Remec has entered into a merger agreement through which Chelton Microwave Corporation will acquire Remec’s Defense & Space subsidiary for approximately $260 million in cash.
Chelton Microwave is a US subsidiary of Chelton, a division of the UK aerospace and defence company Cobham.
Remec Defense & Space employs over 1,000 people developing and producing advanced microwave products for defence and avionics applications in missile, radar, electronic warfare, communication, navigation and identification systems. Key customers include to Lockheed, Boeing, Raytheon, BAE Systems, Northrop Grumman and the US Department of Defense.
All of the employees are expected to remain with the business, which will continue to operate as Remec Defense & Space.
“The divestiture of the Defense & Space business will provide significant value to Remec shareholders,” said Thomas Waechter, President and Chief Executive Officer of Remec. “It is the company’s intention, subject to business and legal requirements, to distribute a large portion of the sale proceeds directly to the shareholders shortly after the transaction is completed.
Waechter continued: “This transaction permits executive management to focus on restoring the commercial wireless business to profitability, while continuing to evaluate strategic alternatives.”
The transaction is subject to the approval of Remec’s shareholders, as well as customary closing conditions and certain regulatory approvals. Remec and Chelton expect the deal to close by March 2005.