Interview with John Belcher of ARINC. Belcher is charting ARINC's next moves, which will be primarily aimed at the commercial travel industry. On Tuesday, ARINC's parent company, The Carlyle Group, agreed to sell ARINC's Defense Systems Engineering and Support division to Booz Allen Hamilton for $154 million.
Posted: Sunday, October 21, 2012 5:00 am | Updated: 12:06 am, Sun Oct 21, 2012.
John Belcher is not an international man of mystery.
The ARINC Inc. CEO leads a firm that makes travel easier for many. And while many Annapolitans might be unsure of what goes on at ARINC's Riva Road campus, Belcher says most people have used the firm's technology without ever realizing it.
ARINC, in fact, is just about everywhere. That ticket kiosk at the airport? Good chance ARINC's software runs it. Been on a train in America? ARINC's control system tracks about 60 percent of the nation's rail traffic.
Vacation at Disney World resorts? ARINC is there, too. Disney's Magical Express system allows users to check out of the hotel and check in with their airline.
Belcher is charting ARINC's next moves, which will be primarily aimed at the commercial travel industry. On Tuesday, ARINC's parent company, The Carlyle Group, agreed to sell ARINC's Defense Systems Engineering and Support division to Booz Allen Hamilton for $154 million.
The DSES sale means 1,000 of ARINC's 3,000-plus employees will now have a new home. Locally, 58 jobs will be transferred and another 117 ARINC workers in the state will become Booz Allen employees.
Belcher, who has been CEO since 2002, said ARINC's future hinges on growth in the commercial sector. He plans to keep hiring (ARINC has listed 18 job openings for Annapolis since Oct. 1) and generating double-digit annual revenue increases.
ARINC's growth could come through the purchase of existing firms or by expanding current operations. Belcher sees growth opportunities in the international airport technology market. He's eyeing Asia, Europe and South America.
ARINC is one of Anne Arundel County's largest employers, with about 1,200 local workers. Belcher said he's committed to keeping the company headquartered in Annapolis. Belcher spoke with The Capital this week about his plans for the 83-year-old firm:
Where do you see the company in five years?
"We want to change our thrust to go more commercial. We'll look at the marketplace and ask 'Where do we want to be in three to four years?' We look to see where we can invest and gain more in the marketplace.
"We have to look at how we get into more of the commercial airport market, such as kiosks at airports. We want to add more places like Disney World and cruise ships. Our solutions allow users to check in their bags, get their boarding passes, then all they have to do is get in a cab and go to the airport.
"We control 60 percent of positive train control in the United States. Our train control centers are like air traffic control for locomotives. There is legislation that all trains must be in the plan by 2016. We see that as a growth area."
How important is pre-planning for these types of changes?
"Every company has to look at what is best for it going forward. Every three or four years you have to adjust. If your (owner) is looking for an exit strategy, you better be ready for it. It doesn't matter to us. We believe we're No. 1 at what we do and you just adjust to it."
Do you expect Carlyle to take ARINC public?
"It depends on the time frame and the economy. We could be bought by another company like Carlyle or someone in our space or we could be taken public. They do what is best for the shareholders and my management team are shareholders. (Carlyle) know(s) we can build this company."
How do you select your growth areas?
"We almost have too many opportunities to grow. We have to choose the right course. There's growth (opportunities) like you wouldn't believe and our track record shows we know how to grow companies.
"The economy is going to get better. One thing that helped us is we went global. (The economy) is growing in Asia and some parts of Europe and South America. We will concentrate on those areas.
"We think things will get better in America. U.S. technology companies are always in the lead. Sometimes you have new technology and you have to wait for the rest of the world to catch up. Demand will come, but it takes time."
What is your plan for acquiring existing companies?
"We decide what we want to do and where we want to grow. We'll look to see if there is a company that already provides those services or if we need to build it ourselves.
"We also may go to a company and ask them to subcontract with us on a bid. If a bid requires a specific solution, we'll look for a system solution, and it doesn't have to be our product.
"We look for opportunities where the risk is low. In this economy, you don't want too much risk. We can't wait to get further investment and get further growth."
How difficult is it to see 1,000 employees shift to new ownership?
"We worry about our employees. It's important that they're moving to a great employer. They will fit in perfectly. Booz Allen is getting a good set of expertise."
How long do you see yourself remaining at ARINC?
"I've been here 14 years. I plan to stay a few more years. In 10 years, I will not be here. In the next three or four years, I'll take the company in whatever direction is the best for shareholders. After that, I'll either take on another company or start my own from scratch."
