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25 June 21. Cobham sets sights on UK rival Ultra Electronics. Private equity-backed aerospace group adds to wave of interest from buyout firms in UK companies. Cobham said it was examining a ‘number of structures’ to effect a combination with Ultra Electronics. Cobham, the private-equity backed UK aerospace and defence group, is considering a bid for rival Ultra Electronics in a deal that it said would create a “global defence electronics champion”. The company, which was itself acquired for £4bn by US buyout group Advent International last year, said on Friday that it was examining a “number of structures” to effect a combination with Ultra. These included a takeover offer for its London-based competitor or reversing into Ultra in exchange for new shares in a combined group. Cobham said that both companies had a “long heritage as innovators, and share advanced complementary capabilities delivering mission critical solutions to the US, UK and other key allies”. The two groups are key suppliers of components to the Eurofighter Typhoon aircraft and the F-35 fighter jets which will be deployed on the Royal Navy’s two new aircraft carriers. Cobham’s interest elicited a strongly-worded statement from Ultra which said it had received no proposal from its suitor. It said it had been at “very early stages of exploratory discussions around a possible combination of some or all” of its communications assets with those of Cobham’s electronics business, CAES. Ultra added that, within the scope of those talks, Advent and Cobham had confirmed that they were “not actively considering an offer for Ultra”. It said it had now terminated those talks. Shares in Ultra jumped almost 7 per cent in late trading on Friday to £23, valuing the company at £1.64bn after news of Cobham’s interest broke. Ultra is in the midst of a turnround under chief executive Simon Pryce. The company managed to shrug off much of the impact of the coronavirus pandemic, reporting in March a 14 per cent rise in pre-tax profits to £103m for the year to the end of December. It has seen increased demand for its submarine hunting equipment and other kit used in cyberwarfare. News of Cobham’s interest in Ultra adds to the recent push by private equity groups, which have emerged from the pandemic flush with cash, to acquire some of the best-known names on the UK stock market. US firm Clayton, Dubilier & Rice has made a bid to take over the supermarket chain Wm Morrison. Lone Star earlier this week walked away from a possible offer for Senior after being rebuffed by the FTSE 250 aerospace and defence parts supplier. Overall, private equity bids for UK-listed companies have amounted to £21bn this year, according to Refinitiv. Advent’s takeover of Cobham was opposed by the family of its founder as well as several former executives of the company who raised concerns over what they said was an apparent lack of scrutiny from the government. The company’s pioneering air-to-air refuelling technology is used on all western fast jets and there were concerns that Advent would break up the group. Opponents of the deal have pointed out that Advent has since gone on to sell a number of Cobham’s businesses, including the air-to-air refuelling technology. Advent committed to a series of undertakings at the time of the purchase which it has said it has continued to comply with. Cobham said there was no certainty that any combination would result, nor that an offer would be made. The company has until July 23 to announce a firm intention to make an offer for Ultra or walk away. (Source: FT.com)
24 June 21. Oaklins Smith & Williamson has advised advanced material solutions supplier Permali Gloucester Limited on its conditional sale to Diamorph (subject to regulatory approval). Permali is a designer and manufacturer of composite and thermoplastic polyurethane (TPU) material solutions. It serves global manufacturers and Government organisations across a wide range of sectors including defence, aerospace, Formula One, medical and rail, supplying bespoke and highly technical products for often mission critical applications.
Diamorph, based in Manchester, provides material solutions under a range of brands for highly demanding environments and is backed by Epiris, an independent private equity firm. The addition of Permali’s strong positions in defence, medical and F1 to the Diamorph Wear Components Business Unit, with the two businesses adjacent technology bases, will strengthen the Group and create a significant UK player in laminate-based composite materials.
Managing director Gus King, with support from private equity firm 3i Group, led the 1988 buy-out of Permali. Oaklins Smith & Williamson worked with the shareholders to deliver a successful sale to Diamorph, a strategic partner that can use Permali’s Gloucester base as the centre of excellence for developing and growing its enlarged composites offering.
