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Cerberus to Acquire Sparton; Tarek Ajouz Quoted

Tarek Ajouz

New York-based private equity firm Cerberus Capital Management has agreed to pay $18.50 in cash for each outstanding share of Sparton’s (NYSE: SPA) common stock.

Sparton said Wednesday its board of directors cleared the transaction, which is expected to conclude in the first quarter of calendar year 2019.

Tarek Ajouz, a managing director at Cerberus, said Sparton’s experience as a producer of electromechanical devices for government agencies and companies worldwide as well as its customer relationships offer an opportunity to expand its market footprint.

Schaumburg, Ill.-based Sparton runs 13 manufacturing sites and engineering design facilities across the world and provides industrial design, field service, distribution and refurbishment services for electromechanical devices in support of clients in military and aerospace, medical and biotechnology and industrial markets.

Sparton said debt financing for the deal will come from accounts managed by MSD Partners and TCW Asset Management.

J.P. Morgan Securities served as Cerberus’ financial adviser in the transaction, while Blank Rome LLP, Lowenstein Sandler LLP and Kirkland & Ellis LLP served as the private equity firm’s legal counsel.

Raymond James & Associates and Wells Fargo Securities advised Sparton on the deal’s financial aspects while Mayer Brown LLP served as the company’s legal counsel.

The acquisition is subject to approval from Sparton stockholders, antitrust clearance and other customary closing conditions.

Sparton was supposed to merge with U.K.-based defense contractor Ultra Electronics, but both companies decided to call off the $234M deal due to antitrust concerns from the Department of Justice.

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