TIDMULE
RNS Number : 0789J
Ultra Electronics Holdings PLC
26 June 2017
24 June 2017
THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION,
RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC
OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.
Ultra Electronics Holdings plc
Response to recent press speculation
Ultra Electronics Holdings plc ("Ultra" or the "Group") notes
the recent speculation.
Ultra can confirm it is in advanced discussions to acquire the
whole of the issued share capital of New York Stock Exchange listed
Sparton Corporation ("Sparton") (Ticker: SPA). Sparton's Engineered
Components & Products ("ECP") division is Ultra's 50/50 partner
in the long-standing ERAPSCO joint venture. Should Ultra acquire
Sparton, it intends to sell Sparton's other business, the
Manufacturing & Design Services ("MDS") division. In 2014,
ERAPSCO was awarded an indefinite delivery indefinite quantity
contract by the US Navy which runs until 2019; US$664m of purchase
orders have been received in the first four years and a further
$160m of purchase orders are expected to be added in FY18.
Ultra's participation in the ERAPSCO joint venture has brought
an extensive knowledge, experience and proven performance to a
major customer, the US DoD. Ultra is in a unique position to
"preserve the status quo" for the US Navy and help to ensure that
the delivery of critical assets to this major customer is not
interrupted.
The principal reasons for Ultra pursuing the proposed
acquisition of Sparton include:
-- The ECP Division of Sparton is an excellent strategic fit
with Ultra's existing activities in a market segment in which the
Group has extensive experience and well established customers
-- Enhances Ultra's continuing relationship with a major customer
-- Increases exposure to the growing sonobuoy segment
-- Attractive financial returns for Ultra
-- Allows Ultra to secure an important revenue and earnings stream
The Directors of Ultra intend to maintain a prudent funding
structure for the Group and have a medium-term target range for a
net debt to EBITDA ratio of below 1.5x. The acquisition, if agreed,
is expected to be funded by Ultra's existing debt facilities and an
equity placing of new shares representing up to 9.99 per cent. of
Ultra's existing ordinary share capital.
The acquisition of Sparton and the disposal of MDS, if
completed, are not expected to alter Ultra's objective of returning
to a through-cycle target of 85% cash conversion in the medium
term.
The acquisition of Sparton by Ultra would be subject to certain
conditions including, inter alia, Ultra receiving certain approvals
including from relevant regulators and antitrust authorities as
well as approvals from both Sparton and Ultra shareholders.
A further announcement regarding Ultra's potential interest in
Sparton will be made if and when appropriate.
Ultra released a pre-close statement on 22 June 2017.
For further information contact:
Ultra Electronics Holdings
plc +44 20 8813 4300
Rakesh Sharma, Chief Executive
Amitabh Sharma, Group Finance
Director
Susan McErlain, Group Corporate
Affairs Director
(Mob: 07836 522 722)
Investec Bank plc
Christopher Baird
Keith Anderson +44 20 7597 5970
MHP Communications +44 20 3128 8756
James White
Notes to Editors
1. Further information about Ultra:
Ultra Electronics is an internationally successful defence,
security, transport and energy company with a long track record of
development and growth. The Group manages a portfolio of specialist
capabilities generating innovative solutions to customer needs.
Ultra applies electronic and software technologies in demanding and
critical environments ranging from military applications, through
safety-critical devices in aircraft, to nuclear controls and sensor
measurement. These capabilities have seen the Group's
highly-differentiated products contributing to a large number of
platforms and programmes.
Ultra has world-leading positions in many of its specialist
capabilities and, as an independent, non-threatening partner, is
able to support all of the main prime contractors in its sectors.
As a result of such positioning, Ultra's systems, equipment or
services are often mission or safety-critical to the successful
operation of the platform to which they contribute. In turn, this
mission-criticality secures Ultra's positions for the long-term
which underpins the superior financial performance of the
Group.
Ultra offers support to its customers through the design,
delivery and support phases of a programme. Ultra businesses have a
high degree of operational autonomy where the local management
teams are empowered to devise and implement competitive strategies
that reflect their expertise in their specific niches. The Group
has a small head office and executive team that provide to the
individual businesses the same agile, responsive support that they
provide to customers, as well as formulating Ultra's overarching,
corporate strategy.
Across the Group's three divisions, Ultra operates in the
following eight market segments:
-- Aerospace Land
-- Communications Maritime
-- C2ISR Nuclear
-- Infrastructure Underwater Warfare
2. Other information
The information contained within this announcement is deemed by
Ultra to constitute inside information as stipulated under the
Market Abuse Regulation (EU) No.596/2014. By the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain. The
person responsible for arranging for the release of this
announcement on behalf of Ultra is Sharon Harris, Company Secretary
and General Counsel.
This announcement may contain "forward-looking statements" with
respect to certain of Ultra's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of Ultra, including
amongst other things, United Kingdom domestic and global economic
business conditions, market-related risks such as fluctuations in
interest rates and exchange rates, the policies and actions of
governmental and regulatory authorities, the effect of competition,
inflation, deflation, the timing effect and other uncertainties of
future acquisitions or combinations within relevant industries, the
effect of tax and other legislation and other regulations in the
jurisdictions in which Ultra and its respective affiliates operate,
the effect of volatility in the equity, capital and credit markets
on Ultra's profitability and ability to access capital and credit,
a decline in Ultra's credit ratings, the effect of operational
risks and the loss of key personnel. As a result, the actual future
financial condition, performance and results of Ultra may differ
materially from the plans, goals and expectations set out in any
forward-looking statements. Any forward-looking statements made in
this announcement by or on behalf of Ultra speak only as at the
date on which they are made. Except as required by applicable law
or regulation, Ultra expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in Ultra's expectations with regard thereto or
any changes in events, conditions or circumstances on which any
such statement is based.
No statement in this announcement is intended to be a profit
forecast and no statement in this announcement should be
interpreted to mean that earnings or earnings per share of Ultra
for the current or future years would necessarily match or exceed
the historical published earnings or earnings per share of
Ultra.
Neither the content of Ultra's website (or any other website)
nor the content of any website accessible from hyperlinks on
Ultra's website (or any other website) is incorporated into or
forms part of this announcement.
Investec Bank plc ("Investec") is authorised by the Prudential
Regulatory Authority and regulated in the United Kingdom by the
Prudential Regulation Authority and the Financial Conduct Authority
and is acting exclusively for Ultra and no one else in connection
with the matters referred to in this announcement and will not be
responsible to anyone other than Ultra for providing the
protections afforded to its clients or for providing advice in
relation to the matters referred to in this announcement. No
representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or
will be accepted by Investec or by any of its respective affiliates
or agents as to, or in relation to, the accuracy or completeness of
this announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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