Israel’s Elbit Systems [ESLT] in December said its U.S. subsidiary Elbit America has agreed to acquire defense contractor Sparton Corp. for $380 million in a deal that expands the company’s work on naval systems.
Elbit is acquiring Florida-based Sparton from the private equity firm Cerberus Capital Management, which acquired Sparton in early 2019 and took the company private.
“The acquisition of Sparton will strengthen Elbit Systems of America’s capabilities and will enable expansion of activities in the naval arena,” Bezhalel Machlis, Elbit’s president and CEO, said in a statement.
Sparton makes complex electromechanical assemblies for its customers. Its products include sonobuoys and related maritime defense technologies, ruggedized displays and rugged computers. In 2017, Sparton had $375 million in sales.
Cerberus acquired Sparton after the Justice Department recommended against Britain’s Ultra Electronics Holdings planned acquisition of the naval contractor. The U.S. Navy was concerned that Ultra’s deal for Sparton would eliminate competition for sonobuoys.
Since acquiring Sparton, Cerberus divested the company’s contract manufacturing segment to focus on being a pure-play defense supplier.
Elbit said its acquisition requires approval by U.S. regulators and could take months to close.
Sparton’s financial advisers on the deal are Moelis & Company and Evercore.