Advent initiates the break-up of British aerospace jewel Ultra Electronics
The private equity group Advent International has given the go-ahead to break up the cutting-edge British aerospace group Ultra Electronics.
The US group has sold Ultra’s pioneering forensics division to a Texas-based group called Leads Online.
Advent pounced on Ultra, a member of the FTSE 250 index, in June 2021 in a £2.6 billion deal.
But the takeover only came about last year after an in-depth investigation into what impact the sale to a US company would have on Britain’s national security.
Ultra was considered a strategically important company because its tasks included producing sonobuoys for hunting enemy submarines and technologies for F-35 fighter jets.
Flight Risk: Ultra’s work includes making sonobuoys for hunting enemy submarines and technology for F-35 fighter jets (pictured)
Advent had already come under fire for the rapid dissolution of another British defense company, Cobham, which it acquired for £4 billion in 2019.
Ultra’s ballistic forensics business was previously slated for sale by Advent because it was not considered a core part of the company.
Its world-class technology is used by police forces and criminal authorities in 80 countries to solve gun crime by analyzing bullets in detail and storing the information in databases. This allows users to link “cold cases” and link crimes committed with the same weapon. Leads Online, which provides data and intelligence tools for law enforcement agencies, did not disclose how much it paid for the forensics department.
The sale will fuel fears that Advent could further break up the company.
Despite pledging to be a “long-term investor”, Advent split up Cobham, which pioneered air-to-air refueling technology, within 18 months of the acquisition.
This is a typical business model for private equity firms, which is why many defense experts and lawmakers criticized the sale.
Lord West of Spithead, the former First Sea Lord, previously said the sale of Ultra to Advent could leave Britain at the mercy of Russia and the Chinese navy as submarine warfare becomes the next “major theater of war”.
Ultra’s history dates back to 1920, when the company began as a small electronics factory in West London.