Cohort plc, the AIM-listed defense technology group, has acquired a majority stake in Chess Technologies Ltd (“Chess”), a UK-based world leader in integrated fire control and tracking systems for military vehicles and naval ships, for total consideration of up to $53m.
Livingstone’s Defence & Security sector team advised the shareholders of Chess, including management and private equity investor Beringea LLP, on the sale.
Founded in 1993, Chess is a world leader in advanced integrated systems and technologies for detecting, tracking, classifying and disrupting a wide range of naval, land and air threats. The company provides a unique suite of innovative surveillance and fire control system capabilities that are fundamental to critical defense programmes and critical civil infrastructure projects.
A notable example of Chess’s capabilities is its military counter-UAV system, AUDS, that provides an effective defense against this growing threat. Headquartered in Horsham, with additional facilities in Plymouth and Wokingham, Chess also has a US office in Denver, Colorado. The business employs over 140 people. Chess’s well-regarded management team will remain in place following the transaction, led by its founder and CEO Graham Beall.
Andrew Thomis, Chief Executive Officer of Cohort, commented: “The acquisition of Chess represents a significant expansion for Cohort, adding a profitable and growing fifth standalone business to our portfolio. It is highly complementary to our core capabilities in defense and security, underpinned by long-term contracts with quality global customers and a strong order pipeline, including on long-term programs. We are looking forward to working with the Chess team to realize the exciting growth opportunities that this transaction will create.”
Cohort (AIM: CHRT) was admitted to London’s Alternative Investment Market in March 2006. It has its headquarters in Reading, Berkshire and employs in total around 950 core staff there and at its other operating company sites across the UK and in Portugal.
Chess will become Cohort’s fifth standalone subsidiary and shares complementary customers with new sister companies SEA, EID and MCL. The acquisition also represents Cohort’s first foothold in US defense and provides opportunities to leverage complementary expertise and capabilities.
Graham Carberry, Partner at Livingstone, concluded: “Chess is a truly world-class defense electronics group with a unique capability set that has positioned the company for sustained growth over the coming years as its clients seek to address a multitude of next-generation threats, of which drone attacks are just one.”
In the year ended 30 April 2018, Chess generated revenues of $23m and EBIT of $3m and an order book of $39.4m. Customers included BAE Systems, QinetiQ, Thales, Lockheed Martin and the UK MOD.