new military GPS M-code.

Copyright 2006 Gibbons Media and Research LLC

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Okay, now it’s official: The GPS Block III contract award has been delayed from Fiscal Year 2006 (FY06) to Fiscal Year 2007 (FY07).

A request for proposals (RFP) for the GPS Block III satellites will now be released in late December 2006 with selection of a single contractor expected in late June 2007, according to the GPS Joint Program Office (JPO), the U.S. Air Force’s executive agency for GPS acquisitions. That is about a year later than the most recent timeline for the program, which will produce a new generation of satellites.

In the meantime, the GPS JPO has extended the existing GPS Block III Phase A (concept and technology development) contracts, which were competitively awarded to teams led by Lockheed Martin and Boeing in January 2004.

“We have already sent an additional $5 million each for work on risk reduction on the navigation payload, the longest lead-time item,” a JPO source told Inside GNSS. “We’re working with each contractor on the specific amounts for each extension, and plan to know the total amount by August 2006.”

The decision by a USAF Acquisition Strategy Panel meeting in early June, will not delay the scheduled launch of the first GPS III spacecraft, say program officials.

The initial launch of the first GPS Block III satellite is still planned for FY13, as reflected in the president’s FY06 budget, according to a GPS JPO spokesperson. The JPO will “incentivize” an earlier launch in the contract.

Based on direction from the undersecretary of the Air Force, the Block III space vehicle program is proceeding with a block-upgrade strategy and a “back-to-basics” approach to acquisition. “The result will be to incrementally develop and deliver a Block III space vehicle with low risk and high confidence,” said the spokesperson.

Copyright 2006 Gibbons Media and Research LLC

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