Ultra Electronics Holdings plc, which designs mission-critical solutions mainly in military and commercial aerospace at its base at Arle Court in Cheltenham, is being bought by defence industry counterpart, Cobham.
The deal values Ultra at £2.6 billion takeover by Cobham, or rather Cobham Ultra Acquisitions Limited – a wholly-owned indirect subsidiary of Cobham Group Holdings Limited.
While Ultra has its headquarters in London, In Cheltenham Ultra Precision Control Systems (PCS) provides high integrity control products for aerospace, military vehicle and soldier applications.
Its capabilities span the complete product lifecycle; design, development, production and support. It has more than 50 years of experience in the industry and include most of the world’s aircraft manufacturers, hundreds of airlines, and many of the world’s largest defence contractors in our list of customers.
Shonnel Malani, Chairman of the Cobham Group, said: “We believe Cobham and Ultra’s complementary capabilities delivering mission critical technology will be significantly enhanced through the combination of the two groups, enabling the development of higher performance solutions for our customers.
“We recognise the important role that a combined Cobham and Ultra will play in ‘five-eyes’ defence and are committed to protecting the continuity of supply to the UK and our allies. We look forward to working with HM Government, and other relevant stakeholders, to agree legally binding commitments which safeguard Ultra’s contribution to the UK economy and national security.”
Tony Rice, Chairman of Ultra, said:”The Ultra Board is confident of Ultra’s future prospects as an independent listed company and its ability to deliver excellent and sustainable value for all its stakeholders. The Ultra Board is also extremely pleased with the excellent progress that the management team is making on executing the ONE Ultra strategy and the Focus; Fix; Grow transformation programme. This was clearly recognised and part of the rationale behind Cobham’s interest in Ultra and enabled the Ultra Board to review Cobham’s unsolicited approaches from a position of strength.
“In considering Cobham’s various approaches, the Ultra Board reviewed the Ultra Group’s strategic plans and financial projections in detail, as well as comparative trading and transaction multiples. The Ultra Board recognises the very significant premium to Ultra’s undisturbed share price and to its all-time high share price. The offer price compares favourably to the current value of Ultra’s risk adjusted future financial performance and also recognises the remarkable value creation that has taken place under current management. The Ultra Board has also spent considerable time reviewing the potential impact of Cobham’s ownership on Ultra’s stakeholders and is comfortable that their stakeholder commitments plus legally binding undertakings to HM Government will protect stakeholder interests appropriately. The Ultra Board therefore unanimously intends to recommend the Cobham offer to shareholders.”
Simon Pryce, Chief Executive Officer of Ultra, added: “Today’s offer from Cobham reflects the significant progress and value that has been created by the whole Ultra team from our ONE Ultra strategy and from the progress we are making on our Focus; Fix; Grow transformation. The team should be very proud of what they have achieved so far.
“This combination will enhance Ultra’s prospects through Cobham’s stated intentions to accelerate our transformation, invest in our technology, and to continue to support our customers, operations, communities, and most importantly our talented and committed people.
“The combination will also create a defence electronics business of greater scale, bringing together two businesses with complementary technology, design, engineering and manufacturing capabilities, which we believe will enable the delivery of a broader range of integrated, cost competitive and high performance solutions across a wider range of platforms, benefitting our mutual customers and wider stakeholders.”