NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

16 August 2021

RECOMMENDED CASH ACQUISITION

of

Ultra Electronics Holdings plc

by

Cobham Ultra Acquisitions Limited

(a wholly-owned indirect subsidiary of Cobham Group Holdings Limited)

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1          Introduction

The boards of directors of Ultra Electronics Holdings plc ("Ultra") and Cobham Ultra Acquisitions Limited ("Cobham"), a wholly-owned indirect subsidiary of Cobham Group Holdings Limited ("Cobham Group Holdings"), are pleased to announce that they have reached agreement on the terms and conditions of a recommended all cash acquisition of the entire issued, and to be issued, ordinary share capital of Ultra.  It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

2          The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and the full terms and conditions to be set out in the Scheme Document, each Ultra Shareholder will be entitled to receive:

for each Ultra Share:            £35.00 in cash

In addition, Ultra Shareholders will be entitled to receive, without any consequential reduction in the Consideration, the interim cash dividend of 16.2 pence per Ultra Share announced by Ultra on 19 July 2021, which is due to be paid by Ultra on 17 September 2021 to those Ultra Shareholders who appear on the register of members of Ultra as at 27 August 2021 (the "Interim Dividend").

The price of £35.00 per Ultra Share, together with the Interim Dividend, values Ultra's entire issued, and to be issued, ordinary share capital at approximately £2.57 billion on a fully diluted basis, and represents a premium of approximately:

·    63.1 per cent. to the Closing Price of £21.56 per Ultra Share on 24 June 2021 (being the last business day before the commencement of the Offer Period);

·    68.8 per cent. to the volume-weighted average Closing Price of £20.83 per Ultra Share for the three-month period ended 24 June 2021 (being the last business day before the commencement of the Offer Period);

·    72.3 per cent. to the volume-weighted average Closing Price of £20.41 per Ultra Share for the six-month period ended 24 June 2021 (being the last business day before the commencement of the Offer Period); and

·    41.2 per cent. to the all-time highest Closing Price prior to the commencement of the Offer Period of £24.90 per Ultra Share.

3          DIVIDENDS

Under the terms of the Acquisition, Cobham has agreed that Ultra Shareholders will be entitled to receive the Interim Dividend without any consequential reduction in the Consideration payable by Cobham in respect of each Ultra Share under the Acquisition.

Other than the Interim Dividend, if any dividend, distribution or other return of value is announced, declared, made or paid by Ultra in respect of Ultra Shares on or after the date of this Announcement and before the Effective Date, Cobham reserves the right to reduce the Consideration payable in respect of each Ultra Share under the Acquisition by the amount of all or part of any such dividend, distribution or return of value.  In such circumstances, Ultra Shareholders would be entitled to retain any such dividend, distribution or other return of value.

4          Background to and reasons for the Acquisition

The Cobham Group is a leading global technology innovator providing solutions to the most challenging problems, primarily in aerospace, defence and space, to the US, UK and other key allies.

Within its portfolio, Cobham has been investing significantly to scale and develop its defence electronics business.  It has also considered opportunities to acquire other innovative defence electronics businesses with highly differentiated mission critical solutions which serve adjacent end markets.

In this context, Cobham believes that an acquisition of Ultra is very much aligned with its strategy.  Cobham and Ultra both have a history as innovators and share advanced complementary capabilities, delivering mission critical solutions to the US, UK and other key allies.  Much like Cobham, Ultra's technically differentiated solutions have enabled its development of leading capabilities in its chosen markets.

Cobham considers that customers will benefit significantly from the combination, driven by the complementary design, engineering and manufacturing capabilities of the two groups.  This will enable the delivery of more integrated and higher performance solutions to their mutual customers and wider stakeholders.

The defence industry, in which both Cobham and Ultra operate, is a highly competitive landscape with multiple scale competitors.  Continuing to maintain and win new strategic platform and programme positions over the long-term requires both highly targeted continued investment in next generation technologies and differentiated capabilities, but also deep customer intimacy and reach to allow for prioritised and timely investment.  Cobham believes that there is also an increasing emphasis on the benefits of greater levels of integrated solutions being provided by the smaller, more specialist industry participants such as Cobham and Ultra. 

Cobham and Ultra already serve a number of the same customers in the US, the UK, and across the wider "five-eyes" alliance and indeed provide systems and solutions to a number of the same platforms, such as the F-35 Joint Strike Fighter, the F-15, the F-22, the F-16 and the P-8.  As a result, Cobham sees strong industrial logic for a combination with Ultra and considers that the enlarged Cobham Group would allow for synergies from enhanced customer intimacy and capability offering.  This would in turn lead to accelerated revenue growth in both businesses, expansion on current shared platforms and programmes and wins on combined enhanced positions on platforms and programmes of the future.

5          ULTRA Recommendation

The Ultra Directors, who have been so advised by J.P. Morgan Cazenove and Numis as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable.  In providing their advice, J.P. Morgan Cazenove and Numis have taken into account the commercial assessments of the Ultra Directors.  Numis is providing independent financial advice to the Ultra Directors for the purposes of Rule 3 of the Code.

Accordingly, the Ultra Directors intend to recommend unanimously that Ultra Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, as the Ultra Directors who hold Ultra Shares have irrevocably undertaken to do in respect of their own beneficial holdings which are under their control, totaling, in aggregate, 54,561 Ultra Shares representing approximately 0.08 per cent. of the issued ordinary share capital of Ultra on 13 August 2021 (being the latest practicable date before the date of this Announcement).  Further details of these undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to the Announcement. 

