Horne International has terminated its acquisition of Amata Inc., citing Amata’s failure to collect outstanding receivables from its largest customer, Pacific Texas Partners.

Engineering firm Horne also said Amata’s business operations, financial condition, and prospects have deteriorated significantly over the past several months. Horne said it is trying to collect funds advanced to Amata under terms of the parties’ stock purchase agreement.

In January Horne agreed to acquire all outstanding stock of Amata, which installs security systems at airports, power plants, and military facilities, for $2 million in cash and subordinated promissory notes worth an aggregate $1.75 million. The notes would have been payable on March 1, 2008, and January 1, 2009.

Under the deal, Amata shareholders would have been entitled to cash earn-out payments equaling 50 percent of Amata’s net income on a cash-received basis for the first 12 months after the closing, and 33 1/3 percent of net income for the subsequent 36-month period.

Amata shareholders also were to get up to 13 million shares of Horne common stock after the closing. In addition, Horne was to pay contracted consultants to Amata up to about $6.8 million contingent on Amata’s achievement of earn-out payments.

The transaction was subject to Amata’s receipt of about $2.4 million in outstanding accounts receivable from Pacific Texas.

In June 2007, Amata announced a $152 million contract to provide Pacific Texas with an electronic security system, electrical distribution, and generator backup for two major pipelines and four tank farms. The two-year project spanned 900 miles of pipeline, with the Pacific Texas Products Pipeline running from El Paso, Texas, to Phoenix, and the Havasu Products Pipeline extending from Phoenix to Las Vegas.

Under the stock purchase agreement, any party not in breach had the right, beginning June 30, to terminate it.