Cobham - Going, Going, Gone
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Cobham - Going, Going, Gone
COBHAM GETS TAKEOVER OFFER, STARTS STRATEGIC REVIEW OF AUSTRALIAN BUSINESS
written by Chris MilneJuly 25, 2019
A 2019 supplied image of an Embraer E190 in Cobham livery. (Cobham Aviation Services)Cobham Aviation Services Australia faces new ownership with global private equity company Advent International lobbing a takeover bid for British parent Cobham Plc.
The takeover offer from Advent of 165 UK pence per Cobham Plc share valued the target at about 4 billion UK pounds.
It was announced on Thursday morning (UK time), alongside the company’s financial results for the first half of calendar 2019.
Cobham Plc’s board of directors recommended shareholders to vote in favour of the deal, noting the offer price represented an “attractive premium” on the share price of 123 UK pence on 24 July 2019, prior to the takeover being made public.
“The Cobham directors believe that the acquisition recognises the quality of Cobham’s businesses and its prospects,” the company said in a regulatory filing.
“The acquisition represents an opportunity for shareholders to realise their investment in Cobham in cash in the near term.
“As a leading global private equity firm, Advent provides an experienced partner for Cobham’s customers, employees and other stakeholders.”
Advent International Plc managing director Shonnel Malani said: “We strongly believe in the importance and potential of Cobham’s businesses and look forward to bringing our long track record of successful stewardship of companies to ensure that Cobham flourishes under our ownership.”
Cobham said it would undertake a “strategic review” of the Australian operations of its Aviation Services business.
This process, of which Advent was aware, would enable the company to decide “how best to optimise the value” of the Australian arm, Cobham Plc chief executive David Lockwood said.
Advent supported the review, he added.
Cobham plc said its Aviation Services business in Australia generated revenues of A$386 million in calendar 2018, with “organic revenue growth of 10 per cent in the first half of 2019”.
The company’s Australian operations include the Coastwatch contract, worth more than $1 billion over 15 years; the QantasLink Boeing 717 contract, involving 20 aircraft and contracted to 2026 under a $1.2 billion contract; the Australian Maritime Safety Authority’s search and rescue contract, worth $640 million and involving four Bombardier CL-604 jets; and several fly-in/ fly-out (FIFO) contracts with mining groups.
Cobham operates four specially-modified Challenger 604s under its AMSA search and rescue contract. (Cobham)Cobham Australia chief executive Ryan Both told staff on Thursday afternoon the local operation was facing “an exciting new time”.
Both said the recent arrival of an Embraer 190 for work on Chevron’s North West Shelf petroleum operation and the impending arrival of the first Dash 8 Q400 for FIFO work would help to transform the business.
However, he added, the Australian arm would need more capital to drive growth “and realise our full potential”.
Cobham Plc reported net profit after tax of 47.9 million UK pounds for the six months to June 30 2019, down from 166.7 million UK pounds in the prior corresponding period.
Revenue rose 11 per cent to 1.03 billion UK pounds.
Cue the private equity firm to slash as much as possible, make the company appear to be more profitable than it was when they bought it, then sell it again in about 2 years time.
Look what happened when a private equity firm took over Dick Smith Electronics
Cobham Aviation up for sale
DAMON KITNEY
Cobham Aviation chief executive Ryan Both at Essendon Fields Airport. Picture: Stuart McEvoy- 12:00AM JULY 26, 2019
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Cobham, which turns over almost $400 million annually and is one of the nation’s biggest aviation groups, is the largest provider of contract aviation services in Australia and flies Boeing 717 aircraft for QantasLink.
It also operates search and rescue aircraft for the Australian Maritime Safety Authority (AMSA) and patrols the nation’s coastline for the Australian Border Force.
Delivering the Cobham interim results yesterday, chief executive David Lockwood announced it had started a strategic review of Cobham Australia, *noting it would decide the best way to *optimise value in the interests of the company and its stakeholders.
He said Advent International was “aware and supportive” of the review of the Australian business.
Last year Cobham restructured its Cobham Aviation Services unit into two regional businesses, one focused on Australia and the other on Britain, Europe, the Middle East and Africa.
As a result, 37-year-old Ryan Both, a former Virgin Australia and Melbourne Airport executive, took over as chief executive of the Australian group from Peter Nottage, who had been in the top job with Cobham Australia since 2006.