6          Background to and reasons for the recommendation

Ultra Group launched its ONE Ultra strategy in January 2020 and its Focus; Fix; Grow transformation plan to:

·    Focus on the Ultra Group's core strengths in the Maritime, Intelligence & Communications and Critical Detection & Control markets through executing a clear strategy;

·    Fix and standardise core processes around: Operating Model, Site Excellence, Operational and Functional Excellence, Procurement, Technology Enablement and creating a ONE Ultra culture; and

·    Grow value, accelerate growth and deliver exceptional outcomes for all Ultra's stakeholders.

The Focus; Fix; Grow transformation is proceeding well and ahead of expectations, with many workstreams now well into their execution phase.  As the transformation has matured, the Ultra Board is increasingly certain of its ability to deliver major benefits to Ultra stakeholders.  The transformation is expected to enhance operating performance and efficiency, improve programme execution and delivery and optimise costs.  This will provide additional resources to build on and further strengthen Ultra's strong technology base.  In addition, through improving engineering efficiency, Ultra can increase capacity; while investing more in facilities, systems, branding and training improves Ultra's ability to attract, develop and retain talented people.  The Ultra Board expects this, together with an enhanced strategic sales capability, will drive further sustainable growth and value creation.  

Ultra's results for the six-month period ended 2 July 2021 show the continued progress which is being made, with 14.3 per cent. organic order book growth, 25.4 per cent. organic underlying operating profit growth, return on invested capital of 21.3 per cent. and a strong balance sheet with only 0.65x net debt to EBITDA and 0.19x on a covenant basis, which excludes pension liabilities and lease liabilities.

The Ultra Group's strong financial performance is evidence of the benefits of Ultra's strategic re-positioning as an agile player in long-term growth markets.  The Ultra Group has a robust business model with excellent order visibility, high returns on invested capital and strong cash generation.  This, combined with a strong technology base focused on addressing customers' future needs and the enhanced potential from the Focus; Fix; Grow transformation plan, is driving expansion in Ultra's £12 billion sales pipeline and further growth in its order book which, at £1.3 billion, is currently at a record level.

As a result, the Ultra Board is very confident of Ultra's future prospects as an independent listed company and its ability to deliver excellent and sustainable value for all stakeholders.

The Ultra Board did not therefore solicit an offer from Cobham or indeed any third party.  It immediately rejected Cobham's unsolicited approach at £28.00 per Ultra Share and, whilst being cognisant of its fiduciary duties to all stakeholders, rejected a number of subsequent proposals.  However, at a price of £35.00 per Ultra Share plus the Interim Dividend of 16.2 pence per Ultra Share in cash, the Ultra Board noted the significant premium Cobham's offer represented to the undisturbed share price and to the all-time highest Closing Price per Ultra Share prior to the commencement of the Offer Period.

The Ultra Board, having reviewed in detail the Ultra Group's strategic plans and financial projections, as well as comparative trading and transaction multiples, also recognised that an offer at this level would allow Ultra's Shareholders to realise Ultra's likely future value today, without corresponding execution risk.  The Ultra Board therefore engaged in more detailed discussions with Cobham, which has committed to appropriate safeguards for the interests of Ultra's broader stakeholders.

In particular, the Ultra Directors note that:

·    the combination of Cobham and Ultra will create a defence electronics business of greater scale and bring together two businesses with complementary technology, design, engineering and manufacturing capabilities.  Both Cobham and Ultra believe this will enable the delivery of a broader range of integrated, cost competitive and high performance solutions across a wider range of platforms, benefitting mutual customers and wider stakeholders;

·    the Acquisition represents an opportunity for Ultra Shareholders to realise their investment in Ultra in cash in the near term;

·    the Acquisition represents a premium of approximately:

o 63.1 per cent. to the Closing Price of £21.56 per Ultra Share on 24 June 2021 (being the last business day before the commencement of the Offer Period);

o 68.8 per cent. to the volume-weighted average Closing Price of £20.83 per Ultra Share for the three-month period ended 24 June 2021 (being the last business day before the commencement of the Offer Period);

o 72.3 per cent. to the volume-weighted average Closing Price of £20.41 per Ultra Share for the six-month period ended 24 June 2021 (being the last business day before the commencement of the Offer Period); and

o 41.2 per cent. to the all-time highest Closing Price prior to the commencement of the Offer Period of £24.90 per Ultra Share;

·    the terms of the Acquisition imply an IFRS enterprise value multiple of approximately 17.7x 2020 EBITDA for Ultra; and

·    the willingness and intentions of Cobham to offer safeguards for stakeholder interests, including employees, customers, pension schemes, national security stakeholders and others following the Acquisition.  These safeguards include:

o Cobham's agreement in the Cooperation Agreement to offer HM Government a number of legally binding commitments, across the range of matters and areas further detailed in paragraph 10 (Binding commitments to HM Government) below, which recognise the importance of Ultra's contribution to the UK economy and national security and which, under HM Government's custodianship, would serve to safeguard and enhance these stakeholder interests following the Acquisition;

o the agreement of Cobham for the Ultra Board, as appropriate and necessary, to be involved and to support Cobham in the finalisation of the detailed terms, duration, nature and form of these commitments to HM Government; 

o Cobham's intention, as stated in paragraph 11 (Intentions regarding business, management, employees, pension schemes, research and development and locations) below, to fully support and accelerate global investment in its Focus; Fix; Grow transformation programme, as well as the proposed legally binding commitments on investment in research and development and the protection and creation of jobs and the stated intention not to change the location or functions of  the main sites of Ultra's operating business units;

o Cobham's intention, as stated in paragraph 11 (Intentions regarding business, management, employees, pension schemes, research and development and locations) below, to fully safeguard the existing contractual and statutory rights and terms and conditions of employment, including pension obligations, of the management and employees of Ultra and its subsidiaries in accordance with applicable law; and

o the Memorandum of Understanding agreed between Cobham and the trustee of the Ultra UK DB Pension Scheme with respect to the future funding of that pension scheme on which further background is given in paragraph 11 (Intentions regarding business, management, employees, pension schemes, research and development and locations) below.

