The UK company, which gets 40pc of revenue from U.S. defence activities, has sought to advance its civil activities with acquisitions to lessen its reliance on military spending that’s being strained by government budget cuts.
Cobham, which anticipates one-time reorganization costs of £126m and £50m in annual savings, will sell 65 million ordinary shares to help fund the acquisition, representing about 6pc of its share capital.
While analysts questioned the complexity of Aeroflex as a company, they broadly welcomed the deal as positive for Cobham.
"Our snap reaction to the proposed acquisition of Aeroflex is that it is a quite complex business that may take us some time to understand," said Sandy Morris, equity analyst at Jeffries, who maintained a 'Buy' rating on the British company.
"Nonetheless, it also appears to be a decisive step forward in implementing Cobham’s strategy, something we welcome. If Cobham can achieve the synergies identified and if – like Cobham – Aeroflex returns to organic growth in FY15, the outlook for the enlarged Group will be positive, in our view."
Shares in Cobham slipped 2pc in Tuesday morning trading following the announcement of the acquisition.
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