---ADDS CEO COMMENTS, SHARE PRICE (ALSO SEE VIDEO INTERVIEW)---
The defence technology specialist Cohort (LON:CHRT) is making its first acquisition outside the UK with the €19mln (£13.3mln) takeover of Investigação e Desenvolvimento de Electrónica (EID).
The addition of Portuguese military communications business, which will be funded using debt, is expected to be immediately earnings enhancing.
Cohort chief Andrew Thomis said the deal was an “important step” for the company.
“It is a very complementary business,” he told Proactive Investors.
“EID is involved in tactical communications for both armies and navies. It is a very strongly export-orientated company, with strong products and strong technology.
“It is also complementary with the other communication-related activities we have going on within the Cohort group.
The transaction, which requires the sign-off by the authorities in Portugal, should be completed by the end of next month.
Last year EID posted sales of €14.5mln, giving earnings before interest and tax of €1.4mln, while at the end of March this year it had been commissioned to carry out work worth €12.4mln in revenues. Its order book stands at around €35.2mln.
“It has a strong order book and a good portfolio of further opportunities and we believe it is very well placed for growth,” CEO Thomis said in an interview with Proactive’s Sarah Lowther.
“What we are looking at is adding a new set of export relationships to the group, which we can work with our other portfolio of products on.
“We also expect to be able to help EID in the markets where we are very strong and of course it brings a new domestic market to Cohort in Portugal.”
Cohort is currently four businesses in one - the largest in terms of profitability is MASS, the high-technology business whose specialities include electronic warfare and electronic security.
SCS is the consultancy business, whose clients include the MoD and NATO and the European Defence Agency and which has been given the role of assessing the airworthiness of Britain’s fleet of joint strike fighters.
Then there is SEA, which specialises in high-end communications, and is responsible for equipment used on board Britain’s fleet of Astute nuclear submarines.
MCL, meanwhile, is an expert in sourcing, design and integration of electronic and surveillance technology, as well as field support and training.
EID will provide a fifth leg to the business with its specialism in naval, tactical and field communications. It employs 138 people.
The City appeared to like the EID deal with the shares, up 47% in the year to date, rising a further 4% earlier today.
“It is a fair price for what is a good business with good growth prospects,” said Thomis.