Accordingly, following careful consideration of the above factors and their fiduciary duties, the Ultra Directors intend to unanimously recommend the Acquisition to Ultra Shareholders.

7          IRREVOCABLE UNDERTAKINGS

As described above, each of the Ultra Directors who holds Ultra Shares has irrevocably undertaken to vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed to implement the Scheme at the General Meeting in respect of their own beneficial holdings which are under their control, totaling, in aggregate, 54,561 Ultra Shares representing approximately 0.08 per cent. of the issued ordinary share capital of Ultra on 13 August 2021 (being the latest practicable date before the date of this Announcement).

The undertakings from the Ultra Directors will cease to be binding only if: (i) the Panel consents to Cobham not proceeding with the Acquisition; (ii) the Scheme Document is not dispatched to Ultra Shareholders within 28 days (or such longer period as may be agreed between Ultra and the Panel) of this Announcement; (iii) the Scheme lapses or is withdrawn in accordance with its terms, or the Scheme does not become effective on or before the Longstop Date (other than in circumstances where Cobham has, prior to such date, elected (in accordance with the Cooperation Agreement) to exercise its right to proceed by way of an Offer and announced the same in accordance with the requirements of paragraph 8 of Appendix 7 to the Code, and such Offer has not lapsed or been withdrawn); (iv) any competing offer for the entire issued and to be issued share capital of Ultra becomes or is declared wholly unconditional or, if proceeding by way of scheme of arrangement, becomes effective; (v) Cobham announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised, or replacement Scheme or Offer is announced by Cobham in accordance with Rule 2.7 of the Code at the same time; or (vi) the Scheme lapses or is withdrawn in accordance with its terms and Cobham publicly confirms that it does not intend to proceed with the Acquisition or to implement the Acquisition by way of an Offer.

Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this Announcement.

8          Information relating to Cobham and Advent

Cobham

The business of the Cobham Group was founded in 1934 and today employs over 6,000 people worldwide with its headquarters in the UK, and with operating locations in the US, continental Europe and in Australia, as well as other international satellite locations and sales offices.  The Cobham Group is a leading global technology and services innovator offering a suite of products, systems and engineering services that continue to enable innovative and cutting-edge solutions in space, avionics and electronics, in both commercial and defence markets.  It has specialist capabilities and know-how in: wireless, audio, video and data communications, including satellite communications, defence electronics, avionics and space exploration, microwave components and systems, rotating sub-systems and slip rings, and specialist aviation services. 

Cobham is a newly incorporated limited company registered in England and Wales and a wholly-owned indirect subsidiary of Cobham Group Holdings.  Further details in relation to Cobham will be contained in the Scheme Document.

The Cobham Group operates across the following business units, each with differentiated capabilities and many leading market positions:

·    Communications and Connectivity (including Aerospace Communications, Electrical and Electronic Equipment, and SATCOM) - provides critical and innovative technology to enable resilient communications in complex, harsh, hazardous and regulated environments, in air and space, on land and at sea;

·    Cobham AES - provides advanced electronic solutions with technology that pioneers the future and underpins many of the world's most critical missions across defence, aviation and space.  Cobham AES makes the impossible possible with customised solutions for the entire signal chain, from aperture to digital conversion; and

·    Aviation Services Australia - delivers aviation services for military and civil customers across all states and territories of Australia, including aerial border surveillance, search-and-rescue operations, and closed charter (fly-in, fly-out) passenger and freight services.

Advent and its affiliates have indirectly controlled the Cobham Group since January 2020. 

Advent

Founded in 1984, Advent is one of the largest and most experienced global private equity investors.  The firm has invested in over 375 private equity transactions in 43 countries and as of 31 March 2021 it had more than US$74 billion in assets under management.  With offices on four continents, Advent has established a globally integrated team of over 245 investment professionals across North America, Europe, Latin America and Asia.  The firm focuses on investments in five core sectors, including business and financial services, healthcare, industrial, retail, consumer, leisure and technology.  After more than 35 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.

Advent has a strong track record of investing in high quality industrial and engineering companies.  Its extensive global footprint and operational improvements experience make it a strong owner with the capability to drive continued improvement and growth of the businesses.  In addition, Advent has assembled a team of external operating partners, operations advisors and former senior executives with deep sector and functional expertise who complement Advent's investment experience.

9          Information relating to Ultra

Ultra was formed in 1993 to acquire the Electronic Systems division of Dowty Group plc and was listed on the London Stock Exchange in 1996.  Since then, Ultra has grown both organically and through over fifty acquisitions.  For the financial year ended 31 December 2020, revenue for the Ultra Group was £860 million, of which 64 per cent. was generated from sales to North America and 18 per cent. was generated from sales to the UK.

Ultra has a small headquarters in London and three strategic business units operating primarily in the US, UK, Canada and Australia.  Ultra employs over 4,600 talented people across the globe, with the largest number based in North America.

Ultra provides application-engineered solutions in the key elements of mission critical and intelligent systems that are on many of the world's long-term defence programmes.  Ultra partners with the US Department of Defense (DoD direct and indirect sales represented 43 per cent. of 2020 revenue), the UK Ministry of Defence (MoD direct and indirect sales represented 13 per cent. of 2020 revenue) and other aerospace, defence and critical infrastructure providers, both directly and through prime contractors. 

