29th Sep 2008 07:00
RNS Number : 5018E
Cobham PLC
29 September 2008
29 September 2008
Ref: 0262
COBHAM COMPLETES PURCHASE OF M/A-COM, A GLOBAL LEADER IN MICROWAVE SYSTEMS FOR US$425 MILLION
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.”
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ENQUIRIES
Allan Cook, Chief Executive +44 (0)1202 882020
Warren Tucker, Chief Financial Officer +44 (0)1202 882020
Julian Wais, Director of Investor Relations +44 (0)1202 857998
Julian Hellebrand, Group Director of Communications +44 (0) 1202 857651
Weber Shandwick Financial
Susan Ellis/James White +44 (0)20 7067 0700
Notes
1. Cobham plc is an international company engaged in the development, delivery and support of advanced aerospace and defence systems for land, sea and air platforms. The Company specialises in the provision of components, sub-systems and services that keep people safe, improve communications and enhance the capability of aerospace and defence platforms.
2. Cobham Defence Systems Division designs and manufactures critical technology for network centric and intelligence operations, enabling information to be moved around and managed on the digital battlefield.
The Division specialises in RF and microwave front ends for radar, communication and electronic warfare systems, providing components, integrated assemblies and subsystems for military aircraft, ground vehicles, missiles, naval vessels, space launch vehicles and satellites.
A comprehensive range of scientific, systems engineering and technical assistance services are provided to the intelligence and missile defence market, including training, testing and evaluation services for US tactical systems, including supportability analysis and training for Unmanned Aircraft Systems programmes.
The Division is also the world leader in advanced tactical military vehicle intercom systems and soldier and ground vehicle situation awareness products and supplies niche, high technology products for the commercial aerospace and civilian markets, including air traffic control and weather radars.
3. M/A-COM Technology Solutions comprises a number of products including integrated circuit, power transistors and diode segments within the semiconductor market for use in wireless communications and industrial/medical, military and consumer applications, infrastructure/components for wireless applications such as cellular base stations and WiMAX infrastructure using RF, microwave and semiconductor based components and RF identification components for use in inventory management and asset tracking applications.
Nothing in this press release should be construed as a profit forecast or be interpreted to mean that the future earnings per share of Cobham will necessarily be the same as, or greater than, the earnings per share for completed financial periods.
This document contains ‘forward-looking statements’ with respect to the financial condition, results of operations and business of Cobham and to certain of Cobham’s plans and objectives with respect to these items.
Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as ‘anticipates’, ‘aims’, ‘due’, ‘could’, ‘may’, ‘should’, ‘expects’, ‘believes’, ‘intends’, ‘plans’, ‘targets’, ‘goal’, or ‘estimates’. By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future.
There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives: changes in the regulatory or competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of acquisitions and divestitures and changes in exchange rates.
All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements.
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