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(Bloomberg) — Advent is exploring a sale of its Ultra Maritime business for more than £3 billion, as demand surges for naval defense companies amid conflicts from Iran to Ukraine, according to people familiar with the matter.
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The buyout firm has been speaking to banks about a potential sale of the business, which could fetch upwards of £3 billion ($4 billion) based on projected earnings and peer valuations, said the people. The sale would likely kick off in the coming months and could attract interest from both strategic and private equity bidders, they said, asking not to be identified because discussions aren’t public.
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Advent bought air-to-air refueling company Cobham Plc in a £4 billion deal in 2020 and then went on to purchase British defense firm Ultra Electronics Holdings Plc. The Boston-based buyout firm has subsequently sold most of Cobham and Ultra, generating lucrative returns.
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It agreed in June to sell Ultra PCS, an England-based maker of ejection systems that help with dropping missiles, to aerospace firm Eaton Corp. for $1.55 billion.
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Ultra Maritime focuses on anti-submarine warfare in the air, surface and undersea domains, including detection with sonobuoys, sonar systems and torpedo countermeasures, according to its website. The company supplies navies in the US, Canada, UK and Australia.
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Deliberations on Ultra Maritime are preliminary, no decision has been made on a sale process and Advent could opt to hold on to the asset for longer, the people said. A representative for Advent declined to comment, while Ultra Maritime didn’t immediately respond to queries.
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A potential sale of the business comes as investors pile into defense assets after the European Union pledged hundreds of billions of euros to build up the region’s defense industry and reduce dependence on the US.
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The widening conflict in Iran has highlighted the particular importance of maritime defense, with the US saying recently that an American submarine sank a surfaced ship for the first time since World War II. There’s also been suspected underwater sabotage in the Baltic Sea amid Russia’s continuing conflict with Ukraine.
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