-T / T / +T | Comment(s)

Wednesday, May 21, 2014

Cobham Seeks Connectivity Boost With Aeroflex

Woodrow Bellamy III 

[Avionics Today May 21, 2014] Cobham plc has proposed a $1.46 billion purchase of Aeroflex, as the U.K.-based aerospace and defense manufacturer looks to increase its data communications and connectivity offerings.  

Acquiring the Plainview, N.Y.-based provider of microelectronic components and test equipment will also expose Cobham to more commercial opportunities, according to Bob Murphy, Cobham's chief executive. 
 
"The acquisition of Aeroflex is absolutely aligned with our strategic objective to obtain more exposure to growing, commercially oriented end markets that increasingly demand more data, connectivity and bandwidth," said Murphy.
 
Some of the specific product innovations that Cobham believes present revenue growth potential with Aeroflex include the increased outsourcing by Original Equipment Manufacturers (OEMs) for manufacturing electronic products, along with the company's development of wireless test capabilities to address the global build-out of 4G infrastructure and the evolution of 5G. 
 
According to a statement, the acquisition would increase Cobham's overall commercial revenue from 35 to 41 percent. Approximately 70 percent of business for Aeroflex is focused on "higher growth commercial segments," with the majority of its revenue coming from the United States, and the rest split between Europe and Asia. 
 
"Aeroflex has maintained consistently high levels of company funded Research & Development resulting in a pipeline of products that we expect to further underpin our growth profile, with the business expected to deliver highly attractive financial returns," said John Davaney, chairman of Cobham. 

The acquisition is expected to be complete by the third quarter of 2014, subject to regulatory approval in the United States and the U.K. 

Live chat by BoldChat