Rapiscan Systems Receives Six-Year Agreement for Approximately $400 Million

January 19, 2012 Hawthorne, CA


Rapiscan Systems,a leading global supplier and manufacturer of security inspection systems, has been awarded a six-year authorization by Servicio de Administración Tributaria (SAT), Mexico’s tax and customs authority, to provide inspection services by implementing a wide-ranging program of cargo and vehicle security screening systems and services throughout Mexico.

Rapiscan was selected to carry out the program after a thorough and competitive tender process. Rapiscan is the sole provider for this agreement, with an initial award size of approximately $400 million over the six-year duration, and the total award value could increase depending on finalization of program scope.

Deepak Chopra, president and CEO of OSI Systems, Rapiscan’s parent companystated, “The combination of the magnitude, scope, and duration of the SAT award is unprecedented not only for us but for the entire security industry. SAT’s decision to select Rapiscan Systems reaffirms the value of our strategy to expand our security offering beyond the manufacture and sale of screening and detection equipment by providing comprehensive turnkey screening services to our global customer base. This unique service model will result in significant recurring revenue for OSI Systems for the duration of the program.”

Under the program, Rapiscan Systems will provide complete operations of a comprehensive x-ray screening program, which will incorporate technology, staffing, systems integration, and maintenance support at sites networked throughout Mexico, including ports of entry as well as inland checkpoints and airports. These operational capabilities will significantly enhance the Mexican government authorities’ capability to interdict contraband and undeclared materials.

Mr. Chopra continued, “The SAT award is Rapiscan’s second significant win to provide turnkey screening services; it follows the ten-year award from the Puerto Rico Ports Authority (PRPA). Only a small percentage of the world’s cargo volume is currently inspected. There is a growing need and trend to increase the level of cargo screening worldwide. We intend to capitalize on our market position to compete for and win future programs like this one. Our experience and capability to develop and integrate leading edge inspection technologies coupled with our depth of operational expertise is unmatched in the industry and makes us uniquely qualified to secure and manage complex programs like SAT and PRPA.”

Ajay Mehra, President of Rapiscan Systems, stated, “The Mexican government’s initiative to secure its borders and highways represents an important step in the security inspection arena. We are proud to be selected to execute this critical program and our selection reinforces the attractiveness and compelling value of our unique turnkey service model.”

About Rapiscan Systems, Inc.                                                          

Rapiscan Systems, Inc., a division of OSI Systems, Inc., is a leading global supplier of security inspection solutions utilizing X-ray and gamma-ray imaging, and advanced threat identification techniques such as neutron and diffraction analysis. The company's products are sold into four market segments: Baggage and Parcel Inspection, Cargo and Vehicle Inspection, Hold Baggage Screening and People Screening. The company has an installed base globally of more than 70,000 security and inspection systems. The Rapiscan Systems product line is manufactured at four locations and supported by a global support service network. As the world's leading security screening provider, Rapiscan Systems provides state of the art products, solutions and services that meet our customers' most demanding threat detection needs --- while improving their operational efficiency.