Philip Barker, head of industrials at Oaklins Smith & Williamson, led the transaction supported by Brian Livingston and Joseph Sherry, with further support from Oaklins’ aerospace and defence experts Stephen Perry and Jason Kimball.
Gus King said: “As a shareholder group, we found the advice and support that the Oaklins team provided crucial in achieving a successful transaction. Their strong track record in both the aerospace and defence and industrials sectors and ability to anticipate and overcome a wide range of challenges during the sale process were important factors in delivering a positive outcome for the shareholders.”
Philip Barker said: “We are delighted to have supported Permali. This transaction highlights our deep sector knowledge and technical skills to resolve difficult issues.” (Source: Google/https://www.businessleader.co.uk/)
22 June 21. U.S. Blocks Chinese Deal for Magnachip. A U.S. interagency panel has moved to block the acquisition of a South Korean chipmaker by a Chinese investor, signaling what observers say is a significant expansion of U.S. jurisdiction in curtailing Chinese access to strategic semiconductor technologies. The Committee on Foreign Investment in the United States (CFIUS) issued an interim order on June 15 blocking the Chinese private equity fund Wise Road Capital from acquiring Magnachip Semiconductor Corp. of Seoul, South Korea. The regulatory step puts the deal on hold, but observers said it’s unlikely U.S. and Korean regulators would allow it to proceed in its present form, citing national security concerns.
Wise Road’s $1.4bn acquisition Magnachip was announced in March. It was reportedly expected to close later this year.
According to a June 17 filing with the U.S. Securities and Exchange Commission, CFIUS also prohibited Magnachip from delisting from the New York Stock Exchange. A day later, Korean regulators weighed in, reportedly designating Magnachip’s OLED drivers as a “national core technology.”
Magnachip designs and manufactures analog and mixed-signal semiconductors for automotive, communications, consumer, Internet of Things and industrial applications. It is one of the first chip makers to mass produce OLED driver chips widely used in smartphone displays. Wise Road is an investor in Huaqin, a leading Chinese smartphone manufacturer also backed by Qualcomm.
In March, Magnachip announced the sale of its Foundry Services Group and the larger of its two 8-inch wafer fabs to a pair of Korean venture firms in a deal worth about $435m.
After accepting the Wise Road tender, Magnachip received an superior unsolicited bid from Cornucopia Investment Partners to acquire all outstanding shares of common stock. According to reports, investors have initiated a probe of Magnachip’s board of directors for failing to consider a higher bid.
Analysts note that intervention by CFIUS in the proposed deal is significant and perhaps unprecedented since Magnachip has little if any presence in the U.S. market beyond incorporation in Delaware and shares traded on a U.S. stock exchange (NYSE: MX).
The joint U.S.-South Korean effort to block Wise Road’s acquisition of Magnachip represents a “major extension” by CFIUS of its jurisdiction over foreign technology acquisitions, according to Chris Miller, an assistant professor at Tuft University’s Fletcher School of Law and Diplomacy.
“Magnachip’s technology is advanced, but it isn’t particularly unique. If you were to draw up a priority list of companies that you didn’t want to fall into China’s hands, Magnachip wouldn’t be at the top of the list,” Miller asserted in an article posted this week on the website foreignpolicy.com.
The Biden administration has backed off of “decoupling” economically from China, instead advocating competition while building resilient U.S. supply chains for key technologies such as semiconductors.
Still, the move to block the Magnachip acquisition represents a new front in U.S. efforts to limit Chinese access to advanced chip technologies.
“The fate of the deal will send a major message about how Washington is thinking about the United States’ economic relationship with China,” Miller wrote. (Source: glstrade.com/https://www.eetimes.com/)
22 Jun 21. Mubadala to partially float Yahsat. The UAE’s state-owned investment fund Mubadala announced on 21 June that it is floating a 30–40% stake in satellite communications subsidiary Yahsat.
