Advent's £3.9bn Cobham take-private likely to go ahead

Following a three-week inquiry, the secretary of state for business, energy and industrial strategy, Andrea Leadsom, announced she is likely to wave through the deal, but that a public consultation will continue until 17 December 2019.

During the inquiry, Advent agreed to conditions, including giving notice of a whole or partial sale of Cobham, strengthening existing security arrangement for sensitive operations and information, and ensuring new board structures comply with national security requirements.

On 25 July 2019, Advent made a takeover offer of 165 pence per share in cash, which represents a 34% premium on the unaffected share price of the company. Advent secured the approval of 93% of shareholders.

Advent is currently investing from its Advent International GPE IX fund, which closed on $17.5bn in June 2019. The vehicle writes equity tickets of $100m-1bn for companies with enterprise values of between $50m-3.5bn.

The offer price values Cobham at forward multiples of 13.5x estimated EBITDA for 2019 and 12.3x estimated EBITDA for 2020.

At the time of publication, Cobham was trading at 159.95 pence per share, giving the company a market share of £3.82bn.

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