Military contractor STI to acquire TerraSystems

By John Duchemin
Advertiser Staff Writer

Honolulu optical-sensor design company Science & Technology International yesterday agreed to acquire Manoa-based TerraSystems Inc.

The deal takes effect immediately. TerraSystems will become a division of STI, one of the state's leading military contracting firms. Terrasystems founder Jonathan Gradie will become an STI vice president. Financial terms of the deal were not disclosed.

The merger is the latest expansionary move by STI, which for years has developed military systems that use light to detect and identify underwater objects such as submarines and mines. STI recently decided to take its optical technology mainstream, attempting to create products for use in cancer detection, environmental monitoring, and other purposes.

Both STI and TerraSystems are part of a growing remote-sensing industry in Hawai'i that also includes such firms as Innovative Technical Solutions, Trex Enterprises and Orincon.

STI was founded in 1980 by several scientists, one of whom was Gradie. It originally used optical sensing to improve the quality of images from space. Nick Susner, company president, bought STI in 1993 and transformed it into one of the state's leading military contracting firms.

With the acquisition of TerraSystems, STI now has more than 110 employees, Susner said. The company has a $50 million contract with the Office of Naval Research, provides computer modeling and support services for the Pacific Disaster Center and has several other contracts worth several million dollars.

TerraSystems, a 9-year-old company with headquarters at the Manoa Innovation Center, makes optical-sensing systems for uses including environmental monitoring, analysis of underwater life and soil analysis. It has less than a dozen employees.

"We realized that to get to the next step, we have to combine with someone with the resources to help us accelerate our development," said Gradie, a planetary scientist who is well-known enough in astronomy to have an asteroid named after him, Asteroid 3352.

"Jonathan fits very nicely into our corporate vision," Susner said. "He brings decades of experience in remote-sensing technology, and the blend of his company and ours will strengthen us and expand our customer base."