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Aerospace giant Cobham to buy US firm Aeroflex for £548m
DORSET-based aerospace giant Cobham PLC has agreed the biggest deal in its history with an agreement to buy a leading US company.
Cobham will acquire Aeroflex Holding Corp, based in Plainview, New York, for 1.46billion US dollars, £548m.
Aeroflex makes microelectronic components and test and measurement equipment in industries including of space, avionics, defence, commercial wireless communications and medicine.
Its motors and wireless systems are used in the wheels, antenna and robotic arm joints of Nasa’s Mars rover, Curiosity.
The deal includes taking on Aeroflex’s £321m in debt. Cobham will pay 10.50 US dollars per Aeroflex share, 26.1 per cent more than the closing stock price on Monday (MAY 19), the day before the announcement.
Cobham Chief executive Bob Murphy said the deal was in line with its strategy of buying firms in industries that "increasingly demand more data, connectivity and bandwidth."
The deal comes after Cobham bought Danish satellite telecoms group Thrane & Thrane for £275m in 2012 and Axell Wireless for up to £85m last year.
It has been trying to expand into commercial markets to make up for declining defence spending from US and European governments.
Aeroflex, founded in 1937, employs 2,600 people and has a wireless and microwave testing plant in Stevenage. It sells 4G technology and is developing 5G networks for the next generation of smartphones and tablets.
Len Borrow, CEO of Aeroflex, said: “This all-cash, premium transaction provides significant and immediate value to our stockholders.
“We believe Aeroflex and Cobham are a natural fit and that Aeroflex will benefit from the larger scale market presence and resources of the combined organisation. We look forward to working with Cobham to ensure a seamless integration for our teams and customers around the world.”
The acquisition is subject to regulatory approvals in the US and the approval of stockholders in both companies. It is expected to be finalised in the third quarter of 2014.
Cobham, whose head office is in Brook Road, Wimborne, currently employs 11,000 people on five continents and boasts a £2.4bn order book.
It is a market leader in air-to-air refuelling, aviation services, audio, video and data communications, defence electronics, life support and mission equipment.
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