SAN DIEGO, April 19, 2018 /PRNewswire/ -- Cubic
Corporation (NYSE: CUB) today announced that it has entered
into a definitive agreement to sell its Cubic Global Defense (CGD)
Services business to Valiant Integrated Services for $135 million cash at close on a debt free, cash
free basis, plus $3 million of
contingent consideration tied to certain contract wins expected
over the next 12 to 24 months.
"Cubic is focused on maximizing long-term value for our
shareholders by delivering superior value to our customers," said
Bradley H. Feldmann, chairman,
president and chief executive officer of Cubic Corporation. "We
regularly evaluate our portfolio to ensure we are devoting our
resources to strategic markets where domain expertise, innovation
and technical competency enable us to build market-leading
positions with strong growth potential and higher margins. The sale
proceeds will provide us with increased financial flexibility to
pursue profitable growth opportunities in those markets."
"We also believe current market dynamics are driving
consolidation in the defense services industry, and the scale
required to compete has increased meaningfully. This transaction
will allow our Services business and its employees to be part of a
more appropriately focused platform that will be better positioned
to grow," added Feldmann.
On March 31, 2018, the assets and
liabilities of CGD Services will be considered held for sale and
will be held at the lower of their carrying value or their fair
value less estimated cost to sell. In Cubic's fiscal second quarter
results, the CGD Services business will be reflected as
discontinued operations and the previous period financial results
will be reclassified for comparative purposes. Cubic expects to
record a non-cash charge of approximately $7
million within discontinued operations in the second
quarter, based on the estimated excess of the carrying value of CGD
Services over the consideration to be received. Upon the close of
sale, the non-cash charge will be adjusted based upon a final
analysis of the carrying amount of the assets and liabilities at
the date of the sale, including the assessment of deferred tax
assets and liabilities of discontinued operations.
The transaction is anticipated to be completed within 30 to 60
days, subject to customary closing conditions and regulatory
approvals.
CGD Services is a non-Original Equipment Manufacturer (OEM)
providing training, operations, intelligence, maintenance,
technical and other support services to the U.S. government, its
agencies and allied nations. CGD Services business had fiscal year
2017 revenue of $378 million and is
comprised of approximately 3,500 employees working in 10 countries
throughout the world. The employees serve with customers in
training and operational environments to help prepare and support
forces through the provision of comprehensive training, exercises,
staff augmentation, education, operational, intelligence, technical
and logistical assistance to meet the full scope of their assigned
missions.
Conference Call and Investor Information
Cubic executives will host a conference call at 11:30 a.m. Eastern Time on Thursday, April 19 to
discuss the transaction. The call can be accessed by dialing:
- 877-407-9708 (Domestic)
- 201-689-8259 (International)
A live audio broadcast of the conference call along with a
supplemental presentation will be available on the 'Events and
Presentations' section of Cubic's Investor Relations website
(https://www.cubic.com/investor-relations/events-and-presentations
).
Raymond James & Associates,
Inc. served as the exclusive investment banking advisor to Cubic in
connection with the transaction. Holland & Knight, LLP served as legal
counsel.
About Cubic Corporation
Cubic is a market-leading, technology provider of integrated
solutions that increase situational understanding for
transportation, C4ISR and training customers worldwide to decrease
urban congestion and improve the militaries' effectiveness and
operational readiness. Cubic Transportation Systems is a leading
integrator of payment and information technology and services to
create intelligent travel solutions for transportation authorities
and operators. Cubic Mission Solutions provides networked Command,
Control, Communications, Computers, Intelligence, Surveillance
and Reconnaissance (C4ISR) capabilities for defense, intelligence,
security and commercial missions. Cubic Global Defense is a leading
provider of live, virtual, constructive and game-based (LVC-G)
training solutions for the U.S. and allied forces. For more
information about Cubic, please visit the company's website at
www.cubic.com or on Twitter @CubicCorp.
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SOURCE Cubic Corporation