Johnston satellite dish plant being sold

Andrew employees would keep jobs

A satellite-dish manufacturing plant in Smithfield is changing owners, the latest chapter in the saga of what was once the town's biggest employer.

The good news for Johnston County: The buyer says it plans to keep the factory's 250 workers.

Andrew Corp. is selling its unprofitable satellite communications unit, including the Smithfield plant, to a private equity firm that specializes in underperforming businesses -- Resilience Capital Partners of Cleveland.

Resilience has agreed to pay as much as $39 million for the unit, but much of the purchase price is contingent on the future performance of the business, which will be called ASC Signal Corp. ASC will have 450 workers when the deal is complete, likely before the end of the year.

"It's a good business that is lost inside a large company," said Resilience Capital managing partner Bassem Mansour. "I think, at the end of the day, these guys are terrific suppliers for their customers. They have a good business model in a growing market."

The business will continue to be run by Jude Panetta, the president of the satellite communications unit, Mansour said.

The satellite communications business, which accounts for about 5 percent of Andrew's revenue, hasn't met expectations, company spokesman Rick Aspan said.

"We felt that a buyer for the business could help it be singularly focused on satellite communications and would help its long-term performance," he said.

CommScope, which is based in Hickory, agreed in June to acquire Andrew for about $2.6 billion. That deal is expected to be completed by the end of the year.

Falling revenue

In the fiscal year that ended in September, the satellite communications unit generated $104 million in revenue, down from $122 million a year earlier. Its operating loss was $50 million, including a one-time, noncash charge of $32 million.

In recent years, Andrew tried to bolster the unit's bottom line by exiting unprofitable businesses, which was the primary reason for the decline in revenue, Aspan said. At the same time, the unit has entered new markets that it expects to be more lucrative, including satellite communications for the military.

The satellite-dish plant was once Smithfield's largest employer, with 1,600 workers at its peak. It was originally a Channel Master plant, then Andrew acquired it for $18 million in 2003 after Channel Master went bankrupt.

The plant makes satellite dishes that consumers use to receive satellite TV transmissions. It also makes equipment that businesses use to transmit and receive data via satellite, such as gas stations that use it for credit and debit card information.

Smithfield almost lost the satellite-dish factory twice in recent years.

In 2005, Andrew announced that it planned to shift production to Mexico. However, it shifted gears and decided to move to Goldsboro, lured by at least $3.9 million in tax breaks and other incentives. Then in June of 2006, it reversed course again and said the plant would stay put.

Getting incentives

Andrew made the decision to keep its plant in Smithfield without an incentives package in hand but subsequently received a commitment of as much as $450,000 in tax breaks from Smithfield and Johnston County, spread out through 2010.

Those tax breaks are contingent on investments in new equipment at the plant.

"It's all performance-based," said Michael de Sherbinin, director of the Johnston County Economic Development Commission. "If these investments do not occur, there would not be a grant."

The tax breaks are transferable to a new owner.

Last year, Andrew said it planned to create 204 new jobs in Smithfield, but the new owners aren't making any promises.

"We're interested in growing the business, but it's premature to say how many people and where they will be added," Mansour said.