Stock Monitor: Methode Electronics Post Earnings Reporting
LONDON, UK / ACCESSWIRE / March 7, 2018 / Active-Investors.com has just released a free research report on Sparton Corp. (NYSE: SPA). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/'symbol=SPA as the Company's latest news hit the wire. On March 05, 2017, the Company announced that its previously announced merger agreement with UK's Ultra Electronics Holdings PLC has been terminated. Sparton had agreed to merge with Ultra in July 2017 in a deal valued at $234.8 million. The decision was taken jointly by both companies after the deal faced unfavorable review by from the US Department of Justice (DoJ) on antitrust concerns. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Active-Investors.com is currently working on the research report for Methode Electronics, Inc. (NYSE: MEI), which also belongs to the Technology sector as the Company Sparton. Do not miss out and become a member today for free to access this upcoming report at:
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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Sparton most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:
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Review by DoJ
Ultra is a UK-based defence contractor while Sparton is a US-based supplier to the US Navy and the Department of Defense. Ultra is also the Joint Venture partner of Sparton in a Company called ERAPSCO. ERAPSCO is a company that designs, develops, and manufactures sonobuoys and transducers and is a major supplier for the US Navy. After the announcement of the Sparton-Ultra deal in July 2017, it was reviewed by the DoJ for antitrust concerns. During the review process, the DoJ and the US Navy suggested that instead of Ultra and Sparton merging with each other, both companies should work independently to develop, produce, and sell sonobuoys for the US Navy. This would eliminate the need of the JV Company, ERAPSCO, in due time. The members of DoJ's staff informed both companies that they planned to recommend that the DoJ block the merger. Both companies feel that DoJ would agree to and act according to their staff's recommendation and ultimately the Sparton-Ultra deal would be blocked.
Due to the unfavorable stance taken by the DoJ and the US Navy, Sparton and Ultra decided that it would be prudent and in the best interests of both companies to terminate the merger agreement. Both companies are aware that the DoJ launch a separate investigation against their JV Company ERAPSCO. Sparton is confident that the US Navy would fund and support the Company to become an independent developer, manufacturer, and marketer of sonobuoys.
Impact of Termination
Following the termination of the merger, Sparton revealed that it will revisit its strategic plans for the Company and reconnect with those parties who had shown interest in acquiring the full or part of the Company and are willing to complete the process at the earliest. Sparton had decided to explore strategic alternatives for the Company in 2016 after which it had signed the merger deal with Ultra.
On the other hand, Ultra expressed their disappointment in the DoJ's unfavorable review resulting in the cancellation of the merger with Sparton. In the meanwhile, both companies plan to continue supplying sonobuoys to the US Navy via their JV Company ERAPSCO. Ultra has revealed that it plans to utilize the £134 million set aside for the acquisition of Sparton to increase shareholder value and implement share buybacks for the same value.
This decision is a major setback for Ultra as it reported a 10% fall in pre-tax profits and a 1.3% slowdown in revenues to £775 million for FY17. The Company is also struggling to find a replacement for Rakesh Sharma, its Chief Executive who quit in November 2017. Douglas Caster who has been at the helm since then acknowledged that: "2017 was a challenging year in the Group's core defence markets and, as previously reported, Ultra experienced delays to a number of programmes and contracts relatively late in the year."
About Sparton Corp.
Schaumburg, Illinois-based Sparton is in its 118th year of operation and is a supplier of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service, and refurbishment. The Company caters to customers in the Medical & Biotechnology, Military & Aerospace, and Industrial & Commercial sectors. It has 13+ design and production facilities and is supported by a global team of over 1,400 employees.
Stock Performance Snapshot
March 06, 2018 - At Tuesday's closing bell, Sparton's stock slightly rose 0.72%, ending the trading session at $16.76.
Volume traded for the day: 762.86 thousand shares, which was above the 3-month average volume of 81.55 thousand shares.
After yesterday's close, Sparton's market cap was at $163.07 million.
The stock is part of the Technology sector, categorized under the Diversified Electronics industry. This sector was up 0.5% at the end of the session.
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