Finland’s technology group Wärtsilä has announced the divestment of shares in Wärtsilä ELAC Nautik GmbH to Cohort plc, a UK listed company specializing in defense, security and related market sectors.
The Germany-based company which focuses on naval surface ship and submarine sonar systems will be sold for a price of €11.25 million.
ELAC Nautik became part of Wärtsilä as a result of the acquisition of L-3 Communications MSI in 2015. The company’s main market focus is on hydroacoustic products, including sonars, underwater communication systems and echo systems for small and medium sized military submarines.
In announcing the divestment, Antti Kuokkanen, Vice President, Electronics, Entertainment and Processing, Wärtsilä Marine said:
“Wärtsilä, through its Smart Marine Ecosystem approach, is leading the marine industry’s transition into a new era of high efficiency, greater safety, and outstanding environmental performance. This is our core strategy for the company’s Marine Business, and we are aligning our portfolio to those growth businesses that can drive this transition.”
While the ELAC Nautik business has no clear synergistic link to Wärtsilä’s Smart Marine activities in transforming the marine sector, it fits very well into Cohort’s product mix. The move is said to be in line with Cohort’s stated strategy to accelerate its growth through targeted acquisitions.
“The acquisition of ELAC is a significant step for Cohort, adding a sixth standalone business to our growing … portfolio,” Andrew Thomis, Cohort Chief Executive, commented.
“It is highly complementary to our core capabilities in defence and security, with a leading position in the attractive and growing submarine and surface sonar markets, strengthening and broadening the group’s existing capabilities in maritime systems.”
Subject to approvals, completion of the transaction is expected in the early part of 2020.
ELAC has a global client base, predominantly in Asia and Europe, with a growing focus in North and South America. Its clients include navies, shipyards, integrators and resellers, with naval markets accounting for 80-90% of revenues whilst 10-20% of revenues are generated from commercial and dual use markets.
ELAC has sonar products currently in operation on various submarines and surface ships, including for the Indonesian, Singaporean, Taiwanese, Dutch and Portuguese navies.