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Ultra Electronics proposes acquisition, £133.7m placing

07 July 2017 07:15

Ultra Electronics has entered into a conditional merger agreement to acquire NYSE-listed Sparton for $23.50 a share in cash, valuing that company's total equity at about $234.8m.

As part of the deal, Ultra would assume Sparton's net debt at completion. Adjusting for the targeted cost savings, this equated to a pro forma FY2016 EV/EBITDA multiple of 7.6-times.

Ultra also announced the launch of a placing with institutional investors of 7.0m new shares at 1950p each.

Net proceeds would be used to part-fund the acquisition, with the remaining acquisition consideration being funded through drawdown under the Ultra Group's existing bank facilities.

The placing was not conditional upon completion.

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