A US company has agreed to buy a division of Cobham for $2.8 billion after the contentious sale of the aerospace group to a private equity firm last year.

Eaton Corp is acquiring Cobham Mission Systems (CMS), which makes air-to-air refuelling equipment.

Cobham, founded in 1934, was itself bought by Advent International for £4 billion in 2020. There had been concerns before the deal that the group would be broken up by the private equity firm.

The sale triggered opposition from the Cobham family. Lady Cobham, whose late husband, Sir Michael, was the son of the founder Sir Alan Cobham and ran the group, helped to persuade the government to refer the takeover to the competition regulator.

After the takeover, which was completed last January, Advent began moves to restructure the group into nine divisions. One of these was CMS. Based in the US, it employs about 2,000 and operates mainly in the defence sector.

Eaton, an engineering group domiciled in Ireland but with its operational headquarters in Ohio, makes products including explosion-proof instrumentation, pumps, motors and hydraulic power units. It said the purchase price was about 14 times CMS’s 2020 earnings before interest, taxes, depreciation and amortisation, and 13 times estimated 2021 earnings.

Cobham said: “Eaton’s strong aerospace and defence experience and deep balance sheet makes it a good long-term home to continue growing the CMS business.”

The deal is expected to close in the second half of this year.

Source: The Times