Racal
Encyclopedia
Racal Electronics plc was once the third-largest British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 electronics firm. Listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

 and once a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....

, Racal was a diversified company, offering products including: as voice and data recorders; point of sale
Point of sale
Point of sale or checkout is the location where a transaction occurs...

 terminals; laboratory instruments; military electronics, including radio and radar. At its height, it operated throughout 110 countries world-wide and employed over 30,000 people. It was the parent company of Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...

, before the mobile telephony provider was sold in 1991. Racal was purchased by Thomson-CSF
Thomson-CSF
Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....

 (now Thales Group
Thales Group
The Thales Group is a French electronics company delivering information systems and services for the aerospace, defense, transportation and security markets...

) in 2000, thereby giving the French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

 firm access to the lucrative UK defence and armaments market.

Foundation

Racal was created in 1950 as Racal Ltd, the name being derived from the partners RAymond Brown and George CALder Cunningham. Ernest Harrison
Ernest Harrison
Sir Ernest Thomas Harrison OBE , was an English businessman, best known as Chief Executive of Racal, and chairman of both Racal and the first chairman of its spun-out mobile division, Vodafone.-Early life:...

 joined the company as employee number 13 as an accountant, but later held the positions of chief buyer, personnel director and contract negotiator. The first factory was located in Isleworth
Isleworth
Isleworth is a small town of Saxon origin sited within the London Borough of Hounslow in west London, England. It lies immediately east of the town of Hounslow and west of the River Thames and its tributary the River Crane. Isleworth's original area of settlement, alongside the Thames, is known as...

, west London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

. On outgrowing this site it moved to Bracknell, Berkshire
Berkshire
Berkshire is a historic county in the South of England. It is also often referred to as the Royal County of Berkshire because of the presence of the royal residence of Windsor Castle in the county; this usage, which dates to the 19th century at least, was recognised by the Queen in 1957, and...

 in 1954, enticed by a 99 year lease at four shillings and sixpence per square foot - and no rent reviews.

Although Racal had won a Royal Navy
Royal Navy
The Royal Navy is the naval warfare service branch of the British Armed Forces. Founded in the 16th century, it is the oldest service branch and is known as the Senior Service...

 contract to build and supply a variant of the American Collins Model 51-J Radio Receiver, they were not granted a licence to build these sets by Collins Inc. This meant that Racal had to design and build a radio receiver from scratch. After almost bankrupting the company thanks to a £40,000 overspend, the result was the famous 'RA17' - in production from 1955 to at least 1973 - designed in cooperation with Dr. Trevor Wadley
Trevor Wadley
Trevor Lloyd Wadley, was a South African electrical engineer, best known for his development of the Wadley Loop circuit for greater stability in communications receivers....

 and utilising his famed Wadley Loop
Wadley Loop
The Wadley Loop circuit was designed by Dr. Trevor Wadley in the 1940s and was first used for a stable Wavemeter.- Overview :In a traditional superheterodyne radio receiver, most oscillator drift and instability occurs in the first frequency converter stage, because it is tunable and operating at a...

circuit.

Racal under Harrison

Harrison joined the company board in 1958, and as deputy managing director from 1961 helped Racal to obtain a Stock Market
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

 listing. Harrison became chairman in 1966, when co-founder Ray Brown was lured away by the Ministry of Defence
Ministry of Defence (United Kingdom)
The Ministry of Defence is the United Kingdom government department responsible for implementation of government defence policy and is the headquarters of the British Armed Forces....

. The major deals he undertook were:
  • Negotiation of a British Army
    British Army
    The British Army is the land warfare branch of Her Majesty's Armed Forces in the United Kingdom. It came into being with the unification of the Kingdom of England and Scotland into the Kingdom of Great Britain in 1707. The new British Army incorporated Regiments that had already existed in England...

     battlefield radio contract (initially Larkspur
    Larkspur radio system
    Larkspur was the name of a tactical radio system used by the British Army. Its development started in the late 1940s with the first equipments being issued in the mid-1950s. It remained in service until replaced by Clansman in the late-1970s although some elements of Larkspur were still in service...

