ESCO Announces Acquisition of Navy Supplier
July 08 2024 - 4:15PM
ESCO Technologies Inc. (NYSE: ESE) today announced that it has
agreed to acquire the Signature Management & Power (or the
“Business”) business of Ultra Maritime for a purchase price of $550
million. The transaction will be funded through cash on hand and
incremental debt, with committed financing in place.
Signature Management & Power is a well-established,
long-standing provider of mission-critical signature and power
management solutions for submarines and surface ships for the US
and UK naval defense markets. The Business is well positioned to
benefit from increasing global naval defense spending as the US and
its allies upgrade aging naval defense programs.
The Business’ Signature Management and Power Management product
lines and their deep engineering capabilities are highly
complementary to ESCO’s current naval programs. Signature
Management offers solutions for surface ships and submarines that
provide magnetic and electric field countermeasures to prevent
underwater mine and sensor detection. Power Management provides
innovative and highly-engineered motors that drive critical ship
propulsion systems with an ultra-quiet design ensuring low
vibration levels to increase stealth
capabilities.
The Business is headquartered in Long Island, New York, operates
out of four facilities based in the US and the UK, and has
approximately 410 employees. Signature Management &
Power will become part of ESCO’s Aerospace & Defense (A&D)
segment and is expected to have approximately $175 million of
revenue in calendar year 2024, with Adjusted EBITDA margins in
excess of A&D segment margins.
Bryan Sayler, ESCO’s President and Chief Executive Officer,
commented, “I’m excited to welcome the outstanding management team
and dedicated employees of Signature Management & Power to
ESCO. Their product offerings complement our existing submarine and
defense-related platforms, providing increased content on domestic
naval programs and expansion into international defense markets for
our A&D segment.
“Signature Management & Power is a long-tenured Navy
supplier with sole source content on major existing platforms and
significant growth opportunities on emerging international naval
programs. Their addition adds scale to our A&D portfolio and
continues our shift in business mix towards high growth, high
margin end-markets. We’ve been clear on our stated M&A goals
and we are very pleased that this acquisition squarely meets all of
them.”
Pete Crawford, Chief Executive Officer of Ultra Maritime
Signature Management & Power, said, “With our shared focus as a
trusted supplier with deep naval electronics capabilities, I am
excited to join the ESCO team and work together to continue
delivering for our customers’ key missions. The transaction also
represents a great outcome for our company and employees, with
significant opportunities for growth ahead of us.”
ESCO was represented by J.P. Morgan Securities LLC as exclusive
financial advisor and Bryan Cave Leighton Paisner LLP as legal
advisor on this transaction. Lazard served as sole financial
advisor and Weil, Gotshal & Manges (London) LLP served as legal
advisor to Ultra Maritime Signature Management & Power.
Conference CallThe Company will host a
conference call tomorrow, July 9, at 7:30 a.m. Central Time, to
discuss the acquisition. A live audio webcast and an accompanying
slide presentation will be available in the Investor Center of
ESCO’s website. For those unable to participate, a webcast replay
will be available after the call in the Investor Center of ESCO’s
website.
Forward-Looking StatementStatements contained
in this release regarding future growth, growth strategy,
expectations, beliefs and benefits resulting from the acquisition,
and other statements which are not strictly historical are
considered “forward-looking statements” within the meaning of the
safe harbor provisions of the Federal securities laws. There is no
assurance that the acquisition will be consummated, and there are a
number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements made
herein. The risks and uncertainties in connection with such
forward-looking statements related to the acquisition include, but
are not limited to, the ability and timing to consummate the
acquisition, including obtaining the required regulatory approvals
and financing to fund the acquisition; ESCO’s ability to promptly
and effectively integrate the acquired business after the
acquisition has closed, and ESCO’s ability to obtain expected cost
savings and synergies of the acquisition; operating costs, customer
loss and business disruption (including difficulties maintaining
relationships with the employees, customers or suppliers of the
acquired business) that may be greater than expected following the
consummation of the acquisition; and other risks and uncertainties
described in Item 1A, Risk Factors, of ESCO’s annual report on Form
10-K for the year ended September 30, 2023. ESCO is a
global provider of highly engineered products and solutions serving
diverse end-markets. It manufactures filtration and fluid control
products for the aviation, Navy, space, and process markets
worldwide and composite-based products and solutions for Navy,
defense, and industrial customers. ESCO is an industry leader in
designing and manufacturing RF test and measurement products and
systems; and provides diagnostic instruments, software and services
to industrial power users and the electric utility and renewable
energy industries. Headquartered in St. Louis, Missouri, ESCO and
its subsidiaries have offices and manufacturing facilities
worldwide. For more information on ESCO and its subsidiaries, visit
ESCO’s website at www.escotechnologies.com.
SOURCE ESCO Technologies Inc.Kate Lowrey, Vice President of
Investor Relations, (314) 213-7277
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