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VirTra Systems in Talks for Buyouts

Posted on: Thursday, 27 October 2005, 12:00 CDT

By Bobby White, Fort Worth Star-Telegram, Texas

Oct. 27--VirTra Systems, maker of virtual-reality simulations, said it was in talks to purchase three private technology companies by the beginning of next year.

The company will purchase Altatron, an electronics manufacturer based in Moonpark, Calif.; the Tyler technology-engineering company Dynalyst; and Suntech, a Tempe, Ariz., company that manufactures electronics components. By purchasing the companies, VirTra would be able to cut manufacturing and logistics costs.

A company like Altatron would be able to manufacture parts for VirTra's simulation machines, relieving VirTra's burden of having to wait on components from other companies. In addition, as a contractor, Altatron would be able to make parts for other businesses. Kelly Jones, VirTra's chief executive, said that when the merger occurs, the companies would continue as four different divisions.

VirTra didn't disclose terms. An "enormous amount of work" remains before a definitive agreement can be reached, including due diligence and shareholder meetings, Jones said.

The company's stock trades over the counter, but Jones said the deal would catapult it onto the Nasdaq. Its stock (ticker: VTSI.OB) improved to 19.5 cents, up 5.5 cents per share.

"Ultimately this will make our company a bigger, broader, more financially stable company," he said.

VirTra Systems began as an Internet-based interactive-entertainment system in 2001 and later moved into assembling police- and military-training simulations. The virtual training simulations use high-definition projectors, interactive computer systems and infrared-laser-equipped weapons. The equipment is ordered from other companies and assembled by VirTra technicians.

A simulation system starts at about $80,000 and can cost up to about $250,000. Military recruits improve their marksmanship and use-of-force judgment in a range of scenarios programmed by computers.

In recent years, the company has had difficulties reaching an even financial footing. In 2003, it lost $1.5 million on $1 million in revenue. In 2004, it reported $1.6 million in income on about $1 million in revenue. Jones attributed the profit to account changes and debt-to-equity conversions.

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Copyright (c) 2005, Fort Worth Star-Telegram, Texas

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VTSI.OB,

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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