24 Dec 19. RH Marine Group to get new majority owner. Dutch conglomerate Pon Holdings plans to acquire a majority stake in Netherlands-based RH Marine Group (RHMG) from Dutch private equity firm Parcom Capital, according to a 23 December announcement.
The transaction, the terms of which were not disclosed, will leave Pon as the 100% owner of RHMG. The deal is expected to close before the end of January.
RHMG, which Parcom and Pon have jointly owned since August 2015, consists of several companies, including Radio Holland Group, which supplies and maintains communication and navigation equipment and maritime electronics for various ship types. Radio Holland is headquartered in Rotterdam and had 1,350 employees as of 2017. (Source: Jane’s)
24 Dec 19. Bodycote to acquire Ellison Surface Technologies in £154m deal. Heat treatment and specialist thermal processing services company Bodycote has entered into an agreement to acquire Ellison Surface Technologies, it announced on Monday, in a bid to create one of the world’s largest providers of thermal spray and engineered coating surface technology services to the aerospace industry.
The FTSE 250 company said Ellison’s business, based in North America, would be “highly complementary” to its existing Surface Technology business.
It said it was primarily focused on the aerospace market, and would be integrated into Bodycote’s surface technology and aerospace business, which itself had seen “strong structural growth” in recent years.
Gross consideration for the acquisition would be $200m (£154m).
When adjusted for tax benefits worth at least £30m, net consideration for the transaction would be approximately £170m, and would be settled using Bodycote’s existing committed credit facilities. Ellison’s business generated revenues of $50m in 2018, with associated pro-forma EBITDA of $8m. Based on results for the year-to-date, it was expected that Ellison’s revenue for 2019 would be $58m, with pro-forma EBITDA of $12m.
That expected revenue growth of 16%, and its associated 50% increase in pro-forma EBITDA, reflected the fact that Ellison had been successfully gaining share in the civil aviation business, which would also provide a “solid foundation” for further revenue and profit growth in future years, the Bodycote board said.
It was also expected that the Ellison business would be immediately earnings enhancing to the enlarged Bodycote business. Ellison employs almost 400 people across six sites located across the United States, Canada and Mexico.
“Ellison’s business is one that we have long respected and is a perfect strategic fit for Bodycote’s aerospace and Specialist Technologies’ businesses,” said group chief executive officer Stephen Harris.
“Ellison has been successful in winning new business in recent years and it will be very complementary to Bodycote’s existing Surface Technology business.”
Completion of the transaction was contingent on various regulatory filings, and was expected to complete during the first quarter of 2020. (Source: News Now/Sharecast News)
24 Dec 19. Gilmour Space reflects on 2019’s achievements, with eye on 2020. Australian space company Gilmour Space Technologies has notched up a stack of achievements in 2019 and has big plans 2020.
The company said 2019 turned out to be an exciting year for Gilmour Space and Australia.
“And we look forward to demonstrating more of our tech in 2020. To be continued,” it said.
Gilmour said with the government aiming to triple space revenues to $12bn and create 20,000 new jobs by 2030, space is fast becoming a key future industry for Australia.
During the year, the company signed a statement of strategic intent with the Australian Space Agency and launched a collaboration with the University of Southern Queensland.
Gilmour also teamed up with Titomic to explore the use of 3D printing technology for construction of rocket components.
Gilmour Space Technologies chief executive Adam Gilmour was named winner of the 2019 Advance Award in advanced manufacturing. He was also appointed to the Australian Space Agency’s Space Industry Leaders Forum.
However, the long awaited sub-orbital test launch of the One Vision rocket did not proceed as planned. That was halted seconds before launch because of a technical problem.
Gilmour said that did demonstrate the relative safety of hybrid rocket technology and provided important information for development of the Eris orbital rocket.
“Moreover we successfully tested our semi-autonomous mobile launch platform in the 4,000-kilometre journey to/from a remote site in Queensland, a key capability for rapid response tactical launches,” the company said.
“We are finalising the design for our Eris orbital launcher vehicle with a target first commercial launch by 2022. In December our team moved to a new static test site in Queensland.”
Gilmour said last but not least, the company grew its team to 45 strong, moved to a larger facility on the Gold Coast, improved its gender balance, filled its senior team with some amazing talent from around the world and introduced a new brand logo to reflect its global aspirations. (Source: Space Connect)
23 Dec 19. Leadsom halts Chinese buyout of Mettis but allows Cobham. The business secretary intervened in the proposed acquisition of a West Midlands aerospace company by a Chinese concern at the same time that she was waving through the controversial takeover of the UK aerospace business Cobham by an American private equity firm.
