what now for universal avionics after elbit acquisition?

July 5, 2018

Israeli defense giant Elbit Systems Ltd is now joining forces with US commercial avionics maker Universal Avionics. Steve Nichols comments on the big acquisition

In April 2018, Universal Avionics Systems Corporation announced that its acquisition by Elbit Systems Ltd was complete. As a result, Universal Avionics is now a wholly-owned subsidiary of the company.

Universal will remain headquartered in Tucson, Arizona, where it has more than one-third of its full-time employees including the manufacturing, product and customer support, flight test, certification, marketing and sales divisions.

Paul DeHerrera, CEO of Universal Avionics, said: “We see this as a really exciting time at Universal Avionics – a new chapter in our long history of being a technology leader in Southern Arizona. Elbit Systems has expressed to us that they look forward to growing our company, which is great news for Tucson.”

Tucson has been home to Universal Avionics since the company’s early years, when it moved to the area from California in 1988. Its corporate campus, located near Tucson International Airport (TIA), has grown as the company steadily increased its market share and now encompasses nearly 165,000 sq. ft. of space.

The company’s manufacturing facility features advanced automated circuit board assembly, final unit assembly and environmental test technologies.

In addition, the company’s product flight testing activities are conducted in Tucson, using two business aircraft that are based out of its hangar facility at TIA.

But what was it about Universal Avionics that attracted Elbit in the first place?

Dror Yahav, Elbit’s VP Commercial Aviation, said: “About 10 years ago we decided to focus on our enhanced flight vision capabilities, which became a significant but still a niche market for us, and we sell direct to a large number of OEMs, such as Gulfstream and Dassault.”

“Universal brings to us its head-down cockpit technologies, which we didn’t have. This means we can now offer a complete integrated cockpit solution to our customers. As a result we have a very broad and complete product portfolio.”

Yahav said Universal Avionics is very active in aftermarket solutions, a field that Elbit has not been involved in.

“This will be a very relevant market for head-worn displays with markets such as enhanced vision systems for helicopters, Business Aviation and air transport,” Yahav said.

“Universal has a significant presence in this market – they know it very well and have the network and infrastructure in place to support it. For us, it is a way to open up opportunities for this market segment, while we will enable Universal to take advantage of the OEM market.”

But what new products can we expect to see going forward?

“We want to integrate our product lines, not only in a very trivial way, but we plan to introduce a unique combination of enhanced vision and head-up/head-worn displays and flight management capabilities,” Yahav said.

“We also want to bring to market something that no-one has ever seen before, namely a fully-augmented reality cockpit with a unique human/machine interface.”

He said this would enable a lot of information that is currently only available on cockpit displays to be superimposed on the real world.

“The combination will be a great enhancement for the market and will have a big impact when it is introduced,” he said.

Yahav said that it plans to give the world its first glimpse of this new augmented reality cockpit technology at October’s NBAA event in Orlando. “We started with our integration right away and have a big list of ideas we want to bring to market,” he concluded.

Elbit also plans to showcase some of its integrated cockpit technology at Farnborough International in July.

Paul DeHerrera, Universal Avionics CEO said the company’s acquisition by Elbit was “a very good thing”.

“It was a complex deal and we spent a long time finding the right acquisition partner, and although it sounds like a bit of a cliché, we felt we had a very good fit with Elbit,” DeHerrera said. “We are both customer-focused businesses, rated highly for our support and innovation.”

He said former owner Ted Naimer wanted to make sure that Universal and its employees would have a strong future.

“Ted has always regarded Universal’s employees as family and was very committed to ensuring that they, and the company, had a solid future – he didn’t want to see it torn apart. That’s why it took some time to find the right partner. With Elbit, there were a lot of very positive points, including our cultures and fit,” DeHerrera said.

But why Elbit?

DeHerrera said the company has a strong background in military avionics, which it will continue to market in the US via Elbit Systems of America, leaving the commercial business to Universal Avionics.

“Elbit has great channels to its markets and some of its product lines are a good fit with what we are doing,” he said.

