Cobham Plc, the world’s largest maker of airborne refueling kit, said it’s seeking acquisitions in aviation services and communications to reduce its reliance on defense sales.
Prices in both fields are still attractive as the Wimborne, England-based company also looks to expand its in-house activities in those activities, Chief Executive Officer Bob Murphy said today in an interview. Although growing commercial aerospace is also of interest, prices in that segment are generally too high to warrant a transaction, he said.
Cobham generates about 70 percent of revenue from defense sales, the bulk of it from U.S. military spending. Murphy said he is looking to better balance the company in light of spending cuts from that country, without putting a specific figure on the share of sales to come from commercial markets.
“I like to buy businesses that already grow organically,” Murphy told reporters at the Paris Air Show. Cobham completed the acquisition of Axell Wireless, a communications specialist that made systems for the London 2012 Olympics, in May, adding to last year’s purchase of Thrane & Thrane, a satellite and radio communications company.
Aviation services, which includes specialist training of U.K. troops and flight operations supporting mining activities in Australia, could be expanded into other markets, Murphy said. The business accounted for 327 million pounds of Cobham’s 1.75 billion pounds of sales last year.
Cobham, the world largest provider of military aviation refueling equipment, should also see good growth in that market with positions on the Boeing Co. KC-46A tanker, the Airbus SAS A330-based refueler, and a new model, the KC-390, being developed by Brazil’s Embraer SA, Murphy said.
While Murphy would not rule out a U.S. acquisition in defense, he called it “unlikely.”