Having made a name for itself by pioneering air-to-air refueling technology and its technology also found on Airbus jets as well as F-35 fighters, British company Cobham is to be acquired by American private equity group Advent International for £4 billion (US$5 billion). The offer equates to 165 pence in cash for each share in the aerospace company, a 50.3% premium on its average share price over the last three months.
News of the deal saw shares jump early on to 165.95 pence. It was back in 2016 and 2017 that Cobham was rocked by a series of profit warnings which saw it forced to raise cash from its shareholders, after which company Chief Executive David Lockwood embarked on a turnaround strategy which focused on improving the company’s financial and operating performance.
“This offer reflects the potential for future growth and improving performance and is an endorsement of our turnaround strategy and our hard-working people,” Lockwood said, commenting on the deal. His plan was initially hampered by problems with Boeing’s troubled KC-46 aerial refueling program, but he remarked that the company’s free cash flow was better than expected after a £48.7 million settlement of the issue.
Cobham posted organic revenue growth of 11% to £1.03 billion and a 12% rise in underlying operating profit to £107.1 million in the half year to June 30. Cobham also said it had started a strategic review of its aviation services business in Australia. (£1.00 (100 pence) = US$1.25 at time of publication.)
