Thales eyes $1.1bn Cobham Aerospace Communications acquisition to drive growth in avionics sector

Thales, a French multinational company, has announced its exclusive negotiations to acquire Cobham Aerospace Communications (AeroComms) for $1.1 billion.

Known as a leading supplier of advanced safety cockpit communication systems, Cobham Aerospace Communications is expected to generate approximately $200 million in revenues in 2023.

With this acquisition, Thales intends to bolster its avionics portfolio by incorporating Cobham Aerospace Communications’ cutting-edge products and capitalizing on solid positions with major OEMs and strong aftermarket/retrofit opportunities.

Cobham Aerospace Communications, with nearly 690 employees and about 190 engineers, operates across France, South Africa, USA/Canada, and Denmark. The company designs, produces, and supports a wide range of avionics solutions focused on cockpit communications, including full L-Band Satcom systems (antennas and transceivers), digital audio and radio management solutions, and passive antenna systems.

Nicolas Bonleux — Cobham Aerospace Communications CEO said: “This acquisition reflects the successful transformation of Cobham Aerospace Communications in recent years under Advent’s ownership. Our sizeable investment in R&D over the last years has further consolidated our position as a leading player in our markets, with a series of new contracts won already this year.

“​We are proud to join Thales, which will provide Cobham Aerospace Communications with a platform to build on recent success, continue the development of several cutting-edge avionics products, and ensure the business’ future growth. The aircraft connectivity and communication markets will undergo a true revolution in the coming years, which will unlock potential for unique avionics products like ours.

“Our combined offering with Thales Avionics will enable us to further accelerate our contribution to safer, greener, more comfortable and more efficient air travel.”

The acquisition aligns with Thales’ strategy to enhance its avionics offerings and strengthen its global standing in safety cockpit communications. The integration of Cobham Aerospace Communications’ portfolio is anticipated to position Thales to capitalize on the shift towards connected cockpits and address the permanent and secured connectivity needs of the aeronautical market by the end of the decade.

The deal is expected to lead to medium-term double-digit growth per annum for Thales and will be earnings per share accretive from the first year. Thales plans to finance this acquisition through its available cash resources.

Yannick Assouad — Thales Avionics Executive Vice-President said: “With the acquisition of Cobham Aerospace Communications and its highly skilled team of aerospace communications experts, and combined with our own critical avionics experts, Thales will establish a game changer in the very attractive and fast-growing communications and connectivity market to the benefit of a more sustainable aerospace future.

“By guaranteeing a cyber-secured, live connection between the cockpit and air traffic control, aircraft will be able to fly optimized trajectories in real time, significantly reducing fuel consumption and, consequently, CO2 emissions in the next two to three years.”

The transaction, subject to consultation with employee representative bodies of both Thales and AeroComms and customary regulatory approvals, is expected to close during the first half of 2024.