The listing on the Abu Dhabi Securities Exchange (ADX) will involve a public offering to individual and other investors within the UAE, and a separate offering to qualified institutional and other investors in the country and from abroad.
Shares are being sold with a nominal value of AED1.00 (USD0.27), with the value of each share to be determined through a book-building process. Between 731.9 million and 975.9 million shares have been earmarked for issuance. A timetable for the listing published in UAE-based newspaper The National noted that the expected date of listing on the ADX is 14 July.
The company noted in its prospectus that government and military customers are a key part of its growth strategy, ranging from customers in the UAE to the Gulf and beyond. According to the prospectus the company is in “ongoing discussions” with the UAE government concerning additional military capacity and services. Yahsat is also responsible for the management of the UAE’s FalconEye space-based optical surveillance satellite programme. Of the two satellites launched under the programme, one was successfully placed into orbit in December 2020, while the first failed during launch in July 2019. (Source: Jane’s)
22 June 21. Primer Raises $110m Series C Funding. Led by Lee Fixel’s Addition, Primer has secured funding to propel its next phase of growth, including international expansion and strategic alliances with Microsoft and Palantir to serve mission-critical US Government needs. Primer, the leading Natural Language Processing (NLP) firm, today announced the close of a $110m Series C round led by Lee Fixel’s Addition. New strategic investors include Steadfast, Sands Capital, and Hank Crumpton, former Ambassador-at-Large and US Coordinator for Counterterrorism. Existing investors Lux Capital, DCVC, Amplify Partners and more also participated. Primer also announced an integration with Microsoft Corporation to make Primer natively available within Microsoft Azure, as well as a partnership with Palantir Technologies, Inc. to make Primer available within the Palantir platform to deploy operational AI to US Government missions.
Organizations collect and create much more data than human analysts can handle. As a result, much of it remains unexplored or underutilized. Primer’s industrial-grade NLP platform enables organizations to create structure and pull insights from vast amounts of data to support faster decision-making. Primer’s NLP technology can effectively read and write in English, Russian, Chinese and Arabic. This technology has been proven in national security and intelligence domains to meet the highest standards. Recently, a financial technology company found that Primer’s out-of-the-box Named Entity Recognition model outperformed the competition on average by 42%. The new funding will enable Primer to step up recruiting efforts both in the US and globally, as it seizes on the vast addressable market for NLP. Starting with new offices in London and Singapore, the company is set to expand its footprint across Europe and Asia.
“Primer is transforming how we read, write, and perform advanced analysis on unstructured data to drive decision-making,” said Lee Fixel. “Primer’s impressive growth is underpinned by the strength of its NLP technology. We look forward to supporting the company as it continues to drive innovation across both the public and private sector.”
“NLP is undergoing a revolution as artificial intelligence continues to push the boundaries of machine performance in reading and writing tasks,” said Sean Gourley, CEO & Founder of Primer. “We are now able to build machines that can achieve human level performance in many tasks from information extraction, to document classification to summarization. Series C capital will allow us to build larger and better performing language models and make those available across industries, from defense and intelligence to finance and health care.”
“Having dedicated most of my life to intelligence and having spent decades leading critical missions where information was essential in shaping our understanding of the operational landscape, I understand the value of Primer’s technology,” said Hank Crumpton, former Ambassador-at-Large and US Coordinator for Counterterrorism. “Primer is already reshaping the way we assess and scale intelligence capabilities. I’m proud of the team and their mission to realize the responsible power of artificial intelligence.”
