Cobham To Buy Aeroflex For About $1.46 Bln - Quick Facts

(RTTNews) - Military and civil systems provider Cobham Plc (COB.L) has inked a conditional agreement to acquire Aeroflex Holding Corp. (ARX) for $10.50 per Aeroflex share cash upon completion, giving an enterprise value of about $1.46 billion or 869 million pounds. This includes the total issued and outstanding common shares of Aeroflex and the total outstanding restricted stock units and performance restricted stock units, which are worth around $920 million, or 548 million pounds, together with Aeroflex's net debt of $540 million, or 321 million pounds at March 31, 2014.

The Aeroflex acquisition is likely to be significantly accretive to underlying earnings in 2015 and, assuming completion late in the third calendar quarter of 2014, to have a broadly neutral impact on underlying earnings in the current year. Expected returns would top Cobham's cost of capital in the third full year of ownership.

Cobham proposes to finance the transaction, that includes the refinancing of existing debt facilities of Aeroflex, via. bank facilities. To maintain an appropriate level of gearing, the acquisition financing would include the proceeds of an equity placing of up to around 6 percent of Cobham's current issued share capital.

The agreement, that is approved by Aeroflex's board, represents a premium of around 26.1% over Aeroflex's closing stock price on May 19, 2014, the last trading day prior to the announcement of the transaction, and a 28.4% premium to Aeroflex's volume-weighted average price over the prior 30 trading days.

The transaction may close during the third calendar quarter of 2014.