Defence specialist Ultra Electronics has announced it is in “advanced discussions” with NYSE-listed Sparton to acquire the company.
The FTSE 250 firm confirmed that it was in talks to acquire its joint venture partner in Erapsco, creating underwater sensors used to track and detect submarines for the US navy. Ultra said its participation in Erapsco has brought “an extensive knowledge, experience and proven performance to a major customer”, the US department of defence.
The company said it was in a “unique position to preserve the status quo” for the US navy and help continue an uninterrupted delivery of critical assets to the major customer.
The talks were first reported by Mergermarket.
Ultra said that if it acquires Sparton, it will sell the firm’s manufacturing and design services division, and hold onto the engineering components business.
The main reasons the company cited for its interest included the enhancement of Ultra’s relationship with a major customer, attractive financial returns, and allowing Ultra to secure “an important revenue and earnings stream”.
Last year, Sparton voiced the possibility of a sale, but said it had not set “a definitive timetable” for the closure of a deal.
And Ultra said in its statement that a further announcement regarding its potential interest in Sparton will be made “if and when appropriate”.