Communications Satellite Corp. plans to purchase Environmental Reseach & Technology Inc., a privately held firm based in Concord, Mass., the companies announced yesterday.
Under a memorandum of understanding, the purchase price will be a combination of Comsat stock and cash, based on the earnings performance of ERT in 1978 and 1979, the companies said. The terms will be included in an agreement and plan of merger to be presented to the boards of both companies and the stockholders of ERT, they said.
Comsat is a Washington firm engaged primarily in providing international, maritime and U.S. domestic satellite services. Its operating revenues last year were $168.2 million.
ERT is engaged in a broad spectrum of environmental services, a large portion of which is the monitoring and analysis of environmental information. Its operating revenues last year were $23 million. It has about 650 employees.
Comsat first said it was considering acquisitions at its annual meeting May 9. Comsat Chairman Joseph McConnell said then. "Expansion could come from internal growth or through business acquisitions," nothing that Comsat "generates substantial amounts of cash" and has no long-term debt.
On the same day, Comsat was ordered by the Federal Communications Commission to rebate $92.5 million, plus $3.5 million interest, to its customers. The FCC order resulted from a 13-year dispute over rates for international satelilte services.
The FCC order cut international satellite rates by 48.5 percent, less than the original order, which Comsat had appealed. Comsat's profits fell in 1976 and 1977 as the company put funds into an escrow account to repay its customers, which are large communications firms.
The dispute with the FCC dates to 1965, only two years after Comsat was formed as a government chartered company.