Cobham to Purchase BAE Systems US-based Surveillance and Attack Business
Cobham plc announced that it has reached agreement to purchase the Surveillance and Attack business unit of BAE Systems Inc. for a cash consideration of US$240 M on a debt and cash free basis payable on completion. The acquisition is expected to complete in the first quarter of 2008, subject to regulatory approval. On completion, the unit, which is based in Lansdale, PA, will be renamed Sensor and Antenna Systems, Lansdale Inc.
BAE Systems Surveillance and Attack (Lansdale) is a leading developer of electronic warfare (EW) technology and a supplier of EW subsystems for military aircraft. The equipment is used primarily for standoff radar and communication jamming and also self-protection radar warning on US military aircraft. Products include high power transmitters, antennas, integrated microwave assemblies, control electronics and subsystems, which are currently used on fixed wing military platforms including the F-16, F-18, EA-6B, EA-18G, V-22 and on rotary military platforms such as the MH-47 and MH-60. BAE Systems Lansdale employs approximately 400 people, including some 90 engineers. The current management team is expected to stay in place after the Cobham acquisition.
Cobham said the acquisition is consistent with its stated strategy of increasing shareholder value through organic growth and selective, value enhancing acquisitions within the aerospace and defense sector. The acquisition is highly complementary to the existing Cobham Defence Electronic Systems (CDES) US microwave business, bringing additional subsystem product and design resource. It will be operated under the existing Special Security Agreement with the US Department of Defense.
“This acquisition greatly accelerates our development into antenna front-end subsystems as well as the defense electronics attack market,” said Allan Cook, Cobham’s chief executive officer. “Lansdale, with its established subsystem capabilities and positions on a number of important fixed and rotary wing aircraft, is an excellent fit with our strategy.” The acquisition is expected to further Cobham’s plans to establish itself as a premier RF (radio frequency) front-end subsystem company. Cobham said the expertise in monolithic microwave integrated circuit technology and antenna expertise existing within CDES, particularly within the REMEC Defense and Space business, will benefit Lansdale and provide new opportunities for growth in this area. Additional investment on product development, technology and marketing is planned to fully exploit the growth potential of Lansdale. It is anticipated that Lansdale will grow in line with the rest of the Sensor and Antenna Systems business over the medium term.
The acquisition also is expected to significantly enhance Cobham’s ability to develop products that meet the large and growing world-wide market for command, control, communications, computers, intelligence, electronic warfare, surveillance and reconnaissance (C4IEWSR) equipment, while also both deepening and diversifying Cobham’s customer and platform base.