London - Chemring Plc said it would be buying US firm Martin Electonics Inc (MEI) for $70 million. MEI manufactures ammunition and fuses whilst Chemring produces military countermeasures along with ammunition and explosives.
Chemring said it was funding the deal by making 2.67 million new shares available at the price of 2,250 pence per share. The rights issue is also set to help cover the cost of its $40 million purchase of Scot Inc in May.
The company said that its underlying first half profit increased 17 per cent to £23.6 million in the six months to the end of April. Revenue at the group was up 41 per cent to £150 million in the same period.
David Price, Chief Executive of Chemring said he expected the group to meet analysts full year forecasts and that MEI would become earnings enhancing before exceptional items in 2008/09
Last year MEI made an underlying pre-tax profit of $4.2 million.