Engineering and defence group Chemring is poised to become a major force in the US through the purchase of decoy specialist Kilgore Flares.
Hampshire-based Chemring has agreed to spend $23m (£15.6m) to buy Kilgore from its current owner Alliant Techsystems. The two companies hope to complete the deal by early next month.
Chemring announced the acquisition as it unveiled pre-tax profits up 65% to £7.1m for the year ending October. Turnover rose by £5m to £67m.
Chairman Ken Scobie claimed the purchase of Kilgore will make Chemring ‘the undisputed world leader’ in expendable countermeasure devices for air, naval and land-based systems.
Scobie said this is a high-growth sector of the defence industry, with governments investing more in countermeasures to protect their hugely costly military hardware. Tennessee-based Kilgore is the biggest supplier of conventional infra-red decoys to the US Department of Defence. It has a $38m order book and recently won a development contract for the F-22 Raptor fighter aircraft.
Kilgore hit a rocky patch in mid-1999 when a process problem forced it to suspend production, contributing to an exceptional loss of $1.6m. Chemring said the problem has now been resolved and all Kilgore’s facilities are fully operational.
The company believes the acquisition will complement its other US business, Alloy Surfaces, and give it a strong platform to compete internationally in the air decoy market.
Back at home, Chemring said its Marine Safety division should benefit from the launch of new electronics products. The company has concentrated on developing 406MHz technology used in Global Positioning Systems and other location and rescue devices.
Chemring expects forthcoming maritime legislation, including EU fishing vessel safety requirements, to open new markets for its systems.