Cohort Buys J+S Limited

Cohort, the independent technology group, has acquired J+S Limited, an independent systems and in-service support provider for the defence and offshore energy markets, from its shareholders for a cash consideration of £12 million.

What were the reasons for the acquisition?

The acquisition of J+S is in line with the Group’s stated strategy to accelerate its growth by making targeted acquisitions, complementing organic growth, whether as stand-alone members of the Group or as “bolt-in” acquisitions to the existing subsidiaries. This strategy of investing the Group’s significant cash resources (which stood at over £14m as at 31 August 2014) partly in acquisitions is expected to provide enhanced returns to shareholders.

Cohort said: “J+S meets our stated criteria for bolt-in acquisitions where we look for businesses with capabilities and/or customer relationships that are closely linked to one of our existing subsidiaries. J+S’s defence capabilities and products, notably its sonar array products, well-established manufacturing capability and long-term customer support relationships, are highly complementary to SEA’s. We would expect to integrate J+S fully within SEA, leading to both cost savings and benefits from shared access to markets and technologies.”

The terms of the acquisition are as follows:

J+S was acquired from its shareholders on a cash free / debt free basis for a consideration of £12m. This will be paid using Cohort’s existing financial resources which included over £14m of net cash as at 31 August 2014 (after payment of the £6.0m initial consideration for the MCL transaction). Cohort retains unutilised banking facilities comprising an overdraft facility of £7.5m.

Andrew Thomis, Chief Executive Officer of Cohort, said:

“By integrating J+S into SEA, we aim to accelerate the growth of the combined business by enhancing its product and service offerings and broadening its international reach. The transaction will consolidate SEA’s position as a leading international provider of naval defence technology.”

J+S is a leading UK supplier of systems and in-service support for the defence and offshore energy markets. Its defence products include sonar systems, torpedo launchers and a range of other naval equipment.

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Press Release, October 02, 2014; Image: J+S