Agreed sale of SEA's Space division to Thales Alenia Space UK for up to £6.5 million
Published 1st May 2014
Cohort, the independent technology group, today announces that it has agreed to sell the Space division of its subsidiary SEA to Thales Alenia Space UK Ltd ("TAS UK"), a subsidiary of Thales Alenia Space.
Completion of the transaction is subject to the satisfaction of a number of conditions precedent, including the transition of existing contracts.
Based in Bristol, the space division of SEA provides research through to high-integrity space flight hardware for near Earth and deep space missions. The disposal is in line with the Board's stated policy to increase shareholder value through corporate activity where suitable opportunities arise. SEA's Space division was relatively small in scale and it is the Board's view therefore that the division would be better owned by a business with a stronger presence in the sector. The cash proceeds from the disposal will provide funds for investment in the Group's core businesses and for potential acquisitions.
TAS UK has agreed to acquire the business for an initial cash consideration of £5 million of which £2.5 million is due on signing with the balance to be paid on completion. In addition a price adjustment based on the working capital position at the time of completion may result in a further cash payment of up to £1.5 million. Completion is expected to be on or before 31 May 2014.
For the year ended 30 April 2013, the Space division reported gross margin of £0.3m on revenues of £5.1m and a small operating loss after overheads. Gross assets were £5.4m as at 31 October 2013. After writing off goodwill of £2.0 million the transaction is expected to result in a non-cash exceptional loss before tax of up to £1.5 million being included in the Group's results for its financial year ended 30 April 2014. The disposal is expected to have a small negative effect on earnings for the year ended 30 April 2015.
Andrew Thomis, Chief Executive Office of Cohort plc said:
"The disposal enables SEA to focus on its core defence and transport markets, and to build on its strong positions in naval communications, software, synthetic environments and other electronic systems. In Group terms it frees up resources and funding to pursue our growth strategy."