Elbit Systems' U.S. arm inks $380M deal for Sparton

Elbit Systems’ U.S. subsidiary agrees to pay $380 million for electronic system and sonobuoy maker Sparton Corp., which was acquired itself last year by a private equity firm.

Elbit Systems’ U.S. subsidiary has agreed to acquire electronic system and sonobuoy maker Sparton Corp. for $380 million to gain an increased footprint with the Navy and other allied military services.

In a release Wednesday, Elbit Systems of America said the necessary regulatory approvals could require “a number of months” to get through before deal closure.

Sparton focuses on products for undersea warfare and ruggedized displays for defense and industrial use.

De Leon Springs, Florida-based Sparton was acquired in 2019 by private equity firm Cerberus Capital Management, which has since supported the contractor in the divestiture of its contract manufacturing business to become a pure-play defense supplier.

This agreement represents Cerberus’ second major exit in recent months, including the sale of DynCorp International to Amentum that closed in November.

Sparton had sought a buyer for two years before the sale to Cerberus and had an agreement in place to be purchased by Ultra Electronics that was terminated in Spring 2018 on concerns that antitrust regulators would not give their approval.

Moelis & Company LLC and Evercore served as the financial advisers to Sparton with Kirkland & Ellis LLP the legal adviser on the sell-side. Covington & Burling LLP acted as legal adviser to Elbit Systems of America.