UK-based aerospace firm Cobham has announced the proposed acquisition of US firm Aeroflex for a reported £548m.
Cobham announced on Monday (May 20) that it has entered into a conditional agreement to buy Aeroflex which produces test equipment, RF and microwave integrated circuits, components and systems used for wireless communications for industries including space, avionics, aerospace, defence, commercial wireless communications and medicine.
Aeroflex motors and wireless systems were used in the wheels, antenna and robotic arm joints of Nasa’s Mars rover, Curiosity.
The deal includes taking on Aeroflex’s £321m in debt. If the deal progresses, Cobham will pay $10.50 per Aeroflex share, 26.1% more than the closing stock price on Monday (MAY 19), the day before the announcement.
Cobham Chief executive Bob Murphy said the deal was in line with its strategy of buying firms in industries that “increasingly demand more data, connectivity and bandwidth.”
The deal comes after Cobham bought Danish satellite telecoms group Thrane & Thrane for £275m in 2012 and Axell Wireless for up to £85m last year.
However, the Law office of Brodsky and Smith announced on Tuesday that it is investigating potential claims against the Board of Directors of Aeroflex Holding Corp. Under the terms of the transaction, Aeroflex shareholders will receive $10.50 in cash for each share of Aeroflex stock they own. The investigation concerns possible breaches of fiduciary duty and other violations of state law by the Board of Directors of Aeroflex for not acting in the Company’s shareholders’ best interests in connection with the sale process. The firm alleges that the transaction undervalues Aeroflex given the Company’s increase in net income and cash flow from operations.
Cobham was unavailable to comment on the claim.