$234.8m offer for Sparton Corporation

The previously indicated interest in Sparton has now been formalised with a $23.5 per share cash offer valuing the NYSE-listed company at $234.8m (£180.6m). This is a 28% premium to the value at the close on 30 June ahead of the previous announcement. The offer appears financially compelling and will be funded through a share placing representing c 9.99% of Ultra’s existing capital raising £133m net with the balance from existing debt facilities. As the deal is immediately EPS-enhancing following completion in early 2018 and should create value in 2019, notwithstanding the proposed disposal of MDS, it appears a logical and focused expansion of Ultra’s core business.