One “fit” is Elbit’s head-up display (HUD) and Enhanced Vision Systems (EVS) technology, which is important to Universal Avionics as it expands and extends both its head-up and head-down solutions for the Business Aviation market.

“The important point is we have retained the Universal Avionics brand, but I’m very happy to see ‘an Elbit Systems Company’ as our new strapline. It gives us the security, finance and backing we need to approach OEM customers with greater confidence,” he said. “Companies like Boeing, Textron and Gulfstream want to know that your company has the security it needs to back major programs. With Elbit behind us they know we have the capital and support required and we are really excited by that.”

DeHerrera said work is already under way to get both companies’ engineering teams working together to blend their technologies.

“There is a lot of integration work to do, but we will continue to have separate teams and Universal will continue to look after non-military, commercial contracts in North America. While Elbit has product technologies that appeal to us, Universal also has some products that Elbit might wish to market, so we both win,” DeHerrera concluded.

History of Universal Avionics

The world of aviation is full of characters and Universal Avionics features one of the most well-known.

From the book “Universal Avionics: 30 Years of Innovation,” we learn its origins go back to the late Hubert Laurenz Naimer – founder and president of Universal Avionics. Naimer was a successful entrepreneur, businessman and an experienced pilot who had spent more than 40 years in the cockpit.

Since its incorporation in 1981, Universal Avionics had been a privately-owned corporation, specializing in flight management systems (FMS) and advanced display systems for a range of commercial aviation markets.

“The whole concept of an FMS is to make life easier for pilots,” Naimer is reported as saying in a magazine interview. He thought such a system could be capable of accepting inputs from a variety of position sensors, and would include provision for accepting a variety of new types of sensors in the future.

Universal’s first product was the UNS-1 Flight Management System, the first multi-sensor FMS for the corporate and commercial aviation marketplace and which was introduced in 1982. Since then, more than 15,000 FMSs have been shipped.

Naimer was also intrigued by the possibility of moving away from bulky, heavy cathode-ray tube technology, although it took around 20 years before sharp, high-resolution active matrix liquid crystal displays (AMLCD) would become available. But when they did appear, Universal adopted them with enthusiasm.

According to the book, Naimer was also convinced that Universal could develop a realistic, animated flight display – already dubbed “synthetic vision”. Naimer previewed “Vision-1” at the 2000 NBAA Convention and announced that it was on the “fast track” to developing the technology.

Until his passing in 2004, Hubert Naimer maintained leadership control and continued to work hand in hand with engineering on new product concepts and designs. His son, J. L. “Ted” Naimer, who had been actively involved in the business for more than 30 years, assumed the position of President of Universal Avionics Systems Corporation. Ted has been the second larger than life character from the Naimer dynasty since then.

Universal Avionics’ current product line includes integrated EFIS displays, communications management units, radio control units, terrain awareness warning systems, synthetic vision, cockpit voice recorders, attitude heading reference systems and more.

So Who are Elbit?

Elbit Systems Ltd. is an Israel-based international defense electronics company engaged in a wide range of program throughout the world.

The company operates in aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems (UAS), advanced electro-optics, electro-optic space systems, electronic warfare suites, signal intelligence (SIGINT) systems, data links and communications systems and radios.

The company also specializes in upgrading existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services, including training and simulation systems.

Elbit Systems has approximately 12,500 employees engaged in engineering, research and development, and other technical areas. Elbit Systems’ shares are traded on the Tel Aviv Stock Exchange and NASDAQ.

Elbit already owned several companies in the United States through its American subsidiary, Elbit Systems of America (ESA), including EFW in Fort Worth, Texas; IEI in Talladega, Alabama; Kollsman Inc. in Merrimack, New Hampshire; Innovative Concepts, Inc. (ICI) in McLean, Virginia; VSI in San Jose, California; UAS Dynamics in Fort Mill, South Carolina and M7 Aerospace in San Antonio, Texas.

Through this latest acquisition by Elbit Systems, Universal Avionics says it will be able to take advantage of new opportunities by expanding further into new commercial market segments and programs.