It must be something in the spring air, because for the third year in a row Cobham (COB) is spending big in May. After paying £85m for Axell Wireless last year and £275m for Denmark's Thrane & Thrane (T&T) in 2012, the defence contractor is splashing out $1.5bn (£869m) - over a third of which is debt - on New York-based wireless communications expert Aeroflex. Funded by loans and a £180m placing at 300p per share, it's not cheap, but the deal makes sense.
Like T&T and Axell, Aeroflex does much of its work in higher growth commercial markets, which, following the deal, will account for 41 per cent of Cobham's sales. Annual cost-savings could be as much as £50m within three years, and Aeroflex will significantly boost earnings in 2015, says management.
