SCHAUMBURG, IL -- After a near-miss last year, Sparton has found a suitor.

The ODM/EMS today announced a definitive agreement to be acquired by an affiliate of Cerberus Capital Management, the $35 billion private equity firm. Cerberus will pay $18.50 per share in cash for all outstanding shares of Sparton’s common stock, putting the purchase price at $181.86 million.

The transaction is subject to Sparton shareholder approval, antitrust clearance and other customary closing conditions, and is expected to close in the first quarter 2019.

The offer represents a premium of approximately 41% over Sparton’s closing share price on Dec. 11, and 6.4 times Sparton's annual EBIDTA as of Jun. 30. Sparton's board has unanimously approved the agreement and recommends company’s shareholders approve the transaction.

“This transaction is the result of the significant time and effort the company has invested in its previously announced process to explore strategic alternatives, including a potential acquisition of Sparton,” said Joseph J. Hartnett, interim president and chief executive, Sparton. “We are pleased to have successfully concluded our process with a transaction that delivers significant value to the shareholders of Sparton.

“In addition to delivering immediate value to our shareholders, this transaction provides Sparton with a long-term partner that is focused on building upon our strong platform. Cerberus is recognized as a leading investor in global technology and manufacturing companies that brings significant operational expertise, in addition to its financial capital and acumen. Together, we will be able to capitalize on strategic growth opportunities, while continuing to meet the needs of our customers by delivering high-quality, innovative solutions and services.”

Tarek Ajouz, managing director of Cerberus, said, “Sparton has a proven track record as a leading manufacturer of complex electromechanical devices for leading businesses and government agencies around the world. With its industry-leading solutions and strong customer relationships, we believe there is significant opportunity to further expand the Company’s leadership position in its markets. We look forward to partnering with Sparton’s talented employees to serve its customers with best-in-class solutions, build upon the foundation of excellent capabilities already in place, and help Sparton achieve its full potential for growth.”

Last year Sparton had reached an agreement to be acquired by Ultra Electronics, with whom it operates a joint venture building sonobuoys. In March, however, the US Navy, a major customer, recommended the US Department of Justice move to block the deal, ending the acquisition attempt.

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