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Ultra to acquire Sparton

Ultra has entered into a conditional merger agreement to acquire Sparton in a transaction, valuing Sparton’s total equity at approximately USD 234.8 million
As part of the acquisition, Ultra will assume Sparton’s net debt at completion.

Sparton has two reportable business segments: Engineered Components & Products (ECP) and Manufacturing & Design Services (MDS). ECP is Ultra’s 50/50 partner in the long-standing ERAPSCO joint venture, which develops, manufactures and supports all US sonobuoys supplied to the US Department of Defense (US DoD). Ultra’s intention is to dispose of the MDS division by the end of Q1/2018 as it considers it to be non-core to the combined group going forward and is in advanced discussions with several interested parties in relation to this disposal.

Rakesh Sharma, Chief Executive of Ultra, commented: “I am pleased to announce today the proposed acquisition of Sparton and associated equity placing. The acquisition of Sparton brings strategic and financial benefits to Ultra and the Ultra Board recommends this Acquisition to our investors. Ultra has worked with the ECP Division of Sparton, in a joint venture, for over 10 years. This close relationship has benefitted our major customer, the US DoD, through more effective use of the available engineering budget. Ultra's acquisition of Sparton "preserves the status quo" for the US Navy and ensures continuity and reliability of supply to it and our other international customers. The unified management structure and increased focus are expected, over time, to bring benefits beyond those that we have been able to achieve through the JV.”

Joseph Hartnett, Interim Chief Executive of Sparton, commented: “The combination of these two enterprises represents a unique opportunity to create a more robust supplier to the US DoD while simultaneously positioning the combined businesses to utilize assets in a much more efficient manner.”

The Acquisition is subject to relevant anti-trust, regulatory and shareholder approvals.


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September 25 2018 7:10 pm V11.1.0-2