Britain’s Cobham plc yesterday said it has agreed to acquire SPARTA, Inc., for a net price of $416 million in cash, expanding its business base in the United States, particularly in the intelligence and missile defense markets.
Cobham said that its U.S. sales for the past year, if SPARTA is included, are $1.4 billion. SPARTA, which is based in Washington, D.C., has 1,200 employees. The employee-owned company had operating earnings of $28.6 million on $297.3 million in sales in 2006.
Cobham, which has accelerated the growth of its U.S.-based operations through several recent acquisitions, said that SPARTA will continue to drive growth through acquisitions.
SPARTA’s “strong incumbent management will provide Cobham with an exciting platform for growth in the Systems Engineering and Technical Assistance segment, which is complementary to our existing U.S. intelligence and defence capabilities,” Allan Cook, Cobham’s CEO, said in a statement. “This is a major step forward in the implementation of Cobham’s technology strategy and the creation of a significant Tier 2 business supplying the U.S. DoD and intelligence markets.”
Cobham said the acquisition, which is expected to close in the second quarter of 2008, will give it a “leading position” in the intelligence and missile defense markets for systems engineering. Cobham also said SPARTA will allow it to leverage its new customers with its existing technologies.
Most of SPARTA’s work with the U.S. government is classified. In the intelligence arena SPARTA provides planning and direction, collection, processing, analysis and production of information. Its other services for this market include providing tools for network and information security and the development of protection systems using modeling and simulation. Cobham said that SPARTA also presents it with growth opportunities in the electronic and signals intelligence areas.
In the missile defense segment SPARTA’s capabilities include systems engineering, modeling and simulation, test and evaluation, operations and sustainment planning and battle management primarily to the Missile Defense Agency.
SPARTA also provides training, test and evaluation services for tactical systems, including unmanned aircraft systems. The company also is involved in engineering and development of Net Centric Warfare systems, modeling and simulation of space systems. SPARTA also provides composite components for the Air Force F-22 and the Joint Strike Fighter programs.
Following the completion of the purchase, SPARTA will operate as a separate strategic business unit within Cobham’s North American division.
Merrill Lynch served as SPARTA’s financial adviser on the deal.