31st Mar 2009 07:00
31 March 2009
Ref: 0277
COBHAM COMPLETES SALE OF M/A-COM TECHNOLOGY SOLUTIONS FOR UP TO US$90 MILLION
At the time of the acquisition of M/A-COM on 13 May 2008, Cobham plc ('Cobham' or 'the Group') announced that it planned to divest the commercial business segment, M/A-COM Technology Solutions ('MTS'), as it was not core to the Group's strategy. Excluded from the sale are cash and the freehold of the Walker Building in Lowell, Massachusetts valued at $10 million.
Following the completion of the transaction on 26 September and a thorough auction process, Cobham is pleased to announce that it has sold MTS to John Ocampo who is the owner of GaAs Labs, a semi-conductor private equity fund based in California for $30 million in cash, $30 million in senior loan notes secured on the MTS assets and $30 million dependent on future revenue in the period 2010 to 2012. The loan notes carry a rate of interest of 7.5%, which increases over time, and they are repayable in two equal tranches in December 2011 and 2012. There are no conditions to closing and the transaction has been completed.
As previously indicated, in the year ended 30 September 2007 MTS recorded revenue of some $275 million and operating profit of less than $10 million. Given significant reductions in end market demand and the fact that Cobham has retained the MTS cash, the business may need working capital and, if required, Cobham will make available a twelve month secured credit facility for up to $12 million.
It is estimated that there will be no gain or loss on sale.
Given the completed divestment, Cobham now estimates that the effective multiple paid for the retained Aerospace and Defence segment to be 10.5x 2008 EBITDA. M/A-COM remains a value enhancing acquisition and is a critical part of Cobham's microwave subsystem strategy.
Warren Tucker, Cobham's Chief Financial Officer, said:
"Cobham has sold MTS in the face of difficult market conditions and this allows us to focus on our core business. Despite the reduction in valuation multiples and credit availability, we are pleased to have achieved a sensible economic outcome and to have placed MTS in the hands of owners who are specialists in the industry."
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ENQUIRIES
Cobham plc
|
Allan Cook, Chief Executive Warren Tucker, Chief Financial Officer Julian Wais, Director of Investor Relations Julian Hellebrand, Group Director of Communications Weber Shandwick Financial Susan Ellis/James White |
+44 (0)1202 882020 +44 (0)1202 882020 +44 (0)7720 999764 +44 (0)1202 857651 +44 (0)20 7067 0700 |
NOTES
Cobham's products and services have been at the heart of sophisticated military and civil systems for more than 70 years, keeping people safe, improving communications and enhancing the capability of land, sea, air and space platforms. The Company has four divisions employing more than 12,000 people on five continents, with customers and partners in over 100 countries and annual revenues of more than £1bn.
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