Yahoo Finance Nat Rothschild's Volex snaps up US defence supplier
Volex, the British manufacturer chaired by banking dynasty member Nat Rothschild, has bought an American rival that supplies critical components to the US military.
California-based Irvine Electronics provides subsystems such as circuit boards to aerospace and defence customers such as Boeing and Nasa.
Its products are used in technology such as missile defence systems, flight controls and thermal imaging devices.
The deal by Aim-listed Volex reverses the controversial trend of British businesses supplying components to the UK military being targeted by American buyers.
FTSE 250 firms Ultra Electronics, which provides sonar equipment to the Royal Navy and parts used in Britain’s Trident nuclear submarines, and Meggitt, which makes components used in military aircraft, are both acquisition targets by US-based firms.
Although Volex’s $16.4m (£12m) cash acquisition of Irvine is tiny in comparison to the £7bn Meggitt and £2.6bn Ultra deals, it highlights the worries about transatlantic defence deals even if they are between two of the world’s closest military allies.
MPs, military experts and unions have lined up to attack the Ultra and Meggitt sales, warning that they risk Britain’s national security, will hasten the hollowing out of the UK's industrial base and could result in job losses.
Some of the kit that Ultra supplies is so sensitive that the Business Secretary,
Kwarteng, has ordered an investigation into the impact of a sale on UK military interests. He also ordered the company not to share information with its suitor.
Mr Rothschild, the executive chairman of Volex, said buying Irvine would strengthen the company’s presence and technical capabilities in the key North American market.
“Our strategic intent is to develop Volex's presence in the defence and military aerospace markets, adding further blue-chip customers involved in long-term programmes and partnerships,” he said.
Irvine had annual sales of $27m and made a pre-tax profit of $9.6m.
Basingstoke-based Volex designs and manufactures electric connectors, cables and printed circuit boards to aerospace, automotive, consumer, defence and medical businesses with its products found in products running from jet aircraft to irons.
It has more than 6,000 staff worldwide in North America, China, Europe and Asia, and last made a $31m profit on sales of $443m.
