Cubic to sell Global Defense Services business for $135 million

By John Liang / April 19, 2018 at 4:58 PM

Cubic Corp. announced today it has agreed to sell its Cubic Global Defense Services business to Valiant Integrated Services for $135 million in cash.

The deal also includes "$3 million of contingent consideration tied to certain contract wins expected over the next 12 to 24 months," according to a Cubic statement.

"This transaction marks a significant milestone for Cubic, as we continue to sharpen our focus on delivering market-leading, innovative technologies that create superior value for our customers," Cubic CEO Brad Feldmann told investors in an April 19 conference call. "It enables the company to better concentrate its resources on markets with strong growth and high margins and further increases our financial flexibility to pursue profitable growth opportunities that enhance shareholder returns."

The product offerings of the non-original equipment manufacturer service business and the markets where they compete "no longer fit with our strategy," Feldmann said. "The scale required to compete profitably in the defense services industry has increased meaningfully, and technology is no longer a market differentiator."

The transaction "will allow our services business and its employees to be part of a growing platform that is specifically focused in the defense services market and is better positioned to compete in that consolidating industry," the Cubic CEO said. The deal is expected to be completed within 30 to 60 days.

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