19th Dec 2007 09:46
Cobham PLC19 December 2007 #22919 December 2007 COBHAM REACHES AGREEMENT TO PURCHASE US SURVEILLANCE AND ATTACK BUSINESS FOR US$240 MILLION Cobham plc ('Cobham') is pleased to announce that it has reached agreement topurchase the Surveillance and Attack business unit of BAE Systems Inc ('BAESystems') for a cash consideration of US$240 million on a debt and cash freebasis payable on completion. The goodwill arising on completion is an allowabletax expense with an estimated net present value of US$45 million, resulting inan effective price of US$195 million. The acquisition is expected to complete inthe first quarter of 2008, subject to regulatory approval. On completion, theunit, which is based in Lansdale, Pennsylvania, USA, will be renamed Sensor andAntenna Systems, Lansdale Inc ('Lansdale'). Information on the Business Lansdale is a world leading developer of Electronic Warfare ('EW') technologyand supplier of EW subsystems for military aircraft. The equipment is usedprimarily for stand-off radar and communication jamming and also self-protectionradar warning on US Military aircraft. Products include high power transmitters,antennas, integrated microwave assemblies, control electronics and subsystems,which are currently used on fixed wing military platforms including the F-16,F-18, EA-6B, EA-18G, V-22 and on rotary military platforms such as the MH-47 andMH-60. Lansdale employs approximately 400 people, including some 90 engineers.The acquisition brings with it a strong management team who will stay withLansdale. Rationale and benefits of the acquisition The acquisition is consistent with Cobham's stated strategy of increasingshareholder value through organic growth and selective, value enhancingacquisitions within the Aerospace and Defence sector. The acquisition is highly complementary to the existing Cobham DefenceElectronic Systems ('CDES') US microwave business, bringing additional subsystemproduct and design resource. It will be operated under the existing SpecialSecurity Agreement with the US Department of Defense. The acquisition will accelerate Cobham's plans to establish itself as a premierRF (radio frequency) front-end subsystem company. In addition, the MonolithicMicrowave Integrated Circuit technology and antenna expertise existing withinCDES, particularly within the REMEC Defense and Space business, is highlycomplementary and will benefit Lansdale and provide new opportunities for growthin this area. The acquisition significantly enhances Cobham's ability to developproducts that meet the large and growing worldwide market for C4IEWSR equipment(Command, Control, Communications, Computers, Intelligence, Electronic Warfare,Surveillance and Reconnaissance) while also both deepening and diversifyingCobham's customer and platform base. Additional investment on product development, technology and marketing isplanned to fully exploit the growth potential of Lansdale. It is anticipatedthat Lansdale will grow in line with the rest of the Sensor and Antenna Systemsbusiness over the medium term. Financial Information For the year ended 31 December 2006, the Business generated operating profits ofUS$14 million on revenue of US$91 million. At 30 September 2007, gross assetswere approximately US$34 million. The effective price represents a multiple ofapproximately 11.1x 2006 EBITDA. It is expected that the acquisition will beearnings enhancing in 2008. Allan Cook, Cobham Chief Executive, said:"This acquisition greatly accelerates our development into antenna front-endsubsystems as well as the defence electronics attack market. Lansdale, with itsestablished subsystem capabilities and positions on a number of important fixedand rotary wing aircraft, is an excellent fit with our strategy." - ends -ENQUIRIES Cobham plcAllan Cook, Chief Executive +44 (0)1202 882020Warren Tucker, Group Financial Director +44 (0)1202 882020Julian Wais, Director of Investor Relations +44 (0)1202 857998Julian Hellebrand, Group Director of Communications +44 (0)1202 857651 Weber Shandwick FinancialSusan Ellis/Louise Robson +44 (0)20 7067 0700 NOTES 1. Cobham plc is an international company engaged in the development, deliveryand support of advanced aerospace and defence systems for land, sea and airplatforms. The Company specialises in the provision of components, sub-systemsand services that keep people safe, improve communications and enhance theperformance of aerospace and defence platforms. 2. Cobham Defence Electronic Systems (CDES) designs and manufactures microwavecomponents, integrated assemblies and sub-systems for the US Department ofDefense and other military and government customers around the world. It is aleading developer of all classes of air, ground and shipboard antennasub-systems, positioners, radomes, high-power microwave components andintegrated assemblies, and is the market leader for many niche microwaveproducts. CDES is also the world leader in advanced tactical military vehicleintercom systems and soldier and ground vehicle situation awareness products. Nothing in this press release should be construed as a profit forecast or beinterpreted to mean that the future earnings per share of Cobham willnecessarily be the same as, or greater than, the earnings per share forcompleted financial periods. This document contains 'forward-looking statements' with respect to thefinancial condition, results of operations and business of Cobham and to certainof Cobham's plans and objectives with respect to these items. Forward-looking statements are sometimes but not always identified by their useof 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 inherentlyunpredictable, speculative and involve risk and uncertainty because they relateto events and depend on circumstances that may or will occur in the future. There are various factors that could cause actual results and developments todiffer materially from those expressed or implied by these forward-lookingstatements. These factors include, but are not limited to, changes in theeconomies, political situations and markets in which the Group operates; changesin government priorities due to programme reviews or revisions to strategicobjectives: changes in the regulatory or competition frameworks in which theGroup operates; the impact of legal or other proceedings against or which affectthe 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 madesubsequently, which are attributable to Cobham or any other member of the Groupor persons acting on their behalf are expressly qualified in their entirety bythe factors referred to above. Cobham does not intend to update theseforward-looking statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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