Shares in Gooch & Housego PLC (AIM:GHH) rose 38% to 1,206.5p after it agreed to a £345.6 million takeover by Arlington Capital Partners, the Washington-based private equity firm, in the latest acquisition of a UK-listed defence-linked company by American buyers.
The AIM-quoted photonics specialist, which makes precision optics for aerospace and defence, industrial and life sciences markets, has recommended a cash offer of 1,230p per share.
Including a 4.9p interim dividend, shareholders will receive a total of 1,234.9p per share, a 41.3% premium to Wednesday's closing price of 874p.
The board said it had rejected a series of unsolicited proposals from Arlington before granting due diligence access following the 1,230p approach.
Directors said the offer provided immediate and certain value in cash while recognising the risks of delivering the company's strategy as a smaller AIM-listed business, including customer programme timing, supply chain constraints and the pace of recovery in certain end markets.
The board also pointed to the challenges of competitive remuneration as a UK-listed company of its size, the liquidity of its shares and the broader UK small and mid-cap market backdrop.
Chairman Gary Bullard said the offer recognised the value of the company's strategy, market position and long-term growth prospects.
Somerset-based Gooch & Housego, founded in 1948, supplies mission-critical optics used in imaging and sighting systems, directed-energy applications, countermeasures and space laser communications.
Its order book stood at £167.3 million at the end of March, up 16.5% at constant currency, with aerospace and defence revenue jumping 51.7% in the first half.
Arlington has raised more than $14 billion of committed capital and has completed over 200 transactions in 27 years, with a focus on aerospace and defence, government services, healthcare and software.
Managing partner Peter Manos said Gooch & Housego's technologies were increasingly critical to next-generation optical and sensing applications.
The deal values the company at 25.9 times adjusted operating profit on an enterprise value of £400.5 million.
The acquisition requires clearance under the UK's National Security and Investment Act and US merger control approval, and is expected to complete in the fourth quarter of 2026.
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