Sponsored by SPX Communication Technologies (TCI & ECS)
www.tcibr.com
www.enterprisecontrol.co.uk
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21 May 25. Blackstone launches $2.5bn Clarion Events sale as M&A sentiment rebounds. Blackstone has initiated the sale process for Clarion Events, aiming to capitalise on improving market sentiment after a prolonged period of global dealmaking disruption. The events group, which Blackstone acquired in 2017 for £600m ($802m), is now being marketed to potential buyers, including CVC, KKR, PAI Partners, Ardian, and Hillhouse Investment, according to sources familiar with the matter. Clarion could fetch up to £2bn ($2.5bn), based on a multiple of around 12x EBITDA. The move comes as private equity firms cautiously return to the M&A market, following weeks of uncertainty triggered by geopolitical tensions and US tariff policies. Recent market stabilisation has seen a rebound in deal activity, with notable transactions such as KKR’s $3.1bn acquisition of OSTTRA and DoorDash’s $3.6bn bid for Deliveroo reaching completion. Clarion, which operates trade shows in sectors ranging from gaming and defence to energy and electronics, saw revenue surge to £432.9m in the 12 months through January 2024. The recovery in China and Hong Kong significantly contributed to this performance. The company also manages high-profile events including the London International Horse Show and Global Sources. In its most recent financial review, Clarion highlighted strong cashflow management and outperformance against budget expectations—an encouraging sign for prospective investors. However, sources caution that a deal is not guaranteed at this stage. The potential sale marks one of the largest private equity-backed assets to return to market since the slowdown, and underscores Blackstone’s continued effort to time exits with improving economic clarity. (Source: https://pe-insights.com/)
21 May 25. Avon Technologies’ turnaround continues.
Medium-term targets are in sight
- Order book up by a quarter
- Return on invested capital improves to 16 per cent
Avon Technologies (AVON) delivered a solid set of half-year results as the protective helmets and respiratory gear maker benefited from stronger demand from Nato countries amid rising European defence spending and struck a bullish tone on the impact of US tariffs.
Management upgraded the full-year outlook in March, and the results confirmed that the company is on track to deliver revenue growth of more than 10 per cent and an operating margin above 12 per cent.
Adjusted operating profit was up 48 per cent to $17.5m (£13m), helped by a better mix of higher-specification products. The margin rose from 9.4 per cent to 11.8 per cent.
The order book climbed by a quarter to $247m (£185m) as the Avon Protection unit enjoyed eye-catching growth of 69 per cent.
Net debt (including lease liabilities) fell slightly to $74.7m.
Given exposure to the US, it is encouraging that management doesn’t expect tariffs to hinder its ability to reach medium-term margins of 14-16 per cent. It estimates an $800,000 hit on components shipped to the US if levies of 10 per cent are maintained.
House broker Peel Hunt argued the company “has more immediate flexibility than some of its competitors to relocate production over time”.
The shares remain well below their peak in late 2020, after which they crashed on delays to US defence contracts. But Avon is moving in the right direction and has exposure to attractive markets. The company is still confident about hitting medium-term targets in 2026, a year ahead of its original plan.
Avon trades on 28 times 2025 earnings. Hold.
Last IC view: Hold, 1,400p, 19 Nov 2024
(Source: Investors Chronicle)
20 May 25. MDA Space Ltd. (TSX: MDA), a trusted mission partner to the rapidly expanding global space industry, and SatixFy Communications Ltd. (NYSE American: SATX), a leader in next-generation satellite communication systems based on in-house-developed chipsets, today announced that they have agreed to amend the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated April 1, 2025 among SatixFy Communications Ltd. (“SatixFy”) , MDA Space Ltd. (“MDA”) and certain subsidiaries, pursuant to which MDA agreed to acquire SatixFy in an all-cash transaction for US$2.10 (without interest) per ordinary share, which implied an aggregate equity value for the Company of approximately US$193m. The amendment follows a go-shop process, conducted by SatixFy with the assistance of its financial advisor TD Securities (USA) LLC, in which approximately 75 third parties were contacted to determine whether they had an interest in making an Acquisition Proposal (as such term is defined in the Merger Agreement). The “go-shop” period under the Merger Agreement expired at 11:59 p.m. ET on May 16, 2025. As a result of this process, SatixFy received during the “go-shop” period an Acquisition Proposal from a third-party (the “Go-Shop Party” and the “Go-Shop Proposal”, respectively) to acquire all of the outstanding shares of SatixFy in an all-stock transaction, consisting of a number of the Go-Shop Party’s shares that would imply aggregate equity consideration of approximately US$233.5m, or approximately US$2.53 per ordinary share. Furthermore, the exchange ratio, on the basis of which the consideration pursuant to the Go-Shop Proposal would be calculated, featured a collar such that the ratio between the SatixFy shares and the Go-Shop Party stock consideration would remain fixed despite any increase in the Go-Shop Party’s trading price to enable the holders of SatixFy’s ordinary shares to participate in up to a 10% increase, and would be adjusted in the event of any decrease in the Go-Shop Party’s trading price to enable the holders to receive the same aggregate value of US$233.5m despite up to a 20% decrease. MDA disputed the validity of SatixFy’s notice of the Acquisition Proposal. In response to the Go-Shop Proposal and subsequent discussions with MDA, SatixFy and MDA reached an agreement to amend the Merger Agreement to provide for a significant increase in the merger consideration to an all-cash transaction for US$3.00 (without interest) per ordinary share, which implies an aggregate equity value for the Company of approximately US$280m. The increase in the merger consideration is based upon the commitment by the Company not to consider any other acquisition proposals for SatixFy and for SatixFy’s Board of Directors (the “Board”) not to change its recommendation supporting the Merger Agreement, as amended. The Board determined that the increased price per share is the best value for the shareholders of Satixfy, after taking into account various considerations including time to close and risks of delays, risks to closing, financial situation of the company, benefits of an all-cash transaction and others (the “Board Determination”). The Board unanimously reiterates its recommendation that SatixFy shareholders vote FOR the revised transaction at the Meeting (as defined below). Shareholders holding approximately 57% of SatixFy outstanding shares have entered into voting support agreements pursuant to which they have committed to vote in favor of the transaction. (Source: PR Newswire)