Late on Friday Andrea Leadsom gave the green light to a £4bn takeover of Cobham by Advent International despite fears that important UK technological knowhow was being sold off.
On the same day, she took steps to block the proposed acquisition of a smaller rival, Mettis Aerospace of Redditch in the West Midlands, after its private equity owners were approached by Ligeance Aerospace Technology, a company based in China and owned by Aerostar, a fund incorporated in the country.
Claims that Cobham’s world-leading technology in flight refuelling and other aircraft componentry were critical to Britain had led Mrs Leadsom repeatedly to delay a decision on the deal on the grounds of national security.
It had emerged that the Competition and Markets Authority had found that the Ministry of Defence had raised concerns that “unauthorised persons” would have access to UK defence capabilities as a result of the sale of Cobham. (Source: Google/The Times)
22 Dec 19. Babcock hunts down shadowy tormentor. Submarine and warship repairer Babcock believes it has identified the anonymous analyst behind a damaging attack on the company. Babcock, one of the Ministry of Defence’s biggest suppliers, was blindsided in October last year when a previously unknown organisation, Boatman Capital Research, published a highly critical dossier.
The report claimed the company had “systematically misled investors by burying bad news about its performance”, and called for the departures of chief executive Archie Bethel and then chairman Mike Turner.
The 23-page attack wiped more than 5%, or £130m, from the company’s market value. Babcock published a rebuttal, claiming the report contained “many false and malicious statements”.
The board hired the investigative firm Kroll to trace the author. It is believed to have identified David Robertson, a former journalist at The Times who worked at the corporate intelligence firm K2 and now runs his own company.
Babcock is believed to have written to Robertson, 46, warning him to cease and desist, but is not thought to be taking further action.
Robertson, whose outfit, Thirteen Research, conducts corporate investigations, could not be contacted for comment. Babcock, now chaired by Ruth Cairnie, declined to comment.
The hunt for Boatman intensified in May after it issued another report, accusing the FTSE 250 firm of “underperformance and overcomplexity”. That report centred on Babcock’s military vehicles division, but did not hit the share price as hard.
The email address behind Boatman was initially traced to a company in Panama. There were various theories about the people involved, ranging from short-sellers — which profit from declines in a company’s share price — to the Russian state.
Babcock’s shares have bounced back strongly since the summer, rising more than 40%. They closed on Friday at 606.8p, valuing the business at about £3.1bn.
- The Ministry of Defence has spent £7bn so far on its new class of Dreadnought submarine, which will be armed with nuclear missiles. FTSE 100 defence giant BAE Systems is building the submarines at Barrow-in-Furness, Cumbria, to replace the Royal Navy’s ageing Vanguard-class vessels, and says they will begin going into service in the early 2030s.
Officials revealed that £7bn of a total £41bn budget had so far been spent on the design, assessment and early construction. The four submarines will maintain the navy’s continuous at-sea deterrent.
(Source: The Sunday Times)
BATTLESPACE Comment: This is a fairly light story with little real content which reads as if Babcock is saying that there was some truth in the Boatman story, but it contained inaccuracies which did merit suing David Robertson. It reads more like a PR plant directed to deflect any issues arising from the forthcoming Defence Review by Dominic Cummings. Rumours abound of possible problems arising with the Appledore Pension Scheme prior to the closure of the business.
21 Dec 19. Britain gives U.S. investor go-ahead to buy Cobham for $5bn. Britain has approved the purchase of British defense company Cobham (COB.L) by U.S. investor Advent International for $5bn after the private equity group made commitments to address national security concerns.
Business minister Andrea Leadsom had put the deal on hold to review the sale of air-to-air refueling equipment maker Cobham, which employs 10,000 people and also makes communications equipment for military vehicles.
“I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed,” Leadsom said in a statement bit.ly/2PIzbkS published on Friday.
Leadsom had said on Tuesday that Prime Minister Boris Johnson’s new government of was minded to accept the deal after Advent put forward several legal undertakings, including having a number of British executives on Cobham’s boards.
Advent will have to give prior notice to Britain’s defense ministry if it plans to sell all or part of Cobham’s business, and honor existing contracts with the government.
A member of the family which founded Cobham said the decision was deeply disappointing.
“In Cobham, we stand to lose yet another great British defense manufacturer to foreign ownership,” said Nadine Cobham, whose late husband was a son of the company’s founder.
“In one of its first major economic decisions, the government is not taking back control so much as handing it away,” she said, adding that the announcement on the weekend before Christmas had been timed to avoid scrutiny.
Johnson said the sale showed Britain – which is due to leave the European Union at the end of next month – was open to investment from around the world.