Through innovative problem solving, and by using evolving technologies, Ultra engages directly with its customers to design mission-led solutions aligned to their future needs.  Technology design is Ultra's core capability, used to detect, distil, direct and deploy data and information where it is needed most.  In 2020, Ultra and its customers invested an amount equal to 17 per cent. of Ultra Group revenue into research and development, with the majority of customer funding coming from the US DoD or US prime contractors.

Ultra's core markets are the "five-eyes" nations (Australia, Canada, New Zealand, the UK and the US) in the following sectors: maritime, C4ISR/EW (command, control, communications, computers, intelligence, surveillance, and reconnaissance / electronic warfare), military and commercial aerospace, nuclear and industrial sensors.

Ultra's business units are:

1)         Ultra Maritime (46 per cent. of 2020 revenue)

A strategic partner in the maritime defence domain, primarily across the "five-eyes" nations, delivering:

·    Sonobuoy Systems;

·    Sonar Systems;

·    Naval Systems & Sensors; and

·    Signature Management & Power.

2)         Ultra Intelligence & Communications (28 per cent. of 2020 revenue)

Delivering information advantage to the war fighter through the intelligent application of technologies in:

·    Command, Control & Intelligence;

·    Tactical Communications;

·    Advanced Cyber Security; and

·    Specialised Radio-Frequency Systems.

3)         Critical Detection and Control (26 per cent. of 2020 revenue)

Developing and delivering control systems, data analytics and sensors to solve complex problems for customers in the following markets:

·    Precision Control Systems;

·    Forensic Technology; and

·    Energy, Industrial Sensors and Systems.

10        BINDING COMMITMENTS TO HM GOVERNMENT

Cobham recognises the specific importance of Ultra's contribution to the UK's economy and national security.  

Accordingly, Cobham and Cobham Group Holdings have agreed with Ultra in the Cooperation Agreement that they will offer legally binding and enforceable commitments to HM Government in respect of the Ultra Group.

Cobham and Cobham Group Holdings have agreed with Ultra that, as part of the Cooperation Agreement, they will, with Ultra's support and involvement, agree the detailed terms, duration, nature and form of these commitments directly with HM Government as it is HM Government that is the appropriate ongoing custodian for such commitments.  As such, Cobham will now engage proactively and collaboratively with HM Government to agree these legally binding and enforceable commitments, which would apply immediately from completion of the Acquisition to protect the Ultra businesses and stakeholders following closing, and will cover the following matters and areas:

·    safeguarding and supporting the UK's national security, including appropriate protections for sovereign UK capability, continuity of supply and critical capabilities in the UK, and appropriate board composition and national security clearance arrangements;

·    investing in Ultra's UK work force by protecting existing and creating new UK manufacturing and engineering jobs and apprenticeships and maintaining a UK headquarters;

·    increasing investment in innovation, and research and development in the UK, including by continuing to develop UK-registered intellectual property rights for use in the UK and through investment in new regional technology centres of excellence and funding of academic institutions; and

·    accelerating Ultra's ESG ambitions, including enhanced commitments on net carbon emissions, diversity and the community investment programme.

Cobham also intends to establish a forum between it and the relevant representatives of HM Government to enable ongoing dialogue, co-operation and monitoring to ensure that HM Government has full visibility of Cobham's delivery of the commitments.

No statement in this paragraph 10 constitutes or is intended to become a post-offer undertaking under Rule 19.5 of the Code.

11       INTENTIONS REGARDING BUSINESS, Management, employees, PENSION SCHEMES, research and development and locations

As set out in paragraph 4 (Background to and reasons for the Acquisition) above, Cobham believes that the combination of Ultra's high quality businesses with the Cobham Group's complementary design, engineering and manufacturing capabilities will enable the enlarged Cobham Group to deliver more integrated and higher performance solutions to their mutual customers and, in turn, greater benefits to all of their wider stakeholders through enhanced growth and profitability.  In addition, this consolidation will make both companies competitively stronger in a sector where scale matters.

Cobham understands the important role that Ultra plays in all the countries in which it operates and intends to continue to serve as an important supplier to the sector.  Ultra's core markets are the "five-eyes" allied nations (Australia, Canada, New Zealand, the UK and the US) and these will remain the key focus areas for the enlarged Cobham Group in the future.  Cobham intends to ensure that Ultra continues to thrive in each of these markets and continues to design mission-led solutions aligned to the future needs of customers across the "five-eyes" nations.  Cobham believes there are many exciting growth opportunities across the "five-eyes" nations and that Ultra's focus on these nations as its core markets, as well as its operating and research and development footprint across the "five-eyes" nations, positions the business very well for the future.

In the UK specifically, Cobham recognises Ultra's role in supporting the UK's strategic capabilities.  Cobham intends to ensure that Ultra will continue to deliver and maintain the capabilities to deliver on all of Ultra's contractual obligations, including those with HM Government in relation to which it has agreed to give legally binding undertakings.  In addition, Cobham believes that the broadened technology capabilities in the UK, US, Canada and Australia can be of great benefit to the UK's future defence needs, and it is Cobham's intention to support the UK in these pursuits, should HM Government desire it.

Cobham has had the opportunity to discuss at a high level with Ultra's senior management, Ultra's global investment in its Focus; Fix; Grow transformation programme and intends to fully support and accelerate this programme to deliver excellent outcomes for all stakeholders.

Prior to this Announcement, consistent with market practice, Cobham has been granted access to Ultra's senior management for the purposes of confirmatory due diligence.  However, because of the constraints of a public offer process, Cobham has not yet had access to sufficiently detailed information to formulate specific plans regarding the full impact of the Acquisition on the Ultra Group.  Therefore, following completion of the Acquisition, Cobham intends to work with Ultra's management to undertake a detailed evaluation of the Ultra Group (the "Review").  The Review will include:

·    an appraisal of the short and long-term objectives, strategy, and potential of Ultra's business;

·    engaging with the key stakeholders of each business;

·    an analysis of progress on Ultra's key products, programmes and research and development initiatives; and

·    considering how best to position Ultra's businesses to compete more strongly, which would include evaluating the best corporate organisational setup for the enlarged Cobham Group going forward.

