OSI Systems [OSIS] Rapiscan division this month announced two large contracts, one with Puerto Rico’s Ports Authority for a turnkey cargo inspection service and another with an airport operating group in Mexico for high-speed hold baggage X-Ray systems, that combined are worth tens of millions of dollars and maybe more. The 10-year contract with the Puerto Rico Ports Authority (PRPA), which contains two five-year options, calls for Rapiscan to provide a service solution to scan all containerized inbound cargo at the Port of San Juan using multiple Eagle high-energy X-Ray systems at various port locations. Analysts put the potential value at between $100 million and $300 million for the first 10 years. The award represents a new business model for Rapiscan that stems from a strategic acquisition in 2008 of S2 Global, allowing the company to offer turnkey scanning services on a fee per scan basis (TR2, Jan. 7, 2009). “To fulfill the PRPA’s stringent technical and logistical requirements for this ground-breaking project, we have designed a fast, efficient and comprehensive solution based on our operations expertise and our state-of-the-art Rapiscan Eagle high-energy X-Ray systems through the company’s newly initiated Screening Solutions Business, S2 Global,” says Deepak Chopra, OSI Systems CEO. Dougherty Markets analyst Josephine Millward, who pegs the potential revenue opportunity at around $200 million over 10 years, says the business model is attractive for the customer because it requires no upfront cash investment and provides Rapiscan a recurring revenue stream with high margins. Stephens Inc. analyst Tim Quillen, who says the award is “a big deal,” also likes the recurring revenue and high markings and believes Rapiscan will win more contracts like this over time. The $35 million contract with Mexico’s Grupo Aeroportuario del Pacifico, which operates 12 airports, calls for the construction and installation of baggage handling systems integrated with Rapiscan’s MVXR5000 high-speed multi-view X-Ray hold baggage X-Ray systems. The project is expected to be completed this year.