TT Electronics plc (LON:TTG), a global provider of engineered electronics for performance critical applications, has acquired the Power and Control business of Ferranti Technologies Ltd, from Elbit System UK Ltd for £9.0 million in cash, subject to customary post-completion working capital adjustments.
Highlights of the Acquisition
Ferranti P&C, based in Greater Manchester, designs and manufactures mission-critical complex power and control sub-assemblies for blue chip customers in high-reliability and high-performance end markets, primarily aerospace and defence. One of the principal benefits of the acquisition is that it brings highly skilled employees who provide full-service capabilities from design, assembly, manufacturing, and testing including environmental stress screening and inspection through to service.
Ferranti P&C adds further technology capability, IP and scale to TT’s Power Solutions business, which is one of our focus areas for structural growth. It has valuable long-term customer relationships and programmes with leading global aerospace, defence and industrial OEMs operating in highly regulated markets with significant barriers to entry through necessary industry accreditations and customer approvals.
The acquisition is expected to be modestly earnings enhancing, to generate mid-teens operating margins and to generate a return on invested capital in excess of the Group’s WACC in year 1. We expect to generate cost synergies of circa £0.4 million by year 3.
TT confirms that trading for the full year was in line with the update provided on 23 November 2021.
Commenting on the acquisition, Richard Tyson, TT Electronics Chief Executive Officer said:
“We are pleased to announce the acquisition of Ferranti’s Power and Control business which is in line with our strategy for growth at higher margins and moving up the value chain in our target end markets in A&D. This highly attractive platform adds scale and technology capabilities to our Power Solutions business in Europe. We expect to achieve our financial return hurdle rate in the first full year.
I am delighted to welcome Ferranti Power and Control’s highly skilled team to TT as we continue to build differentiated capabilities and engineer smarter solutions for our customers.”