Ultra calls off Sparton acquisition
By
Ross Wilkers
Britain-based Ultra Electronics walks away from its $234 million deal for military electronics maker Sparton Corp., who will continue efforts to find a buyer.
British defense contractor Ultra Electronics has terminated its $234 million acquisition of military electronics maker Sparton Corp. in part on concerns the Justice Department would not give antitrust clearance for the deal, the companies said Monday.
The deal would have created a consolidated supplier of underwater warfare technologies such as anti-submarine sonar systems to the Navy.
Schaumburg, Illinois-based Sparton plans to re-engage with parties that showed an interest in acquiring all or part of Sparton and “are in position to expeditiously proceed to effect such a transaction,” the company said in its statement.
Sparton said that during DOJ’s review process, the Navy recommended both companies build up their own abilities to build sonobuoys and work toward elimination of their use of the ERAPSCO joint venture for that.
Both companies expected DOJ to seek an injunction in court to block the merger after department staffers said they would recommend the deal be stopped.
In November, the deal received clearance from the Committee on Foreign Investment in the U.S. shortly after Ultra and DOJ agreed to certain time targets as part of the antitrust regulatory review.
Sparton reported $397.5 million in revenue last year and $26.7 million in adjusted earnings before interest, taxes, depreciation and amortization expenses.
Shares in Sparton traded 26 percent lower early Monday afternoon.