Acquisition

RNS Number : 6489A

Chemring Group PLC

03 June 2021

 

3 JUNE 2021

CHEMRING GROUP PLC ("Chemring", the "Group" or the "Company")

ACQUISITION OF CUBICA GROUP

Chemring is pleased to announce the acquisition of Cubica Technology Limited ("Cubica") and Q6 Holdings Limited ("Q6") (collectively the "Cubica Group") (the "Acquisition"). The consideration will be satisfied by a payment in cash on completion, funded from Chemring's existing bank facilities, and a deferred consideration payable in Chemring 1p ordinary shares in two tranches on the second and third anniversary of completion. The Acquisition creates further opportunities for Chemring to enhance and further accelerate growth in its Roke business.

Acquisition overview

Cubica, based in Woking, Surrey, is a research and development company specialising in artificial intelligence, machine learning, data fusion and autonomy. Principally supplying into the defence and security sectors, Cubica is a trusted supplier to the UK Government, Law Enforcement, and a number of international defence suppliers and private sector organisations. Many of their technologies have been developed and commissioned to detect criminal behaviour, protect assets and help save lives.

Q6 is the majority shareholder of Vigil AI Limited ("Vigil AI"), which has technology providing state-of-the-art solutions to enable online platforms to detect imagery relating to child sexual exploitation globally. Vigil AI has established a joint venture in the US, Krunam KBC, Inc., a public benefit corporation ("Krunam"), in conjunction with Just Business Management, LLC, a US-based social enterprise firm. Krunam is leading the sales and deployment of the Vigil AI technology into the global commercial market.

Since being founded in 2013, Cubica and its employees have developed world-first technologies including its support to building the award-winning Vigil AI technology and its team members have received customer and industry accolades for their research and data science work. They are recognised by the UK Government as leading innovators in their field of expertise. The current owners of Cubica and Q6 will remain in employment with Chemring following completion of the Acquisition.

Opportunity and rationale

The Acquisition creates further opportunities for Chemring to enhance and further accelerate growth in its Roke business. Roke's customers require an exponential increase in capability to achieve digital advantage against complex threats. Cubica's leading edge capability in Machine Augmented Intelligence and Autonomy complements Roke's existing capabilities in cyber security, intelligence and electronic warfare, offering customers a force multiplier for their missions. In addition, Cubica's Omniscient and TensorGrid products will benefit from the increased scale of Roke's engineering investment and access to a wider international customer base. Roke plans to invest c£1m in Cubica and Vigil AI to support accelerated growth. This investment will be focused on research and development, infrastructure and security.

 Michael Ord, Chief Executive of Chemring, commented:

"With a focus on innovative protective technologies and outstanding delivery in support of their customers, the acquisition of the Cubica Group, a business we know well, is a valuable addition to Chemring's portfolio and will further accelerate growth in our Roke business.  

Specialising in artificial intelligence, machine learning, data fusion and autonomy, the Cubica and Vigil AI businesses are an excellent strategic and cultural fit for our Roke business and also offer significant additional research and development expertise as we invest in next generation technologies and expand our product, service and capability offerings.

This acquisition is further evidence of Chemring delivering against its strategy and demonstrates the progress that has made on our path to long-term sustainable growth."

- ENDS -

For further information:

Rupert Pittman	Group Director of Corporate Affairs, Chemring Group PLC	[phone]
Andrew Jaques James Bavister	MHP Communications	[phone]

Cautionary statement

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

Notes to editors

· Chemring is a global business that specialises in the manufacture of advanced technology and high reliability products and the provision of critical services to the aerospace, defence and security markets

· Chemring helps make the world a safer place. Across physical and digital environments, our exceptional teams deliver innovative protective technologies to detect and defeat ever-changing threats.

· Employing approximately 2,300 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries

· Chemring is organised under two strategic product segments:  Countermeasures & Energetics, and Sensors & Information

· Operating in niche markets and with strong investment in research and development, Chemring has the agility to rapidly react to urgent customer needs

www.chemring.co.uk

 

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