Today, Primer also announced a partnership with Palantir to empower analysts, decision-makers, and warfighters with sophisticated AI-enabled decision-making technology to succeed in their missions, from HQ to the tactical edge. By making Primer’s world-class AI and NLP available within the Palantir platform, federal clients can tackle the vast troves of data that exist in today’s world—a major hurdle for organizations seeking to extract key networks and facts from highly dynamic situations. Palantir’s Apollo for Edge AI technology brings the power of AI micromodels to the edge, unlocking rapid mission system reconfiguration to provide AI insights for warfighters in the field. Drawing on readily integrated enterprise data in the Palantir platform via open APIs, Primer’s NLP capabilities surface hard-to-find insights from that data in near real-time and with full historical context. Primer’s industrial-grade NLP engines are a natural partner to Palantir, with Primer’s AI continuously providing insights that empower users to understand key nodes and relationships with Palantir’s platform. With this seamless integration, users automatically receive AI insights as new data comes in and can make decisions with a complete view of their operations with unprecedented speed.
To better serve the most sensitive, mission-critical needs of the U.S. government and its allies, Primer is joining forces with Microsoft to make Primer available within Microsoft’s Azure cloud computing platform. Primer and Microsoft will also collaborate on serving larger and more complex customers and contracts together, making it easier for intelligence teams to integrate Primer’s technology into their existing workflows, including those running on the Azure Government Secret and Azure Government Top Secret services.
The company will build on the recent commercial release of Primer Automate, a no-code solution for users to build and train their own NLP models on their data. Automate offers a number of NLP Engines straight off-the-shelf. Primer Analyze further democratizes access to intelligence through a scalable, self-curating knowledge base that can analyze bns of documents in seconds. This unique capability allows analysts to quickly search through large-scale document caches and databases to extract the information that matters the most. Primer’s products and models sit on top of its proprietary NLP technology, which is built on transformer-based neural networks, making its solutions models faster, more accurate, and easy to retrain.
With Primer, organizations can now train, retrain, build and deploy world-class AI and NLP technology for their specific needs. Continuously driving its technology forward, Primer is proud to bring industrial-grade NLP solutions to more organizations worldwide.
Primer builds machines that can read and write. We make it easy for organizations to bring industrial grade NLP into their mission-critical operations. Primer’s technology is deployed by some of the world’s largest government agencies, financial institutions, and Fortune 50 companies. For more information, please visit https://primer.ai/ (Source: PR Newswire)
22 June 21. Britain’s Senior Plc rejects Lone Star’s revised $1.2bn take-private offer. Aircraft and car parts supplier Senior Plc (SNR.L) on Tuesday rejected a $1.2bn buyout offer from U.S.-based Lone Star Global, saying the sweetened proposal made a day earlier “continues to fundamentally” undervalue the British company.
The London-listed company has now rejected all the five proposals from the private-equity firm as undervaluing it, while maintaining it had enough resources to deliver on its strategy by itself.
Senior said there was no basis to engage with Lone Star at present after the fund on Monday said its 200-pence-per-share final offer could be increased only if a rival bid was made.
“The board believes we have a clear strategy that will maximise value for shareholders over the medium-term and accordingly, the board is not able to recommend a sale of the business at 200 pence per share,” Senior Chairman Ian King said in a statement.
Still, the company said it would be willing to engage with Lone Star or other potential suitors at a fair price.
While the pandemic and Boeing’s 737 MAX crisis hit the company and other suppliers hard, Senior has been restructuring its business by selling non-core units and cutting jobs.
The company on Tuesday said trading results in the five months to May had been ahead of management expectations, as it prepared to report interim results on Aug. 2.
Overall sales were 15% lower on a constant currency basis compared to the same period last year, the company said. (Source: Reuters)
21 June 21. Lone Star makes fifth and final push to buy aerospace engineer Senior. US private equity firm Lone Star has made a last ditch effort to convince the board of Senior (SNR) to accept its takeover proposal. The UK aerospace engineering business has been pursued by Lone Star since the end of May but so far, the board of Senior has resisted all attempts.
The latest Lone Star proposal is its fifth and final, pitched at 200p per share which values the aircraft parts business at approximately £838.8m. The offer would have been worth approximately £1.045bn on an enterprise value basis, which includes Senior’s rough £206m of net debt.
Senior shares jumped 12% in response to Lone Star’s sweetened deal, yet at 169.67p, the stock continues to trade significantly below the offer price.
