LONDON: Cohort plc, the independent technology group, has agreed to acquire Wärtsilä ELAC Nautik GmbH (ELAC), a Germany-based market leader in naval surface ship and submarine sonar systems for a headline price of €11.25 million.
ELAC, a leader in sonar systems technology for naval surface ships and submarines, will join the Group as Cohort’s sixth standalone subsidiary.
ELAC is being acquired from Wärtsilä Corporation, a global leader in smart technologies and complete lifecycle solutions for the marine and energy markets.
Cohort has agreed to acquire 100 percent of ELAC for a headline price of €11.25 million. There is no earn-out. The actual consideration will be adjusted to take into account the pension deficit and, based on completion accounts, the cash and working capital in the business at closing.
On completion, Cohort will pay an agreed initial consideration of €10.5 million which is being funded through a combination of own cash and the Group’s £30 million revolving credit facility, with the Group expecting additionally to draw down on its £10 million accordion facility. The cash received with the business is expected to be similar to or exceed the total consideration payable to the seller.
Accordingly, had the acquisition completed on 31 October 2019, the Group would have had net debt of approximately £5 million.
Completion of the acquisition is dependent on certain conditions, including German government approval. Subject to such approval and the other conditions being met, it will complete on or before 30 June 2020.
The acquisition of ELAC is in line with Cohort’s stated strategy to accelerate its growth by making targeted acquisitions, complementing organic growth, whether as standalone members of the Group or as “bolt-in” acquisitions to existing subsidiaries.
Andrew Thomis, Chief Executive Officer of Cohort, said: “The acquisition of ELAC is a significant step for Cohort, adding a sixth standalone business to our growing and profitable portfolio. It is highly complementary to our core capabilities in defence and security, with a leading position in the attractive and growing submarine and surface sonar markets, strengthening and broadening the Group’s existing capabilities in maritime systems.
“We are looking forward to working with the ELAC team to realise the exciting growth opportunities that this transaction will create.”