BAE Sells Radar Subsystems Provider to Cobham

In late December 2007, BAE Systems signed a definitive agreement to sell its Surveillance and Attack business in Lansdale, PA to Cobham Defence Electronic Systems Corporation, for $240 million on a debt and cash free basis, payable on completion. The goodwill arising on completion is an allowable tax expense with an estimated net present value of $45 million, resulting in an effective price of $195 million. For the year ended Dec 31/06, BAE’s S&A division generated revenue of $91 million, and profits of $14 million, with gross assets of about $34 million as of Sept 30/07. The effective price represents a multiple of approximately 11.1x 2006 EBITDA.

The cash transaction was expected to close in the first quarter of 2008, following receipt of regulatory approvals. That has now happened.

Lansdale’s 400 or so employees provide broadband high-power transmitter and radio frequency front-end systems for military aircraft.