An Ultra Electronics building in Rugeley, UK. (Ultra Electronics)
Ultra Electronics' board of directors has approved Cobham Group's previously disclosed takeover bid for GBP2.6 billion (USD3.6 billion) in cash, moving the two companies a step closer towards forming a larger defence electronics business, Ultra announced on 16 August.
With the companies supplying equipment to many of the same military platforms, including the Lockheed Martin F-35 Joint Strike Fighter and the Boeing P-8A Poseidon maritime patrol aircraft, Cobham and Ultra expect that joining forces will allow them to deliver more integrated and higher-performance products.
“Cobham sees strong industrial logic for a combination with Ultra, which will facilitate accelerated revenue growth in both businesses, expansion on current shared platforms and programmes, and wins on combined enhanced positions on platforms and programmes of the future,” Ultra's announcement said.
Ultra said that the parties have ironed out the terms and conditions of the proposed transaction, which was first revealed in late July. Among the provisions is a commitment by Cobham, which is owned by US private equity firm Advent International, to work with the UK government to protect the UK's economy and national security.
Ultra's board “spent considerable time reviewing the potential impact of Cobham's ownership on Ultra's stakeholders and is comfortable that their stakeholder commitments plus legally binding undertakings to [the UK] government will protect stakeholder interests appropriately”, Ultra chairman Tony Rice said.
The acquisition is slated to close in the first quarter of 2022 following the approval of regulators and Ultra's shareholders. Within the next four weeks, Ultra plans to share more transaction details with its shareholders, including a date for them to vote on Cobham's offer.
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