The Review will also consider the Energy business and Forensics business, which together in 2020 represented less than 10 per cent. of the Ultra business measured by revenue and which in 2020 management of Ultra referred to as having less Ultra parenting benefit, and the fact that the Energy and Forensics businesses operate outside of the wider aerospace and defence markets.  Therefore, as part of the Review, Cobham will consider whether these businesses may be candidates for disposal as non-core to Ultra's wider aerospace- and defence-focused business. Any such decisions would only be taken in the light of the views of key stakeholders, including key government and other customers, and would be subject to the suitability of any potential buyers and the satisfaction of applicable regulatory approvals and conditions.

Cobham expects that the Review will be completed within approximately three to six months from the Effective Date.

Headquarters, locations, fixed assets, and research and development

Cobham and Ultra both have a history as innovators and a proven track record of utilising their advanced capabilities to deliver mission critical solutions to the UK, the US and other key allies.  Cobham is also committed to protecting Ultra's contribution to the defence of the UK.

In recognition of this, Cobham has no plans to undertake any material restructurings or change in the locations of Ultra's manufacturing or research and development facilities, in each case, other than pursuant to internal reorganisations within the enlarged Cobham Group or otherwise as set out in management's existing plans as part of the Focus; Fix; Grow transformation programme.  Cobham notes that under this programme, Ultra's management has already initiated the consolidation of some of its Greenford and Farnborough activities into a new facility in Maidenhead and is in the process of establishing expanded operations in Weymouth and Cheltenham.

Further, Cobham has no plans to change the location or functions of the main sites of Ultra's operating business units (which are currently variously in the US, Canada, Australia and the UK).  However, a limited number of corporate and support functions, including functions related to Ultra's publicly-listed status, will potentially not be needed following the completion of the Acquisition.  Cobham has not yet developed proposals as to how any such headcount reductions will be implemented, but any individuals impacted will be treated in a manner consistent with Ultra's high standards, culture and practices.

Other than pursuant to internal reorganisations within the enlarged Cobham Group or otherwise as set out in management's existing plans as part of the Focus; Fix; Grow transformation programme, no significant changes are envisaged by Cobham with respect to the redeployment of Ultra's fixed asset base.

Cobham understands the importance of research and development to Ultra and its businesses and, as noted above, has agreed to give legally binding undertakings to HM Government to increase investment in this area, including through investment in new regional technology centres of excellence and funding of academic institutions.

Pensions

Cobham recognises the importance of upholding Ultra's pension obligations and ensuring that its pension schemes are appropriately funded in accordance with statutory and trust deed requirements.

Ultra operates the Ultra Electronics Pension Scheme, a defined benefit pension scheme in the UK that was closed to new entrants in 2003 and closed to future accrual in 2016 (the "Ultra UK DB Pension Scheme").  As at 31 December 2020, the Ultra UK DB Pension Scheme had a net deficit of £56.6 million.  In relation to the Ultra UK DB Pension Scheme, Ultra has an existing agreement with the Trustee board pursuant to which Ultra has agreed to maintain payments at a level of £11 million per annum to eliminate the deficit over the period ending March 2025.  Cobham has held constructive discussions with the Trustee, and is delighted to confirm that Cobham and the Trustee have entered into a legally binding Memorandum of Understanding dated 13 August 2021 relating to the future funding of the Ultra UK DB Pension Scheme. The key terms of the Memorandum of Understanding include:

·   immediately from the Effective Date, entitlement of the Ultra UK DB Pension Scheme to cash contributions increased to £100 million in aggregate over five years, with £53 million to be paid on or before the first anniversary of the Effective Date and the remaining £47 million to be paid in the subsequent four years; and

·   as soon as practicable following the Effective Date, the grant to the Ultra UK DB Pension Scheme of £125 million of security to rank pari passu with the security granted to senior lenders to the Ultra Group to secure current and future liabilities of the Ultra Group to the Ultra UK DB Pension Scheme.

Ultra also operates a defined benefit pension scheme in Canada, which is closed to new employees and had a net deficit of £0.6 million as at 31 December 2020 (the "Canadian DB Scheme").  Cobham does not intend to reopen the Canadian DB Scheme and intends to continue with the regular payments currently being made by Ultra to maintain a satisfactory funding position. 

Since the Ultra UK DB Pension Scheme was closed, new UK staff have been invited to become members of the Ultra Electronics Group Personal Pension Plan and, since April 2011, the Ultra Electronics Group Flexible Retirement Plan.  Ultra also operates defined contribution plans in the US and Canada.  Cobham does not intend to make any changes to the current contribution arrangements for these pension plans.

Existing employment rights

Cobham intends to fully safeguard the existing contractual and statutory rights and terms and conditions of employment, including pension obligations, of the management and employees of Ultra and its subsidiaries in accordance with applicable law, and does not envisage making any material changes to the conditions of employment of the Ultra employees.

Save as described above and subject to the outcome of the Review referred to above, Cobham does not intend to make any material reduction to the headcount or any material change to the conditions of employment or to the balance of skills and functions of the Ultra Group's employees or management.  Rather, as noted above, Cobham intends to give legally binding commitments to protect existing and create new UK manufacturing and engineering jobs. 

