Advent to acquire British defence supplier Cobham in £4 billion deal

US-based private equity group Advent International has agreed to acquire the UK-based defence and aerospace supplier Cobham in a multi-billion pound deal.

Advent International is set to acquire UK-based defence and aerospace supplier Cobham in a deal valued at £4 billion on Thursday.

The offer values Cobham at 165p a share, representing a 50.3% premium to its average share price over the last three months.

‘We strongly believe in the importance and potential of Cobham's businesses and look forward to bringing our long track record of successful stewardship of companies to ensure that Cobham flourishes under our ownership,’ Advent International Managing Director Shonnel Malani.

Cobham share price climbs 35% after Advent offer

Following the offer from Advent International, the defence and aerospace supplier saw its share price climb 35% in early deals to 165p a share.

Cobham’s management has recommended that shareholders approve the offer from Advent, with the company forced to issue several profit warnings between 2016 and 2017.

‘We have worked intensively over the last two and half years to focus on our customers and our financial and operating performance, and these fundamentals, along with the investment in the business Advent can provide, will enable us to leverage the quality of our products and services,’ Cobham CEO David Lockwood said.

Over the last two and half years, Cobham’s management has implementing a major turnaround strategy aimed at strengthening its balance sheet and overall performance.

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Cobham turnaround plan reaps results

Cobham also unveiled its half-year results on Thursday, which highlighted the success of its turnaround plan, with underlying profit up 12% to £107.1 million, driven by strong organic revenue growth of 11% to £1.03 billion, underpinned by increased demand for its various components.

‘[Advent’s] offer reflects the potential for future growth and improving performance, and is an endorsement of our turnaround strategy and our hard-working people,’ he added.

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