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Cobham nears largest-ever acquisition
By Guy Anderson
17 January 2008
Cobham has announced that it intends to acquire US systems engineering specialist Sparta Inc for USD416 million.
The deal represents the UK group's largest deal to date and is intended to make Cobham a "significant Tier 2 business" in the United States.
The purchase - which remains subject to regulatory and shareholder approval - was revealed to investors on 16 January and is expected to close in the second quarter of the year. It marks Cobham's fourth US deal since 2007.
Allan Cook, chief executive of the UK group, said purchasing Sparta will "provide Cobham with a ... platform for growth in the Systems Engineering and Technical Assistance segment, which is complementary to our existing US intelligence and defence capabilities".
Washington DC-based Sparta returned sales of USD297.3 million for the 12 months to 2006, with an operating profit of USD28.6 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of USD34.3 million. "It is expected that the acquisition will be earnings enhancing in 2008," said Cobham.
The group provides "a range of scientific, systems engineering and technical assistance services" and is expected to enhance the buyer's position in terms of the US intelligence and missile defence markets.