UK's Cobham to buy Aeroflex for about $1.46 billion
LONDON May 20 (Reuters) - British aerospace and defence supplier Cobham said it would buy U.S. communications equipment maker Aeroflex Holding Corp for $1.46 billion and would place shares to help fund the acquisition.
Cobham said on Tuesday it had agreed to pay $10.50 per share in cash for Aeroflex, which makes components and systems used in broadband and wireless communications. This represents a 26 percent premium to Aeroflex's Monday closing price on the New York Stock Exchange.
"This transaction is a compelling strategic fit for us on a number of fronts, bringing together two high technology businesses with complementary capabilities, customers and characteristics," Cobham's Chairman John Devaney said.
Cobham said it expects the deal to yield annualised run rate cost synergies of approximately $85 million for a total investment of $215 million. On a proforma basis, it said, Aeroflex would comprise approximately 17 percent of the enlarged group's consolidated revenue.
It expects the Aeroflex acquisition to be significantly accretive to underlying earnings in 2015 and assuming completion late in the third calendar quarter of 2014, to have a broadly neutral impact on underlying earnings in the third year.
Cobham, which has previously said that it was hunting for more purchases in the communications sector after buying Axell Wireless last year, said it would place about 65 million shares of 2.5 pence each - representing about 6 percent of its share capital - to help fund the acquisition.
(Reporting by Brenda Goh; editing by Kate Holton)
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