Carlyle eyes British military equipment maker Chemring
18 Aug 2012
British military equipment maker Chemring Group Plc yesterday said that it had received "a highly preliminary expression of interest" from US-based private equity firm Carlyle Group.
The announcement comes after Chemring's stock surged 32 per cent amid takeover speculation, valuing the Hampshire, UK-based company at £810.7 million ($1.28 billion).
Washington D C-based Carlyle, the world's biggest PE firm by assets, has until 14 September to either make a firm bid or pull out, as per the UK takeover panel code, while Chemring has not commented on the preliminary approach.
Chemring, which manufactures and sells energetic material products and countermeasures for the defence, security and safety markets, was recently speculated to be a prime takeover target after it posted a 50 per cent decline in pretax profit for the six months to 30 April.
Chemring, like others in the industry, is currently coping with the US and other European nations cutting back on defence spending in order to repair their budget deficits.
Chemring, which was founded more than 100 years ago, makes missile–avoidance equipment used in the new European Joint Strike Fighter, flares used to detect improvised explosive devices and the mechanisms used in ejection seats.
Founded in 1905 as the British Foreign & Colonial Automatic Light Controlling Company, Chemring started by making timers for gas street lighting.
It has since grown through a series of strategic acquisitions and is now one of the world's leading producers of countermeasures for protecting air, sea and land-based platforms from threats.
