Cohort completes acquisition of controlling stake in Portuguese defence business
Published 28th June 2016
Further to its announcement on 7 March 2016, Cohort, the independent technology group, is pleased to announce that it has acquired 56.89% of the share capital of Empresa de Investigação e Desenvolvimento de Electrónica, S.A., (“EID”), for a consideration of €10.7m (£8.9m). EID is a Portugal based supplier of advanced electronics, communications and command and control products and systems for the global defence market. The acquisition is from existing shareholders EFACEC Capital S.G.P.S. S.A and Rohde & Schwarz GmbH, in line with the terms set out in the original acquisition announcement of 5 August 2015.
Cohort has agreed in principle to acquire a further stake from two agencies of the Portuguese
Government on the same terms, such that its final holding in EID will be 80% at a total cost of €15m
(£12.5m). Timing and completion of this further transaction is dependent on the necessary approvals from the Portuguese government, and we will make a further announcement in due course. As part of this process we have agreed to negotiate certain rights for the Portuguese government in order to protect its shareholding and the interests of the Portuguese state.
Funding of and background on EID
As previously announced, the consideration is to be funded from existing cash resources and debt facilities. We recently secured a new three year £25m debt facility with RBS, Barclays and Lloyds to support investment in acquisitions and organic growth. EID will join MASS, MCL, SEA and SCS as the fifth member of the Cohort Group. EID is a cash generative business with a strong order book, healthy sales pipeline, highly competent and experienced defence engineering workforce and a modern, low cost, electronics manufacturing facility. The acquisition provides Cohort with the ability to offer a wider range of new and complementary capabilities to defence and security customers worldwide, whilst adding Portugal as a new home market for the Group’s products, systems and services. It is expected to be earnings enhancing in Cohort’s financial year ending 30 April 2017.
Cohort has also today issued its final results for the financial year ended 30 April 2016.
Andrew Thomis, Chief Executive of Cohort, said:
“The acqusition of a majority shareholding in EID marks significant progress in what has been a drawn out process. We are working with the Portuguese Government to complete the acqusition of a further stake in due course and confirm that the original rationale for the acquisition remains robust. We very much look forward to welcoming EID into the Group, and to working with them to realise the exciting growth opportunities that this transaction will create.”