“It’s very important that we should have an open and dynamic market economy,” he told British broadcasters during a visit to Estonia. “A lot of checks have been gone through to make sure that, in that particular case, all the security issues that might be raised can be satisfied.”
Founded in the 1930s, Cobham’s equipment came to the fore ahead of World War Two and in the 1982 Falklands conflict. Its technology is now used in aircraft such as Lockheed Martin’s F-35 Joint Strike Fighter and the Eurofighter Typhoon, as well as advanced naval vessels, satellites and military vehicles.
However, it is still recovering from profit warnings in 2016 and 2017 that forced it to ask shareholders for cash and prompted Chief Executive David Lockwood to overhaul operations. Advent has already won approval from regulators in the European Union, United States and Finland for its acquisition of Cobham, which was backed by shareholders in September. The U.S. private equity group also bought British electronics company Laird for $1.65bn last year. (Source: Reuters)
21 Dec 19. Cobham takeover: Boris Johnson defends £4bn sale to US equity firm. The controversial £4bn takeover of UK defence and aerospace company Cobham by a US private equity firm. The government approved the sale of Cobham to Advent International on Friday, after the deal was delayed because of national security concerns.
Former First Sea Lord Admiral Lord West said Cobham holds defence technologies which are “critically important”.
But the PM said “a lot of checks” had been gone through to satisfy concerns.
Speaking on a trip to see British troops in Estonia, Mr Johnson said: “I think it’s very important that we should have an open and dynamic market economy.
“A lot of checks have been gone through to make sure that in that particular case all the security issues that might be raised can be satisfied and the UK will continue to be a very, very creative and dynamic contributor to that section of industry and all others.”
Advent International made its initial offer in July and it was approved by shareholders in August.
The government ordered a review from the competition regulator, the Competition and Markets Authority (CMA), a week after Admiral Lord West expressed concerns, in an interview with the Daily Mail,
The CMA’s report, published at the end of October, said the MoD had outlined two main areas of security concern over the sale:
- The risk of “unauthorised persons” obtaining information about the MoD’s capabilities and activity
- The threat to existing MoD programmes (due to funding cuts or moving capabilities “off-shore”)
In a statement on Friday, Business Secretary Andrea Leadsom said she was satisfied the risks that had been identified had been mitigated “to an acceptable level” – and allowed the deal to go ahead.
But Admiral Lord West said that while he was “delighted” that was the case, “it does mean that there are national security risks that are being mitigated”.
He stressed the importance of maintaining defence capabilities in what he called a “chaotic and rapidly changing world where old alliances are no longer certain”, adding “no other advanced industrial nation and certainly no permanent member of the UN Security Council is so cavalier about giving up such capabilities”.
Sir Ed Davey, acting leader of the Lib Dems, described the move as “deeply concerning”.
He added that “we have yet to see evidence” that the previous concerns over national security had been mitigated.
The decision to approve the takeover was described as “deeply disappointing’ by Lady Nadine Cobham – part of the family which set up the UK firm.
She criticised the timing of the announcement, saying it was “cynically timed to avoid scrutiny on the weekend before Christmas”, adding: “In one of its first major economic decisions, the government is not taking back control so much as handing it away.”
Shonnel Malani, partner at Advent, said the firm took the takeover “seriously”.
“We are confident the transaction and undertakings being given on national security, jobs and future investment, provide important long-term assurances for both Cobham’s employees and customers, particularly in the UK and also globally,” Mr Malani added.
Cobham, which employs 10,000 people, has extensive contracts with the British military and is seen as a world leader in air-to-air refuelling technology.
The firm, based in Wimborne, Dorset, also makes electronic warfare systems and communications for military vehicles.
Its expertise played a significant role in the Falklands War, allowing the Royal Air Force to attack the remote Port Stanley airfield.
Mrs Leadsom said the decision had been “meticulously thought over” and that she had taken advice from the defence secretary and the deputy national security adviser.
She added that sensitive government information would continue to be protected under the new owner and existing contracts would be honoured.
The company is also obliged to give the government prior notice of any plans to sell the whole, or elements of, Cobham’s business.
Just before 10pm on a Friday is an odd time for this kind of thing to be announced.
One defence analyst remarked that it was as if the government rather wanted no-one to notice what had happened.
The curious timing may actually draw more attention than if it had been done at a more normal hour – few doubted the government would block the deal, and shareholders in Cobham have already voted overwhelmingly in favour.