Mr Both has since pushed to introduce types of aircraft better suited to the demands of FIFO customers, as the industry rides a recovery in the resource sector, including the Q400, the 70-seat Bombardier and the 98-seat Embraer E190.
“We are about to enter an exciting new phase with the arrival of our first Q400 next week, which brings a game-changing, modern, in-production aircraft to the FIFO sector,” Mr Both said yesterday.
“As a progressive and innovative organisation, it’s not surprising that we are taking stock and reviewing where we’re at.
“Modern aircraft, like the Q400 and the recently introduced Embraer 190, are expensive. They are transforming our business but we need more capital to drive our growth so we can realise our full potential.”
He said the potential of *Cob*ham was largely an “untold story”.
“We have 1300 people, operate more than 50 aircraft, blue-chip customers and a national footprint,” Mr Both said. “Cobham Plc has high expectations for our business and remains committed to the success of CAvS (Cobham Aviation Services Australia) in Australia during this process.”
Another "game-changer"! Must be looking for more QF work.
Which is why the opposition doesn't use them.
Something the opposition doesn't have to worry about.
Modern aircraft, like the Q400 and the recently introduced Embraer 190, are expensive
They are transforming our business but we need more capital to drive our growth so we can realise our full potential
One thing appears certain and that is my friends who work there will be rid of that particular management team. I just hope they aren’t thrown a contract that they end up signing under desperate circumstances.
https://www.bloomberg.com/news/artic...5-billion-deal
Opposed by their largest shareholder.
This is not a done deal yet.
Opposed by their largest shareholder.
This is not a done deal yet.
Agreed topend, I think it is mostly posturing to get a better deal. The regulatory issues also have to be overcome.
Anyone remember this...https://www.theguardian.com/business...rlineindustry1
Anyone remember this...https://www.theguardian.com/business...rlineindustry1
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How does this all play out for the current pilots working there? Will there be job losses, will they still carry on with their current hiring requirements etc? A mate of mine has a 717 interview/sim session coming up in September/October (dates not confirmed yet), will they still look at bringing these guys on board?
Crikey Daddy, you don’t want much!
the paper runs a story on what MIGHT happen and you want detailed plans on what they will do with pilots!
I don’t mean to be cruel but how is anyone, the least of all being the management of Cobham Australia, going to know the answer to that!
it will depend on who, if anyone, buys the business, what their strategic plan is, assuming they have one (and in aviation that is a pretty big assumption) and then however long it takes to implement said mythical plan.
this sort of stuff can take years to play out, and it goes without saying there are union negations to be had and all manner of consultations, so if anyone tells you what is happening, they are bull****ting you.
the paper runs a story on what MIGHT happen and you want detailed plans on what they will do with pilots!
I don’t mean to be cruel but how is anyone, the least of all being the management of Cobham Australia, going to know the answer to that!
it will depend on who, if anyone, buys the business, what their strategic plan is, assuming they have one (and in aviation that is a pretty big assumption) and then however long it takes to implement said mythical plan.
this sort of stuff can take years to play out, and it goes without saying there are union negations to be had and all manner of consultations, so if anyone tells you what is happening, they are bull****ting you.
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Cobham future
Crikey Daddy, you don’t want much!
the paper runs a story on what MIGHT happen and you want detailed plans on what they will do with pilots!
I don’t mean to be cruel but how is anyone, the least of all being the management of Cobham Australia, going to know the answer to that!
it will depend on who, if anyone, buys the business, what their strategic plan is, assuming they have one (and in aviation that is a pretty big assumption) and then however long it takes to implement said mythical plan.
this sort of stuff can take years to play out, and it goes without saying there are union negations to be had and all manner of consultations, so if anyone tells you what is happening, they are bull****ting you.
the paper runs a story on what MIGHT happen and you want detailed plans on what they will do with pilots!
I don’t mean to be cruel but how is anyone, the least of all being the management of Cobham Australia, going to know the answer to that!
it will depend on who, if anyone, buys the business, what their strategic plan is, assuming they have one (and in aviation that is a pretty big assumption) and then however long it takes to implement said mythical plan.
this sort of stuff can take years to play out, and it goes without saying there are union negations to be had and all manner of consultations, so if anyone tells you what is happening, they are bull****ting you.
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I highly doubt the Australian Government would allow it!. According to an article by FlightGlobal the Surveillance Contract might be retained by the new owners of Cobham plc should they sell off Regional and Airline services.