    , later part of Clansman
    Clansman
    Clansman is the name of a combat net radio system used by the British Army from 1976 to 2010.Clansman was developed by the Signals Research and Development Establishment in the 1960s, to satisfy a General Staff Requirement laid down in 1965...

    ) which secured the future of Racal
  • Led the merger between Racal and British Communications Corporation, that bolstered Racal’s radio business
  • Bought Decca in 1980 in competition from General Electric Company plc, the rival British company led by Lord Weinstock
    Arnold Weinstock
    Arnold Weinstock, Baron Weinstock was an English businessman whom The Guardian newspaper called "Britain's premier post-second-world-war industrialist."...

  • Buying the British Rail Telecommunications
    British Rail Telecommunications
    In May 1837 William Fothergill Cooke and Professor Charles Wheatstone entered into a partnership, and on 10th June patented a five-needle telegraph for which five wires were necessary. The telegraph worked by deflecting any two of the needles at the same time to point to any one of 20 letters on...

     network, to form the basis of Racal Telecom
  • Creation and spin-out of Vodafone
    Vodafone
    Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...

  • Stopping the proposed takeover by Williams Holdings by demerging Chubb
    Chubb
    -People:*Basil Chubb, Irish political scientist*Ian Chubb, Vice-chancellor of the Australian National University*Cecil Chubb, previous owner of Stonehenge*Ralph Chubb, British poet*Thomas Chubb, Britist Deist philosopher*Charles Chubb, British ornithologist...

  • Investing in National Lottery
    National Lottery (United Kingdom)
    The National Lottery is the state-franchised national lottery in the United Kingdom and the Isle of Man.It is operated by Camelot Group, to whom the licence was granted in 1994, 2001 and again in 2007. The lottery is regulated by the National Lottery Commission, and was established by the then...

     company Camelot Group
    Camelot Group
    Camelot GroupCamelot is a private limited company, its entire share issue is owned by a single shareholder, as detailed above. are the operators of the UK National Lottery. Camelot Group was awarded the National Lottery franchise in 1993 and was re-awarded the franchise in 2001 and again in 2007...

  • Selling Racal Telecom to Global Crossing
    Global Crossing
    Global Crossing Limited was a telecommunications company that provides computer networking services worldwide. It maintained a large backbone and offered transit and peering links, VPN, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation and...

  • Selling Racal's remaining defence and industrial electronics divisions to Thomson-CSF
    Thomson-CSF
    Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....

     of France
    France
    The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

     for £1.8 billion


Under Harrsion, £1,000 invested in Racal in 1961 would have been worth £14.5million when he retired in 2000. Harrison received an estimated £25 million from the sale of Racal in 2000, and is estimated to have died with an accumulated total wealth of £40million.

Decca Radar

In 1979, Racal bought Decca Radar
Decca Radar
The Decca Company, a British gramophone manufacturer that, as Decca Records, released records under the Decca label, contributed to the British war effort during the Second World War...

 forming Racal-Decca. Racal-Datacom conducted business in the United States.

Vodafone

In 1980, Harrison agreed a deal with Lord Weinstock of General Electric Company plc to allow Racal to access some of GE's tactical battlefield radio technology. Briefing the head of Racal's military radio division Gerry Whent
Gerry Whent
Sir Gerry Arthur Whent CBE was the founder and first chief executive of Vodafone.-Early life:...

 to drive the company into commercial mobile radio, Whent visited GE's factory in Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...

, USA in 1980.

