Articles
RSSCobham Completes Purchase Of M/A-COM
October 3, 2008
Further to the announcement of 13 May 2008, Cobham plc (‘Cobham') has completed the purchase of the M/A-COM RF components and microwave subsystems business for US$425 million in cash, with an effective price of US$380 million after an allowable tax expense relating to goodwill amortisation. M/A-COM, one of the largest Original Equipment Manufacturers (‘OEMs') of microwave subsystems in the world, will be integrated into the Cobham Defence Systems (‘CDS') Division and will operate under Cobham's existing US Special Security Agreements.
In the year ended 30 September 2007, M/A-COM's aerospace & defence business comprised around 40% of its total revenue of US$477.7 million and, due to its higher margins, more than 70% of its total operating profit of US$37.9 million. The aerospace and defence business is highly complementary to the CDS Division and will bring accelerated development of advanced products with additional microwave technical expertise, enhanced subsystem capability and strong customer relationships. Cobham's active microwave capabilities and operations will be enhanced significantly by combining M/A-COM's technology with Cobham's REMEC business, offering customers high performing RF and microwave front ends for missiles, electronic warfare and space systems. M/A-COM's signals intelligence and antenna capabilities will be run with Cobham's existing Sensor and Antenna Systems business as they bring complementary radar and communications technology plus additional electronic intelligence expertise.
The acquisition is consistent with Cobham's stated strategy of increasing shareholder value through organic growth and selective, value enhancing acquisitions which build on existing strengths, key technologies and selected positions in aerospace and defence markets. The acquisition will be earnings enhancing in 2008.
The more commercial part of the business, M/A-COM Technology Solutions, is non-core to Cobham. It will be run outside of Cobham's operating divisions and will be held as an asset for resale. Work has progressed well to ensure that the acquired business can operate on a standalone basis with shared facilities and functions separated to allow for the divestment of M/A-COM Technology Solutions. As the acquisition has now been completed, an information memorandum will be sent to potential acquirers today.
Allan Cook, Cobham Chief Executive, said: "With the acquisition of Sensor and Antenna Systems, Lansdale and SPARTA already completed this year and now M/A-COM, our Defence Systems Division has proforma revenue of US$1.2 billion. This Division is well-positioned in a growing market and is at the heart of our strategy, providing its customers with very high end and much sought after active microwave and antenna subsystems technology."
SOURCE: Cobham Sensor Systems