It says something of the sensitive nature of Cobham’s business that much of the published version of the competition regulator’s report on the takeover was simply blacked out. In one unedited passage of the report, the Ministry of Defence said if the deal went ahead there was “a risk that the institutional framework and safeguards required by the government’s security framework may be undermined”. (Source: Google/BBC)
20 Dec 19. Eaton Completes the Acquisition of Souriau-Sunbank Connection Technologies. Power management company Eaton Corporation plc (NYSE:ETN) today announced it has completed the acquisition of the Souriau-Sunbank Connection Technologies business of TransDigm Group Incorporated for $920m. Headquartered in Versailles, France, Souriau-Sunbank is a global leader in highly engineered electrical interconnect solutions for harsh environments for customers in the aerospace, defense, industrial, energy, and transport industries. Founded over 100 years ago, the business has a workforce of approximately 3,200 people and manufacturing facilities in France, the Dominican Republic, India, Morocco, Mexico, and the United States.
“I am delighted to welcome the Souriau-Sunbank team to Eaton,” said Craig Arnold, Eaton chairman and chief executive officer. “Souriau-Sunbank accelerates our participation in the growing market for electrical content on aircraft and is another example of our strategy to bring our broad electrical expertise into new markets.”
Eaton is a power management company with 2018 sales of $21.6bn. We provide energy-efficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton is dedicated to improving the quality of life and the environment through the use of power management technologies and services. Eaton has approximately 103,000 employees and sells products to customers in more than 175 countries. (Source: BUSINESS WIRE)
20 Dec 19. TriMas Completes the Sale of Its Lamons Division. TriMas (NASDAQ: TRS) today announced that it has successfully completed the sale of its Lamons division, a transaction entered into with an investment fund sponsored by First Reserve on November 1, 2019. Lamons was sold for approximately $135m in cash, subject to customary post-closing adjustments.
“The funds from this transaction, combined with our strong balance sheet and robust levels of free cash flow, afford us the opportunity to continue to advance our disciplined capital allocation strategy,” said Thomas Amato, President and Chief Executive Officer of TriMas. “This strategic step also unlocks TriMas’ ability to reposition our portfolio by concentrating our resources and investments in our Packaging and Aerospace segments.”
TriMas will report the 2019 results of its Lamons division, which was previously reported in the Specialty Products segment, as discontinued operations beginning in the fourth quarter of 2019.
TriMas is a global manufacturer and provider of products for customers predominantly in the consumer products, aerospace and industrial end markets, with approximately 3,400 dedicated employees in 11 countries. We provide customers with a wide range of innovative and quality product solutions through our market-leading businesses. Our TriMas family of businesses has strong brand names in the end markets served, and operates under a common set of values and strategic priorities under the TriMas Business Model. TriMas is publicly traded on the NASDAQ under the ticker symbol “TRS,” and is headquartered in Bloomfield Hills, Michigan. (Source: BUSINESS WIRE)
16 Dec 19. Cohort unveils naval sonar acquisition. Cohort (CHRT) has agreed to buy German naval sonar systems business ELAC for €11.25m (£9.5m), in a deal that will complete on or before 30 June 2020, subject to approval from the German government.
ELAC will become Cohort’s sixth subsidiary and is viewed as complementary to the holding company’s electronic systems outfit SEA, which made a small loss over the group’s half-year. Falling SEA revenues and investment in its anti-submarine warfare system, which included a sea trial with the Portuguese Navy, brought about a £0.3m trading loss compared with £0.4m profit in 2018. Management expects SEA to return to profit in its second half and perform similarly to last year.
Cohort’s December 2018 acquisition Chess Technologies, which used its counter drone technologies to help end last year’s Gatwick Airport crisis, made its first contribution to Cohort interim figures, accounting for £13.9m of group turnover. Cohort’s order book jumped to £207m from £191m, a record for the group. Around £60m of the order backlog is deliverable in the second half, which, added to revenue delivered to date, amounts to 83 per cent of forecast full-year revenue, which is up from 71 per cent at the 2018 half-year.
Broker Investec forecasts adjusted pre-tax profits and EPS of £19m and 36p, respectively, for the April 2020 year-end, rising to £21m and 40.8p in FY2021.
Christmas has come early again for Cohort shareholders, via a double-digit dividend hike, while the ELAC deal looks promising from a strategic angle – we’ll know more by April. Shares in the contractor are up by by 50 per cent since last year’s interims, and sentiment towards the stock has improved because defence spending around the world is on the rise and Cohort is well positioned to capitalise on growing security concerns. Its full-year revenues are well-covered, and though the shares are trading near an all-time high, we think there’s more upside potential based on current geopolitical trends and the group’s track record for successfully integrating acquisitions. Buy. Last IC View: Buy, 440p, 23 Jul 2019. (Source: Investors Chronicle)