26 July 2021

Cobham makes bid for Ultra Electronics

by Marc Selinger

Cobham and Ultra are based in Dorset and London, respectively. (Getty Images)

Cobham Group has submitted a non-binding offer to acquire fellow UK-based company Ultra Electronics for GBP2.6 billion (USD3.6 billion) in cash, Ultra announced on 23 July.

Ultra said its board is “minded to recommend” the bid to its shareholders but first wants to resolve “other terms and arrangements”, including the establishment of unspecified national security safeguards.

“Accordingly, the board will engage in discussions with Cobham to explore the proposal in further detail,” Ultra said. Ultra wants Cobham to firm up its bid by 20 August, although the “put up or shut up” deadline could be extended.

Cobham said in a statement that it welcomes Ultra's announcement. “Cobham continues to see strong industrial logic to the combination,” the statement says.

The news came less than a month after Cobham revealed it was considering a possible combination with Ultra to create a “global defence electronics champion”. “Ultra and Cobham both have long heritage as innovators, and share advanced complementary capabilities delivering mission-critical solutions to the US, UK, and other key allies,” Cobham said on 25 June.

Ultra, which is listed on the London Stock Exchange, said it received Cobham's initial offer of GBP28 per share on 29 June. The latest offer is for GBP35.16 per share, including an interim dividend of 16.2 pence per share that Ultra announced on 19 July.

Cobham has been aggressively remaking itself since it was acquired by US private equity firm Advent International in January 2020 for GBP4 billion. It has divested much of its portfolio, including air-to-air refuelling systems business Cobham Mission Systems (CMS), antenna and radio manufacturer Cobham Aerospace Connectivity (CAC), and Cobham training provider Aviation Services UK.

Cobham Group has submitted a non-binding offer to acquire fellow UK-based company Ultra Electronics ...

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