LONDON May 20 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)