Elbit Systems will acquire the American company Sparton for $ 380 million

Elbit Systems continues to strengthen its position as a vital supplier to the US military in niche markets, with little competition and high barriers to entry. Elbit Systems will acquire the American company Sparton, for $ 380 million. The acquired company's estimated sales turnover is $ 200 million per year and its operating profitability is 15% of turnover. Avercor Investment Bank was Sparton's financial advisor.
Florida-based Sparton develops and manufactures Sonobuoy buoys that are dropped into the water using a parachute by unmanned aerial vehicles. The floats are thrown in hundreds of water to get as much coverage as possible. The buoy, part of which is submerged in water, transmits and receives sound signals at sea depth that transmits its findings to a P-8A (Boeing 737 converted to an intelligence plane) and to UAVs in real time.
The advantage of acquiring Sparton is in the fact that it is one of only two suppliers licensed by the US Navy to supply it with the marine sensors designed to detect enemy submarines. The U.S. Navy's procurement budget for these sensors is $ 350-300 million a year. Another security company that develops sonar buoys is the French Thales but this company does not have the approval of the US Navy.
 Another interesting feature of Sparton is the development of the launcher of a Blackwing submarine pilot, developed by the American UAV manufacturer Aerovironment and intended for tracking and creating an intelligence image. Sparton is collaborating with Ultra, which is the US Navy's second authorized supplier, The two companies tried to merge in 2018 but the US Department of Justice hinted to them that this was an unsuccessful idea.
The $ 1.04 billion framework order (IDIQ) venture from the U.S. Navy for 2023-2019 is expected to be dismantled in 2024 and the U.S. Department of Defense feared that neither company would have enough resources to continue developing sonar buoys. The current deal is similar in this respect to the acquisition of Harris' night vision business for $ 350 million in September 2019. Even then, it was the two dominant night vision vendors for the U.S. military: Harris and L3, which were required to sell one of their operations to get approval to merge.