Ultra Electronics Acquisitions Continue To Spark Interest

Ultra Electronics Holdings (LSE:ULE) shares dipped, then recovered today as the defence firm announced its latest in a recent series of acquisitions. After dropping several percentage points in the morning, the price per share had gained 14.00 pence to 1,689.00p by mid-afternoon. The company has exhibited strong growth in share price over the past five years.

The Acquisition(s)

Ultra announced today that they are purchasing RFI, a US based subsidiary of DGT Holdings for $12.5 million USD. RFI manufactures high-voltage power conversion subsystems. Its products include electronic filters, high voltage capacitors, pulse modulators, transformers and reactors used in industrial, military, medical, and other applications. The acquisition adds yet additional complementary products to support the strategic growth plans of the Ultra Group which acquired 4 other companies in 2011 “to augment Ultra’s cyber security capability.” The company’s strategy is “having many eggs in many baskets” so that it has superior resilience during difficult economic conditions. During 2012 Ultra is focusing on non-defence related markets because of tightened government spending during the US presidential election year. It was only 9 days ago that Ultra announced the acquisition of satellite communication company Giga Communications Ltd for £12.4 million cash and up to £24.6 million over the next two years. On the 5thDecember 2011, the company reported the acquisitions of Special Operations Technology, Inc. for $38 million and Zu Industries, Inc., a manufacturer of cyber surveillance systems, for $76.6 million. The SOTECH acquisition broadens Ultra’s penetration into solutions for global counter-terrorism and counter-narcotics missions. Ultra’s other major acquisition was the $75 million September 2011 purchase of AEP Networks Ltd., a provider of secure network communications services to more than 5,000 blue chip and government customers in over 60 countries.

Corporate Comments

Ultra CEO Rakesh Sharma commented that “I am pleased that we have reached agreement to acquire RFI. It has strong market and technical synergies with EMS with which it will be combined to the benefit of both businesses.” RFI President & CEO John Quicke added that “We believe that the proposed sale will provide a home for our RFI business and employees that will allow the business to grow and thrive while also returning value to our shareholders.”

Company Spotlight

Ultra Electronics Holdings plc is a group of specialist businesses designing, manufacturing and supporting electronic, electro-mechanical and software systems, sub-systems and products for defense, security, transport and energy applications worldwide.

References
↑ RTT News
↑ Official Company Information
↑ Market Watch

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