19 May 25. TransDigm Group Incorporated (“TransDigm”) (NYSE: TDG) and Servotronics, Inc. (“Servotronics”) (NYSE American: SVT) today announced a definitive merger agreement providing for Servotronics to become an indirect wholly owned subsidiary of TransDigm. TransDigm designs, produces and supplies highly engineered aircraft components. Servotronics designs, produces and supplies highly engineered servo valves. Under the terms of the agreement, a subsidiary of TransDigm will commence a tender offer to acquire all the outstanding shares of Servotronics for $38.50 per share in cash, in a transaction valued at approximately $110m, including certain tax benefits. The cash consideration represents a premium of approximately 274% to Servotronics’ closing share price on May 16, 2025, the last trading day prior to today’s announcement. Following the purchase of shares through the tender offer, TransDigm will complete the acquisition of Servotronics by acquiring all remaining shares not acquired in the offer through a merger at the same price as the tender offer. The acquisition will be funded with TransDigm’s cash on hand and is not subject to any financing conditions. The merger agreement was unanimously approved by the Board of Directors of Servotronics. Servotronics, headquartered in Elma, New York, is a leading global designer and manufacturer of servo controls and other advanced technology components for aerospace and defense applications. Servotronics’ products have a strong presence across major aerospace and defense platforms and significant aftermarket content. Servotronics’ revenues are primarily derived from the commercial aerospace end market and nearly all revenue is generated from proprietary products. Servotronics employs approximately 275 people and generated approximately $45 m in revenue for its fiscal year ended December 31, 2024.
Kevin Stein, TransDigm’s President and Chief Executive Officer stated, “We are excited to have an agreement to acquire Servotronics and welcome them to TransDigm. Servotronics’ highly engineered, proprietary products with significant aftermarket exposure fit well with our long-standing strategy. Nearly 80% of the business serves commercial aerospace and the business has significant shipset content across major commercial and defense platforms. Servotronics is a market leader and pioneer across servo valve technology, and we are excited to partner with Servotronics to continue investing in the business. We are confident that TransDigm will be a great long-term home for this business, its employees, and customers in Western New York.”
Bill Farrell Jr., Servotronics’ Chief Executive Officer, added, “We believe Servotronics will be an excellent addition to the TransDigm portfolio of companies, as our products, business model, strategy and focus are closely aligned. Being part of a larger aerospace company will allow for further growth opportunities and provide resources for Servotronics to continue developing the highly engineered, proprietary products that we are known for today. We believe this transaction delivers immediate and certain value for Servotronics’ shareholders and positions Servotronics well for the future. We are proud of our history and accomplishments and look forward to our long future together with TransDigm.”
Under the terms of the merger agreement, the parties anticipate that TransDigm will commence a cash tender offer for all of the outstanding shares of Servotronics on or before June 9, 2025. TransDigm’s obligation to accept and purchase Servotronics common stock tendered pursuant to the tender offer will be subject to customary closing conditions, including the valid tender of a majority of the outstanding shares of Servotronics common stock.
Advisors
Baker & Hostetler LLP is acting as legal counsel to TransDigm. Houlihan Lokey is acting as financial advisor and Bond Schoeneck & King is acting as legal counsel to Servotronics.
About TransDigm Group
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, cargo loading, handling and delivery systems and specialized flight, wind tunnel and jet engine testing services and equipment, electronic components used in the generation, amplification, transmission and reception of microwave signals, and complex testing and instrumentation solutions.
About Servotronics, Inc.
Servotronics designs, develops, and manufactures servo controls and other components for various commercial and government applications including aircraft, jet engines, missiles, manufacturing equipment and other aerospace applications at its operating facilities in Elma and Franklinville, New York. (Source: PR Newswire)
20 May 25. Elbit Systems Ltd. (“Elbit Systems” or the “Company”) (NASDAQ and TASE: ESLT), the international high technology defense company, reported today its consolidated results for the first quarter ended March 31, 2025. Order backlog at $23.1bn; Revenues of $1.9bn; GAAP net income of $107.1m; Non-GAAP net income of $117.2m; GAAP net EPS of $2.35; Non-GAAP net EPS of $2.57.
Management Comment: Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “Elbit Systems announces today another set of strong financial results posting double-digit growth in revenues, operating income and earnings per share for the fourth consecutive quarter, as numerous global conflicts serve to increase defense budgets. Revenues grew by an impressive 22% reflecting the increased demand for our products and solutions globally. Backlog continued to grow during the quarter and stands at over $23bn up 14% from Q1 2024. Free cash flow generated during the quarter stood at $161m. We believe Elbit is well positioned to capture and benefit from the opportunities of increasing defense budgets globally and particularly in Europe with our well established subsidiaries across the continent as evident in our published contract wins. We are continuing to invest in increasing our production capacity and optimizing our supply chains in order to address our backlog and the high demand for our products. These results would not be possible without our dedicated employees worldwide, for which I am extremely grateful.”
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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR).
For more information visit www.tcibr.com and www.enterprisecontrol.co.uk
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