FTSE 250 British defence firm Ultra Electronics has agreed a $234.8m (£180.6m) deal for US company Sparton.
Ultra announced this morning that it had entered into a conditional merger agreement to acquire the NYSE-listed company for $23.50 per share in cash. As part of the deal, Ultra will assume Sparton's net debt at completion, and it plans to offload the US company's manufacturing and design division by the start of next year.
Ultra has worked with the ECP division of Sparton in a joint venture for over 10 years. Last month, the FTSE 250 firm confirmed 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.
Rakesh Sharma, chief executive of Ultra, said: "The acquisition of Sparton brings strategic and financial benefits to Ultra and the Ultra board recommends this acquisition to our investors."
Ultra's acquisition of Sparton 'preserves the status quo' for the US navy and ensures continuity and reliability of supply to it and our other international customers. The unified management structure and increased focus are expected, over time, to bring benefits beyond those that we have been able to achieve through the JV.
Ultra thinks the deal will enhance its continuing relationship "with a major customer", and that it also increases exposure to the growing sonobuoy segment.
Meanwhile, Sparton boss Joseph Hartnett said the deal will create "a more robust supplier" to the US department of defence.
The acquisition will be subject to relevant anti-trust, regulatory and shareholder approvals, with the deal expected to go through by 1 January 2018.