Management incentivisation arrangements

Cobham has not entered into, and has not discussed any form of incentivisation arrangements with members of Ultra's management.  Cobham expects to put in place certain incentive arrangements for the management of Ultra following completion of the Acquisition.  Under the terms of the Cooperation Agreement, Cobham has agreed that Ultra may pay retention and recruitment bonuses up to an aggregate value of £6 million, in order to ensure that Ultra continues to maintain its world-class workforce.

Trading facilities

Ultra Shares are currently listed on the Official List and admitted to trading on the London Stock Exchange.  As set out in paragraph 16 (Suspensions and cancellation of trading, and re-registration), applications will be made for the cancellation of the listing of Ultra Shares on the Official List and the cancellation of trading of the Ultra Shares on the London Stock Exchange.

Post-offer undertakings

No statement in this paragraph 11 constitutes or is intended to become a post-offer undertaking under Rule 19.5 of the Code.

12        Ultra Share Plans

Participants in the Ultra Share Plans will be contacted regarding the effect of the Acquisition on their options and awards under the Ultra Share Plans and an appropriate proposal will be made to such participants which reflects their options and awards under the Ultra Share Plans in due course.  Details of the impact of the Scheme on each of the Ultra Share Plans will be set out in the Scheme Document.

13        Financing

The Consideration payable by Cobham to Ultra Shareholders under the terms of the Acquisition will be funded by a combination of equity and debt financing.

The equity is to be drawn from funds managed by Advent.  Other potential investors may take indirect minority interests in Cobham on or around the Effective Date or once the Acquisition completes.

The debt financing is to be provided pursuant to the Interim Facilities Agreements.

Rothschild & Co, Credit Suisse and Goldman Sachs, each in its capacity as financial adviser to Cobham, are satisfied that the resources available to Cobham are sufficient to satisfy in full the Consideration payable to Ultra Shareholders under the terms of the Acquisition.

Further information on the financing of the Acquisition will be set out in the Scheme Document.

14        Offer‑related arrangements

Confidentiality Agreement

On 19 July 2021, AIC, Cobham Limited and Ultra entered into the Confidentiality Agreement in relation to the Acquisition, pursuant to which, amongst other things, Cobham and AIC gave certain undertakings: (a) to, subject to certain exceptions, keep information relating to Ultra and the Acquisition confidential and not to disclose it to third parties; and (b) to use such confidential information only in connection with the Acquisition.  These confidentiality obligations will remain in force until the earlier of 19 July 2023 and completion of the Acquisition by Cobham.

Joint Defence Agreement

On 30 July 2021, AIC, Cobham Limited, Ultra and their respective legal counsels have entered into the Joint Defence Agreement to ensure that any exchange and/or disclosure of confidential information relating to the parties and in relation to, in particular, the anti-trust workstream, only takes place between their respective legal counsel and external experts, does not diminish in any way the confidentiality of such materials, and does not result in a waiver of any privilege, right or immunity that might otherwise be available.

Cooperation Agreement

On 16 August 2021, Cobham, Cobham Group Holdings Limited, AIC and Ultra entered into the Cooperation Agreement, pursuant to which: (i) Ultra has agreed to co-operate with Cobham and Cobham Group Holdings to assist with the satisfaction of certain regulatory conditions, and Cobham, Cobham Group Holdings and AIC have entered into commitments in relation to obtaining antitrust and regulatory clearances; (ii) Cobham and Cobham Group Holdings have agreed to offer to HM Government legally binding commitments covering the matters and areas described in paragraph 10 (Binding commitments to HM Government) above; (iii) Cobham  has agreed to provide Ultra with certain information for the purposes of the Scheme Document and to otherwise assist with the preparation of the Scheme Document; (iv) Ultra and Cobham have agreed to certain provisions if the Scheme should switch to an Offer; and (v) Ultra and Cobham have agreed certain arrangements in respect of employees and the Ultra Share Plans.

The Cooperation Agreement will terminate, inter alia: (i) if the Acquisition is withdrawn or lapses; (ii) if prior to the Longstop Date any Condition has been invoked by Cobham (where permitted by the Panel); (iii) at Cobham's election if the Ultra Directors withdraw their recommendation of the Acquisition or if the Ultra Directors recommend a competing proposal; (iv) if the Scheme does not become effective in accordance with its terms by the Longstop Date; or (v) otherwise as agreed between Cobham and Ultra.

15        STRUCTURE OF AND CONDITIONS TO THE ACQUISITION

It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement between Ultra and the Scheme Shareholders, under Part 26 of the Companies Act. 

The purpose of the Scheme is to provide for Cobham to become the owner of the entire issued, and to be issued, ordinary share capital of Ultra.  Under the Scheme, the Acquisition will be achieved by the transfer of the Scheme Shares by the Scheme Shareholders to Cobham in consideration for which the Scheme Shareholders will receive cash on the basis described in paragraph 2 above.

The Acquisition is subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to be set out in the Scheme Document and will only become Effective if, among other things, the following events occur on or before the Longstop Date or such later date as may be agreed in writing by Cobham and Ultra (with the Panel's consent and as the Court may approve (if such approval(s) are required)):

·      the approval of the Scheme being granted by a majority in number of the Scheme Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the Scheme Shares voted by those Scheme Shareholders (or the relevant class or classes thereof);

·      the Resolutions required to approve and implement the Scheme being duly passed by 75 per cent. or more of votes cast in person or by proxy at the General Meeting;

·      certain antitrust and regulatory approvals as described in Appendix 1 (including antitrust approvals in Austria, Canada, Germany, Turkey and the US and foreign investment and regulatory approvals in Australia, Canada and the UK) being obtained;

·      following the Court Meeting and the General Meeting and receipt of the required antitrust and regulatory approvals set out in Appendix 1, the Scheme being sanctioned by the Court (with or without modification, but subject to any modification being on terms acceptable to Cobham and Ultra); and

·      following the sanction of the Scheme by the Court, a copy of the Scheme Court Order being delivered to the Registrar of Companies.

