UK-based aerospace group Cobham is to pay $260 million to acquire US defence communications and radar specialist Remec Defense & Space in a deal that will double turnover at the company's avionics and communications subsidiary Chelton Microwave.
The deal is Cobham's largest-ever acquisition and follows the purchase of several US businesses over the last year. Chief executive Allan Cook says the company has more deals in the pipeline.
"We believe the biggest growth opportunities exist in the USA, and in the microwave area," he adds.
The deal will help Chelton to grow through involvement inUS defence programmes. "Remec Defense has established positions on a number of key long-term US Department of Defense programmes and will provide a significant contribution to Cobham's growth going forward," says Cook.
The deal is Cobham's eighth acquisition this year, with an estimated total spend of £190 million ($365 million). In 2003 it acquired 13 businesses for a total of £150 million, compared with five acquisitions totalling £33.1 million the previous year.
Despite the problems caused when US revenue and earnings are converted back into sterling, the weak dollar makes US acquisitions an attractive prospect for UK companies, says Cook. More importantly for Cobham, the deal is in the right area to fit in with its strategic growth strategy.
After the merger with Chelton, Remec Defense & Space willcontinue to operate under the same name and from its San Diego, California headquarters.
Source: Flight International