In 1982, Racal's newly formed subsidiary Racal Strategic Radio Ltd under CEO Whent, won one of two UK cellular telephone network licences; the other going to British Telecom The network, known as Racal Vodafone was 80% owned by Racal, with Millicom
Millicom
Millicom International Cellular, also known as Tigo, is a mobile phone network provider in America and Africa. Based in Luxembourg, the company provides mobile services in 14 countries. With operations across Central America, South America, South-east Asia, and Africa, using GSM, CDMA and TDMA on...

 with 15%, and the Hambros Technology Trust
Hambros Bank
Hambros Bank was a British bank based in London. The Hambros bank was a specialist in Anglo-Scandinavian business with expertise in trade finance and investment banking, and was the sole banker to the Scandinavian kingdoms for many years...

 5% respectively. Vodafone was launched on 1 January 1985. Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985. On 29 December 1986, Racal Electronics bought out the minority shareholders of Vodafone for GB£110 million.

In 1988, 20% of Racal Telecom was floated on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

. This would lead to the situation where Racal Electronics was valued at less than its shareholding in Racal Telecom. Harrison demerged Racal Telecom in October 1991, forcing a positive valuation on the rest of Racal (colloquially known in the City
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...

 as "the rump"). Vodafone would later become the largest mobile network in the world and the highest valued company on the FTSE 100. Immediately following the demerger, Williams Holdings
Williams Holdings
Williams Holdings was a major British conglomerate. It was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index.-History:...

 launched a takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...

 bid for Racal. The bid, valued at £740m, failed.

Chubb Security

In 1984, Racal bought Chubb
Chubb Locks
Chubb Locks is a brand name of the Mul-T-Lock subsidiary of the Assa Abloy Group, which manufactures high security locking systems for residential, secure confinement and commercial applications.-History:...

, a security company that manufactured safes and locks. In 1992, Chubb was demerged from Racal and was subsequently taken over by Willams Holdings in 1997 for £1.3bn.

Racal Telecoms

Racal re-established a telecoms division with a major government contract in 1988 and the acquisition of British Rail Telecommunications
British Rail Telecommunications
In May 1837 William Fothergill Cooke and Professor Charles Wheatstone entered into a partnership, and on 10th June patented a five-needle telegraph for which five wires were necessary. The telegraph worked by deflecting any two of the needles at the same time to point to any one of 20 letters on...

 in 1995. This division of the former nationalised industry owned telecoms infrastructure laid across the rail network.

National Lottery

In 1994, Camelot Group
Camelot Group
Camelot GroupCamelot is a private limited company, its entire share issue is owned by a single shareholder, as detailed above. are the operators of the UK National Lottery. Camelot Group was awarded the National Lottery franchise in 1993 and was re-awarded the franchise in 2001 and again in 2007...

 won the franchise to operate the UK National Lottery, Racal had a 22.5% share. After one of the founder shareholders, GTECH, was bought out by Camelot this stake increased to 26.67% which Thales continues to hold.

Break-up

In 1995 Racal expanded its defence businesses with the acquisition of the Thorn Sensors Group from Thorn EMI
Thorn EMI
Thorn EMI was a major British company involved in consumer electronics, music, defence and retail. Created in October 1979 when Thorn Electrical Industries merged with EMI, it was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but it demerged again in...

. In 1998 all of Racal defence businesses were reorganised under Racal Defence Electronics Ltd into Racal Radar Defence Systems, Racal Radio and Racal Thorn.

In October 1999 Racal decided to sell its telecoms business to the American communications group, Global Crossing
Global Crossing
Global Crossing Limited was a telecommunications company that provides computer networking services worldwide. It maintained a large backbone and offered transit and peering links, VPN, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation and...

, for £1bn.

Then in January 2000 Thomson-CSF
Thomson-CSF
Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....

 announced a bid for the Company: Racal became Thomson-CSF Racal plc and later part of Thales plc with the renaming of the larger Thomson-CSF
Thomson-CSF
Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....

 to Thales Group
Thales Group
The Thales Group is a French electronics company delivering information systems and services for the aerospace, defense, transportation and security markets...

.

In December 2008, Racal Acoustics Ltd was acquired by Esterline Technologies, and has become part of their Communications Systems platform.

External links

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