The Acquisition shall lapse if:

·      the Court Meeting and the General Meeting are not held on or before the 22nd day after the expected date of such meetings, as set out in the Scheme Document in due course (or such later date as may be agreed between Cobham and Ultra);

·      the Court Sanction Hearing is not held on or before the 22nd day after the expected date of such hearing, as set out in the Scheme Document in due course (or such later date as may be agreed between Cobham and Ultra); or

·      the Scheme does not become effective on or before the Longstop Date.

Upon the Scheme becoming Effective: (i) it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Ultra Shares will cease to be valid and entitlements to Ultra Shares held within the CREST system will be cancelled.  In accordance with the applicable provisions of the Code, the Consideration for the transfer of the Scheme Shares to Cobham will be despatched no later than 14 days after the Effective Date.

Any Ultra Shares issued before the Scheme Record Time will be subject to the terms of the Scheme.  The Resolution(s) to be proposed at the General Meeting will, amongst other matters, provide that the Articles be amended to incorporate provisions requiring any Ultra Shares issued or transferred after the Scheme Record Time (other than to Cobham and/or its nominees) to be automatically transferred to Cobham on the same terms as the Acquisition (other than terms as to timings and formalities).  The provisions of the Articles (as amended) will avoid any person (other than Cobham and its nominees) holding Ultra Shares after the Effective Date.

Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document.  It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme Document will be published as soon as practicable and in any event within 28 days of this Announcement (or such later time as Ultra, Cobham and the Panel agree).

Subject, amongst other things, to the satisfaction or waiver of the Conditions, it is expected that the Scheme will become Effective in Q1 2022.

16        SUSPENSION AND cancellation of trading, and re‑registration

It is expected that the last day of dealings in Ultra Shares on the Main Market of the London Stock Exchange will be the business day immediately prior to the Effective Date and no transfers will be registered after 6.00 pm (London time) on that date.

In addition, it is expected that the London Stock Exchange and the FCA will be requested respectively to cancel trading in Ultra Shares on the London Stock Exchange's market for listed securities and the listing of the Ultra Shares from the Official List, in each case, to take effect on or shortly after the Effective Date.

Following the Scheme becoming Effective, Cobham intends to re-register Ultra as a private limited company and for this to take effect as soon as practicable on or following the Effective Date.

17        DISCLOSURE OF INTERESTS IN ULTRA RELEVANT SECURITIES

Except for the irrevocable commitments referred to in paragraph 7, as at the date of this Announcement neither Cobham, nor any director of either of Cobham, nor, as far as Cobham is aware, any person acting in concert (within the meaning of the Code) with Cobham:

·    has any interest in, or right to subscribe for, any relevant securities of Ultra; nor

·    has any short position in relevant securities of Ultra, including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery of relevant securities of Ultra; nor

·    has borrowed or lent any relevant securities of Ultra or entered into any financial collateral arrangements relating to relevant securities of Ultra; nor

·    is party to any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Code in relation to relevant securities of Ultra.

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities).  In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

18        OVERSEAS SHAREHOLDERS

The availability of the Acquisition or the distribution of this Announcement to Ultra Shareholders who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction.  Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.  Ultra Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities.  Ultra Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been published.

19        Documents PUBLISHED ON A WEBSITE

Copies of the following documents will by no later than 12 noon (London time) on the business day following this Announcement, be published on Ultra's website at www.ultra.group/gb/ and Cobham's website at www.cobham.com until the Effective Date:

·    this Announcement;

·    the irrevocable undertakings referred to in paragraph 7 above;

·    the financing documents referred to in paragraph 13 above;

·    the Confidentiality Agreement referred to in paragraph 14 above;

·    the Joint Defence Agreement referred to in paragraph 14 above;

·    the Cooperation Agreement referred to in paragraph 14 above; and

·    the consent letters from each of J.P. Morgan Cazenove, Numis, Credit Suisse, Rothschild & Co, Goldman Sachs and Morgan Stanley referred to in paragraph 20 below.

The contents of Ultra's website and Cobham's website are not incorporated into and do not form part of this Announcement.

20        General

Cobham reserves the right to elect (with the consent of the Panel and subject to the terms of the Cooperation Agreement) to implement the acquisition of the Ultra Shares by way of an Offer as an alternative to the Scheme.  In such event, the Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme.

The Acquisition will be made on the terms and subject to the Conditions and further terms set out in Appendix 1 to this Announcement.  The sources of information and bases of calculations contained in this Announcement are set out in Appendix 2 of this Announcement.  A summary of the irrevocable undertakings is contained in Appendix 3 to this Announcement.  Certain terms used in this Announcement are defined in Appendix 4 to this Announcement.

J.P. Morgan Cazenove, Numis, Rothschild & Co, Credit Suisse, Goldman Sachs and Morgan Stanley have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.

Enquiries:

Kirkland & Ellis International LLP is acting as legal adviser to Cobham in connection with the Acquisition.

Slaughter and May is acting as legal adviser to Ultra in connection with the Acquisition.

Further information

This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Ultra in any jurisdiction in contravention of applicable law.  The Acquisition will be implemented solely by means of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document), which will contain the full terms and conditions of the Acquisition including details of how to vote in respect of the Acquisition.  Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).  This Announcement does not constitute a prospectus, prospectus equivalent document or an exempted document.

J.P. Morgan Cazenove, which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting as financial adviser exclusively for Ultra and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters set out in this Announcement and will not be responsible to anyone other than Ultra for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the matters set out in this Announcement or any other matter or arrangement referred to herein.

