This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cobham Transmits $1.5B Deal for Aeroflex

NEW YORK (The Deal) -- Acquisitive U.K. aerospace company Cobham on Tuesday, May 20, agreed to buy Plainview, N.Y-based Aeroflex Holding (ARX) for $1.46 billion in cash and debt to further expand its communications business and offer new markets for the target's products.

Cobham, of Wimborne, England, said it would pay $10.50 per Aeroflex share, a 26.1% premium to the stock's Monday close. The buyer will also absorb Aeroflex's $540 million in liabilities.

"The acquisition is consistent with the Cobham strategic objective of building and maintaining leading positions in selected higher growth, high technology commercial segments," the company said.

The Aeroflex board is recommending shareholders accept the offer and Cobham already has the approval of financial investors who hold 76.3% of Aeroflex's shares. The investors include Veritas Capital Partners LLP, Golden Gate Private Equity Inc. and GS Direct LLC.

Must Read: Treasury Wine Fizzes After KKR Bid

The offer is worth 10.5 times expected 2014 Ebitda and will bring Cobham a company with revenue for the year ended June 30 of $439.3 million. In its last fiscal year, Aeroflex had operating profit of $58.6 million.

Cobham said the deal would boost its business in providing communication systems to the defense, aerospace and energy industries and yield $85 million in annual savings. The deal fits with its acquisition a year ago of wireless communications component maker Axell Wireless Ltd. and its 2012 purchase of Thrane & Thrane A/S.

It announced the Axell deal last May, and said it would pay as much as 85 million pounds ($143 million) depending on how the unit performed through 2015. In May 2012 it capped a year of talks with Thrane & Thrane with a 2.62 billion Danish Kronor ($480.5 million) agreement to buy the Danish satellite communications company.

Tuesday's agreement carries a breakup fee of $32 million. Cobham said it would initially finance the deal through a $1.3 billion bridge loan from Bank of America Merrill Lynch and Royal Bank of Scotland Group plc. It plans to sell new shares equivalent to 6% of its share capital.

UBS would manage the share sale.

The deal is expected to close in the third quarter and contribute to earnings beginning in 2015.

Cobham shares gained 1%, or 3.40 pence, in early London trading to 315.60 pence.

For financial advice, Cobham turned to Bank of America Merrill Lynch's Ian Ferguson, Chris Squire and Peter Luck and Citigroup Global Markets Inc.'s Kevin Cox.

Goldman, Sachs & Co. and Stifel, Nicolaus & Co. are acting as financial advisers to Aeroflex, with Schulte Roth & Zabel LLP and Richards Layton & Finger P.A. its law firms.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ARX $10.50 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs