Cohort PLC Acquisition and Trading Update (5263X)

TIDMCHRT

RNS Number : 5263X

Cohort PLC

27 November 2017

27 November 2017

Cohort plc

("Cohort" or "the Group")

Cohort completes second stage of EID acquisition and trading update

Further to its announcement on 28 June 2016, Cohort, the independent technology group, is pleased to announce that it has acquired a further 23.09% of the share capital of Empresa de Investigação e Desenvolvimento de Electrónica, S.A., ("EID"), for a cash consideration of EUR3,974,000. This brings the Group's holding to 80% at a total cost of EUR15,185,000, with the Portuguese government holding the remaining 20%. As previously, announced, we have agreed that the Portuguese government should have certain rights in order to protect its shareholding and the interests of the Portuguese state, including the right to appoint a director to the Board of EID.

EID is a Portugal based supplier of advanced electronics, communications and command and control products and systems for the global defence market. The acquisition is from existing shareholders Empordef - Empresa Portuguesa de Defesa (S.G.P.S.), S.A. and IAPMEI - Agência para a Competitividade e Inovação, I.P. The terms are the same as those set out in the original acquisition announcement of 5 August 2015. The consideration is to be funded from existing cash resources and debt facilities.

The Group remains on course to meet the Board's expectations for the year ending 30 April 2018. Further information will be provided with the Interim Statement for the six months ended 31 October 2017 which will be published on 13 December.

Andrew Thomis, Chief Executive of Cohort, said:

"We are pleased to have completed the second stage of the EID acquisition. Since joining Cohort in 2016, it has been performing well and the team has demonstrated the quality of its specialist skills. With a good pipeline and exciting growth opportunities in the remainder of our financial year, we look forward to benefiting further from the strong customer relationships, high quality products and excellent people that EID brings to the Group."

Ends

For further information please contact:

 
 Cohort plc                      0118 909 0390 
 Andy Thomis, Chief Executive 
 Simon Walther, Finance 
  Director 
 Investec Bank plc               020 7597 5970 
 Keith Anderson / Daniel 
  Adams 
 MHP Communications              020 3128 8100 
 Reg Hoare / Ollie Hoare 
 

NOTES TO EDITORS

Cohort plc (www.cohortplc.com) is the parent company for four innovative, agile and responsive businesses working primarily for defence, wider government and industry clients.

-- EID (www.eid.pt) - a Portugal based supplier of advance electronics, communication, and command and control products and systems for the global defence market. Cohort acquired a majority stake in June 2016.

-- MASS (www.mass.co.uk) - a specialist defence and technology business, focused mainly on electronic warfare, information systems and cyber security. Acquired by Cohort in August 2006.

-- MCL (www.marlboroughcomms.com) - an expert in sourcing, design and integration of communications and surveillance technology, as well as support and training for UK end users including the MOD and other government agencies. MCL has been part of the Group since July 2014.

-- SEA (www.sea.co.uk) - an advanced electronic systems and software house operating in the defence, transport and offshore energy markets. Acquired by Cohort in October 2007.

Cohort (AIM: CHRT) was admitted to London's Alternative Investment Market in March 2006. It has its headquarters in Berkshire and employs in total around 800 core staff there and at its other operating company sites in Bristol, Cambridgeshire, Devon, Lincolnshire, Somerset, Surrey, Scotland and Portugal.

Overview of EID

EID is a hi-tech company with more than 30 years' experience in the design, manufacture and support of advanced, high performance command, control and communications equipment for the global defence and security market. Customers for its naval communications systems include the Royal Navy and other NATO navies including those of Portugal, the Netherlands, Spain and Belgium. It has also supplied a number of other export customers; in total its products equip over 120 warships worldwide, and its army products have also enjoyed wide domestic and export success.

EID operates through two market-facing divisions:

   --      Naval Communications: Integrated command, control and communications systems for warships. 

-- Tactical Communications: Radio equipment, field communications equipment, vehicle intercom systems and networking equipment, turnkey systems.

These divisions are supported by an internal production and logistics unit. EID operates from an engineering facility near Lisbon, and has a regional office in Malaysia. It has around 140 employees.

Background to and reasons for the acquisition

Cohort's Board believes that further investment in carefully targeted acquisitions will generate enhanced returns to shareholders. The Group seeks to acquire agile, innovative businesses operating in the defence and security sectors with growth potential and a degree of sustainable competitive advantage. EID meets all of these criteria.

The Board believes that the acquisition of EID will provide a number of benefits:

   --      A portfolio of complementary products and systems with a strong global market presence 

-- Good relationships in a number of important export markets in Europe, Middle East, Africa, Southeast Asia and Latin America

-- A new home market in Portugal and access to EID's international customers for the Group's products and services

   --      Access to a highly competent and experienced defence engineering workforce 
   --      A modern electronics manufacturing facility certified to the relevant NATO standards 

This information is provided by RNS

The company news service from the London Stock Exchange

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November 27, 2017 02:00 ET (07:00 GMT)