Northampton, Mass.-based Kollmorgen Electro-Optical (KEO) develops and manufactures specialized equipment, including submarine photonics systems and periscopes, ship fire control systems, visual landing aids, and ground electro-optical and sensor-cueing systems, primarily for the US military and its contractors and allies. It employs about 550 people between its facilities in Massachusetts and Bologna, Italy.

KEO will become part of L-3's Integrated Sensor Systems organization. The Integrated Sensor Systems sector currently includes L-3's existing EO/IR businesses addressing the air, ground and maritime markets and is reported in L-3's Electronic Systems segment.

“KEO expands and broadens our base in the EO/IR market, a key strategic growth area for L-3, and strengthens our position as a mission-critical sensor systems provider,”  said Wes Motooka, president of L-3's Integrated Sensor Systems sector.

For the year ending Dec. 31, 2012, KEO is expected to generate sales in the range of approximately $160 million to $170 million, and estimated earnings in the range of $26 million to $30 million.

“KEO's technologies provide situational awareness and will enhance current L-3 products, including ISR and targeting sensors, infrared imagers, laser range finders and optical assemblies,” Motooka said.

Based in New York City, L-3 Communications employs approximately 61,000 people worldwide and is a prime contractor in C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems, aircraft modernization and maintenance, and government services. The company reported 2010 sales of $15.7 billion.

The acquisition, subject to customary closing conditions and regulatory approvals, is expected to be completed in the first quarter of 2012. It will be structured as an asset purchase for income tax purposes and is expected to be immediately accretive to L-3’s earnings.