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Defence giant Cobham agrees £4bn US private equity takeover | Business News

By September 16, 2019 No Comments
Defence and Aerospace group Cobham

US private equity firm Advent International has won its battle to buy defence and aerospace group Cobham for $5bn (£4bn), joining a growing list of overseas suitors taking advantage of the weak pound to pick up highly-rated British companies.

Cobham chairman Jamie Pike told a shareholder meeting on Monday that management had “pushed as hard as they could push” and engaged in some “arm wrestling” before finally settling on a price that marked a 50% premium to the three-month average share price before the deal was announced.

The deal was agreed at 165p per share, in the latest of a series of British buyouts in as private equity firms seek new targets for their bumper cash balances.

The stock was trading up at nearly 1% at around 161p for most of the day.

The takeover was supported by 93.22% of shareholder votes.

Cobham, based in Wimborne Minster, Dorset, is latest European company to be bought by a private equity
firm seeking a home for their surplus cash reserves.

The group, which employs 10,000 people to make its pioneering air-to-air refuelling system and communications for military vehicles, has faced difficulties in recent years.

Cobham is recovering from a string of profit warnings in 2016 and 2017, which forced it to raise cash from shareholders.

Chief executive David Lockwood embarked on a turnaround strategy more than two years ago to improve financial and operating performance.

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Advent has a track record in buying British technology, having snapped up electronics company and Apple and Samsung component suppler Laird for $1.65bn (£1.47bn) last year.

Cobham CEO Lockwood was Laird’s chief executive between 2012 and 2016.

He told Monday’s meeting that it was highly unlikely he will stay at Cobham, but has yet to discuss the matter with Advent.

Launched in the 1930s, Cobham came to the fore ahead of World War Two and again during the 1982 Falklands conflict.

Its technology is now used in aircraft such as the F-35 Joint Strike Fighter and Eurofighter Typhoon, as well as advanced naval vessels, satellites and military vehicles.

Media reports have said previously that the Cobham family had opposed the deal and made this clear to its biggest investors.

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