American private equity firms Veritas Capital and Evergreen Coast Capital have agreed to acquire US-based Cubic Corporation in a USD2.8 billion deal that will convert the publicly traded company into a private entity, Cubic announced on 8 February.
Cubic is based in San Diego, California. (Credit: Cubic)
Ramzi Musallam, CEO and managing partner of Veritas, said his firm plans to use its expertise in the government technology market to “accelerate product development and drive growth” at Cubic, which works in defence and transportation.
Bradley Feldmann, Cubic’s chairman, president, and CEO, said Cubic shareholders will receive a “significant premium”, and the business will gain a “premier, deeply experienced partner” to help fuel its growth.
Under the deal, which is expected to close in the second quarter of 2021, Cubic will remain headquartered in San Diego, California. The company has 6,300 employees in 17 countries.
“The transaction is expected to be seamless for customers and employees across Cubic’s businesses,” the announcement said.
Cubic first disclosed in September 2020 that outside parties were expressing interest in acquiring the company. Under the Veritas-Evergreen deal, Cubic shareholders will receive USD70 in cash per share, which represents a 58% premium on Cubic’s closing stock price the day before the company made that disclosure.
Cubic’s defence segment, Cubic Mission and Performance Solutions (CMPS), had sales of USD121.7 million in the first quarter of fiscal year (FY) 2021, down 13% from the same period in FY 2020, Cubic revealed on 8 February. Cubic attributed the decline mainly to reduced work on an air-training programme in the Far East, and to lower orders and deliveries of communications products.
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