Ultra Electronics To Buy Kratos Defense & Security's Unit EPD For $265 Mln

(RTTNews) - Ultra Electronics Holdings Plc. (ULE.L) Monday said it agreed to acquire the Electronic Products Division of Kratos Defense & Security Solutions (KTOS) for a cash consideration of up to $265 million.

Under the terms of the acquisition, Ultra will pay $260 million in cash at closing, and up to another $5 million in cash expected to be paid over the next 12 months.

The transaction is subject inter alia to US regulatory approvals, and is expected to close in the third quarter of 2015.

The deal is expected to establish a major presence in the growing market of electronic warfare.

EPD, formerly Herley Industries Inc., is a designer and producer of RF and microwave integrated systems and subsystems for use in EW, radar, communication, missile, flight test and simulation applications. The company, headquartered in Massachusetts, US, employs 433 people across four offices in the US and UK.

In the year 2014, EPD generated EBITDA of $22 million, Profit Before Tax of $11 million and reported gross assets of $217 million.

Following the deal, EPD will be integrated into Ultra's Tactical & Sonar Division. EPD will be renamed Ultra Electronics Herley Industries and its current head, Richard Poirier, will remain as President.

The company expects the combined technologies under Ultra's ownership will provide opportunity to gain market share.