Senior’s board has yet to respond to the latest offer.
According to Lone Star’s calculations the sweetened offer represents a 69% premium to Senior’s closing price of 118.3p per share on 27 May 2021, the last closing price prior to the commencement of the offer period.
The premium is 78% based on Senior’s three-month volume weighted average price of 112.2p per share as at 27 May 2021, notes the private equity investor as it looks to raise the pressure on Senior’s board to accept the bid.
WHY LONE STAR WANTS SENIOR
Senior designs and manufactures high-technology components and systems for original equipment manufacturers in the aerospace, defence, land vehicle, power and energy markets.
Yet these end markets have been volatile for some years, leading to what analysts at Berenberg called an ‘uninspiring’ financial performance.
‘Even before the impact of Covid-19, Senior had suffered from the Boeing 737 MAX grounding and weak industrial end-markets before that,’ said Berenberg.
Lone Star’s rationale seems to be pitched on the idea that it could speed up Senior’s financial recovery. This may include more aggressive cost cutting in order to accelerate and exceed the current margin recovery profile, but it may also include selling off parts of the business.
According to Berenberg, Senior put its aerostructures unit (42% of group revenues in 2019) up for sale at the end of 2019, but pulled the sale in April 2020 despite receiving strong interest. (Source: Google/https://www.sharesmagazine.co.uk/)
15 June 21. Xenesis Acquires A Minority Stake In Space Micro As Both Work To Build The First FSO Global Mesh Network. Xenesis, Inc., an innovator in the free space optical communications (FSO) technology sector, has acquired a minority stake in Space Micro Inc. — this is a union both Xenesis and Space Micro have been diligently working toward solidifying. Through this agreement, Space Micro will become the exclusive manufacturer for components used in the Xenesis product line (including Xen-Hubs and Xen-Nodes) and Space Micro will also include the Xenesis devices in their product catalog and website.
While the devices can be integrated into many other satellite designs, a number of the units have been earmarked for the Xenesis Intercessor constellation that is due to be launched in 2023. The strength of both these companies joining forces goes far beyond vertical integration as each brings unique value to the table that will only set to enhance the common goal of building the first FSO global mesh network.
There is a lot to look forward to as Xenesis and Space Micro continue to work together while offering downlinking capabilities of 10 Gbps, real time latency, reduced costs,and an inherently secure / data agnostic FSO network.
Mark LaPenna, CEO of Xenesis, said he “is elated at this opportunity to join forces with Space Micro as they have some of the most advanced LCT’s on the market today. Partnering with Space Micro will help us to build our constellation design and generate revenues only utilizing less than 50 satellites while maintaining the ability to cover the majority of the earth’s population, including many areas like parts of Asia and Africa which have never had access to a connected world. Take our two companies, Xenesis and Space Micro, and together you now have one of the most advanced backhaul networks ever launched.”
David R. Czajkowski, CEO of Space Micro, added, “The unique and transformative Xenesis business model will aid in enabling rapid growth in the emerging space optical marketplace. This teaming of a telecom company, Xenesis, and a space optical communications hardware company, Space Micro, will benefit both commercial and governmental users. We are very pleased to have been selected by Xenesis as their exclusive manufacturer of lasercom terminals and to support our joint demo mission called Intercessor.”
Based in Chicago, IL Xenesis is a space telecommunications company which uses optical technology & space as a medium, to deliver low cost, low latency & high-capacity communications to Earth Observation, Network Operator & Enterprise customers.
Space Micro is an engineering-driven business focused on technology advancement for high-reliability satellite subsystems. SMI has garnered a hard-earned reputation based on their innovative, affordable, high-performance communications, digital, and electro-optic systems, as well as their ability to leverage commercial technologies to meet military and space requirements. Their dauntless determination and enthusiasm have fueled their engineering of game-changing technologies and to date maintained a flawless space flight heritage of over 2.4 million hours with a phenomenal SATCOM data rate of 100 Gbps. (Source: Satnews)
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.