Ultra Electronics To Buy Sparton In $234.8 Mln Deal

(RTTNews) - Ultra Electronics Holdings plc. (ULE.L) said that that it has entered into a conditional merger agreement to acquire New York Stock Exchange-listed Sparton for $23.50 per Sparton share in cash, valuing Sparton's total equity at approximately $234.8 million or 180.6 million pounds. As part of the Acquisition, Ultra will assume Sparton's net debt at Completion.

Sparton is a provider of design, development and manufacturing services for complex electromechanical devices, as well as sophisticated engineered products. Sparton has two reportable business segments: Engineered Components & Products ("ECP") and Manufacturing & Design Services or "MDS".

ECP is Ultra's 50/50 partner in the long-standing ERAPSCO joint venture, which develops, manufactures and supports all US sonobuoys supplied to the US Department of Defense.

Ultra's intention is to dispose of the MDS division by the end of Q1 2018 as it considers it to be non-core to the Combined Group going forward and is in advanced discussions with several interested parties in relation to this disposal.

Ultra also announces the launch of a placing with institutional investors of 7.05 million new ordinary shares of 5 pence each in the capital of Ultra at a price of 1,950 pence per Placing Share, representing about 9.9% of Ultra's existing issued share capital.

The net proceeds of the Placing will be used to part-fund the Acquisition, with the remaining Acquisition consideration being funded through drawdown under the Ultra Group's existing bank facilities, Ultra said.