Numis, which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser exclusively for Ultra and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to anyone other than Ultra for providing the protections afforded to clients of Numis, nor for providing advice in relation to the matters set out in this Announcement or any other matter or arrangement referred to herein. Neither Numis nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Numis in connection with this Announcement, any statement contained herein or otherwise.

Rothschild & Co, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively as financial adviser for Cobham and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Cobham for providing the protections afforded to clients of Rothschild & Co nor for providing advice in connection with any matter referred to herein.  Neither Rothschild & Co nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Rothschild & Co in connection with this Announcement, any statement contained herein, the Acquisition or otherwise.

Credit Suisse, which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting as financial adviser exclusively for Cobham and no one else in connection with the matters set out in this Announcement and will not be responsible to any person other than Cobham for providing the protections afforded to clients of Credit Suisse, nor for providing advice in relation to the content of this Announcement or any matter referred to herein.  Neither Credit Suisse nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Credit Suisse in connection with this Announcement, any statement contained herein or otherwise.

Goldman Sachs, which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting exclusively for Cobham and no one else in connection with the matters set out in this Announcement.  Goldman Sachs will not be responsible to anyone other than Cobham for providing the protections afforded to clients of Goldman Sachs nor for providing advice in relation to any matter referred to herein.

Morgan Stanley which is authorised by the PRA and regulated by the FCA and the PRA in the UK is acting exclusively as financial adviser to Cobham and no one else in connection with the matters set out in this announcement.  In connection with such matters, Morgan Stanley, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in relation to the contents of this announcement or any other matter referred to herein.

Overseas jurisdictions

The availability of the Acquisition to Ultra Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.  Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.  In particular, the ability of persons who are not resident in the UK to vote their Ultra Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

The release, publication or distribution of this Announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements.  Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.  This Announcement has been prepared for the purposes of complying with English law, the UK Listing Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of the UK.

Copies of this Announcement and the formal documentation relating to the Scheme and the Acquisition will not be and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction, and persons receiving such documents (including, without limitation, agents, custodians, nominees and trustees) must not, directly or indirectly, mail or otherwise forward, distribute or send them in or into or from any such jurisdiction.  If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to overseas shareholders will be included in the Scheme Document.

US Holders

US Holders should note that the Acquisition relates to the securities of an English company, is subject to UK disclosure requirements and practices (which are different from those of the US) and is proposed to be implemented by means of a scheme of arrangement under English law.  A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Exchange Act of 1934.  Accordingly, the Acquisition and the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules.  The financial information included in this Announcement and the Scheme Document has been or will have been prepared in accordance with IFRS, and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.  However, if, in the future, Cobham were to exercise its right to implement the Acquisition of the Ultra Shares by way of an Offer, such Offer will be made in compliance with applicable US tender offer and securities laws and regulations.

The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws.  Each Ultra Shareholder is urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.

It may be difficult for US Holders to enforce their rights and claims arising out of the US federal securities laws, since Cobham and Ultra are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US.  US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws.  Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

To the extent permitted by applicable law, in accordance with normal UK market practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Cobham or its nominees, or their brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Ultra Shares outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition becomes effective, lapses or is otherwise withdrawn.  These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices.

Forward-looking statements

This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Cobham and Ultra contain statements which are, or may be deemed to be, "forward-looking statements".  Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Cobham and Ultra about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this Announcement include statements relating to the expected effects of the Acquisition on Cobham and Ultra the expected timing and scope of the Acquisition and other statements other than historical facts.  Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved.  Although Cobham and Ultra believe that the expectations reflected in such forward-looking statements are reasonable, Cobham and Ultra can give no assurance that such expectations will prove to be correct.  By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; future market conditions; changes in general economic and business conditions; the behaviour of other market participants; the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which Cobham and Ultra operate; weak, volatile or illiquid capital and/or credit markets; changes in tax rates, interest rates and currency value fluctuations; the degree of competition in the geographic and business areas in which Cobham and Ultra operate; and changes in laws or in supervisory expectations or requirements.  Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.  Such forward-looking statements should therefore be construed in the light of such factors.  Neither Cobham nor Ultra, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.  You are cautioned not to place any reliance on these forward-looking statements.  Other than in accordance with their legal or regulatory obligations, neither Cobham nor Ultra is under any obligation, and Cobham and Ultra expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or estimates or quantified financial benefits statements

No statement in this Announcement is intended as a profit forecast, profit estimate or quantified financial benefits statement for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Cobham or Ultra, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Cobham or Ultra, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.  An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s).  An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified.  Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror.  A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8.  A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified.  You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Ultra's website at www.ultra.group/gb/ and Cobham's website at www.cobham.com by no later than 12 noon (London time) on the business day following this Announcement.  For the avoidance of doubt, the contents of these websites are not incorporated by reference and do not form part of this Announcement.

Requesting hard copy documents

In accordance with Rule 30.3 of the Code, Ultra Shareholders, persons with information rights and participants in Ultra Share Plans may request a hard copy of this Announcement by contacting Ultra's registrars, Equiniti Group plc, either in writing to Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom, or by calling +44 (0)371 3842048.  Calls outside the UK will be charged at the applicable international rate.  Lines are open between 8.30 am and 5.30 pm Monday to Friday excluding public holidays in England and Wales.

For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested.  Such persons may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.

Electronic communications

Please be aware that addresses, electronic addresses and certain other information provided by Ultra Shareholders, persons with information rights and other relevant persons for the receipt of communications from Ultra may be provided to Cobham during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments.  Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.

Person responsible

The person responsible for arranging the release of this announcement on behalf of Ultra is Louise Ruppel, General Counsel & Company Secretary.