Cobham buys Axell to bolster commercial business

UK defence and space technology firm Cobham has bought local communications solutions specialist Axell Wireless in an £85m deal to strengthen its commercial offering.

Axell’s products are used to boost indoor cellular coverage, and have been used…

UK defence and space technology firm Cobham has bought local communications solutions specialist Axell Wireless in an £85m deal to strengthen its commercial offering.

Axell’s products are used to boost indoor cellular coverage, and have been used in high profile infrastructure projects ranging from the London 2012 Olympic Stadium to the Beijing and Singapore metros.

The acquisition sees Cobham enter the distributed antenna systems (DAS) and wireless coverage market for the first time, helping to diversify a business that is primarily focused on defence.

Axell CEO Ian Brown told SatelliteFinance that its products were complementary to the antennas that Cobham already makes, adding that synergies would also come from their similar RF and communications markets.

He described the deal as an opportunity for Cobham to enter an adjacent market that is “exploding” with demand across the world.

“The DAS and coverage sector is extremely fast growing because of the mass proliferation of smartphones, and the fact that about 80% of mobile phone traffic now emanates from within a building,” he said.

Cobham paid an initial £60m in cash upfront for privately-owned Axell, with the rest contingent on its financial performance over the next two years.

Brown declined to discuss those financial targets, but said the group generates £45m-£50m of revenues, and saw profits grow by more than a quarter last year.

He said: “Last year we grew 26%, the previous year we grew circa 20%. We’d be disappointed if we didn’t continue at that rate.”

Around 65-70% of Cobham’s business is defence orientated, and the company has been looking for adjacent sectors to expand its commercial mix. Last year it snapped up Danish satcoms equipment manufacturer Thrane & Thrane, which develops land earth stations for various Inmarsat services.

In a statement following the Axell deal, Fred Cahill, VP of Cobham’s antenna systems strategic business unit, said: “We are very excited to enter the DAS and coverage market with the acquisition of Axell and support Ian Brown and his team in their ambition of becoming the overall market leader.

“We see many sales, R&D and operating synergies with our existing businesses and look forward to realising them for the benefit of both Axell and Cobham customers over the coming years.”

Cobham posts revenues of around £1.8bn and has a heritage that goes back almost 80 years. Last year’s Thrane & Thrane deal doubled the size of its satcoms business, where it also has assets in South Africa, California and Florida.