Military simulations firm acquired at 5x operating profits
Mon, 13 May 2024 | BUSINESS SALE
Mabway Limited, a military training and simulations company, has been acquired by Canadian firm Calian Group in a deal worth £24 million. Havant-headquartered Mabway has been a prime supplier to the British Army for over ten years.
Toronto-listed Calian Group announced that it would acquire the company for an enterprise value of up to £24 million (C$41 million) - approximately a 5x multiple of Mabway’s operating profit of £4.8 million in the year to September 30 2022.
During that period, the company reported turnover of £15.2 million, up from £13.4 million a year earlier, and post-tax profits of £3.9 million, up from £3.1 million in 2021. At the time, the firm’s total equity stood at £6.5 million.
Mabway specialises in large-scale defence role-playing environments simulating real-word operational environments. The firm also provides technical engineering education to the naval and maritime sectors.
The company has several UK offices and a more than 1,000-strong workforce comprising ex-military and civilian permanent staff and contractors. Mabway provides its services in the UK and Europe as well as the Middle East.
The deal enables Calian to expand its existing presence in the UK and Europe, while strengthening its military training and solutions portfolio across the region and generating opportunities for further diversification.
Calian Chief Executive Kevin Ford said that Mabway has "a strong offering that both complements and expands our current solutions in the military training and simulation sector.”
He continued: "This acquisition presents a great opportunity to leverage the capabilities of both companies to provide a more comprehensive range of solutions to military and defence customers globally. And with the UK looking to increase defence spending to 2.5 per cent of GDP by 2030, Calian will be well positioned as a strategic partner supporting their operational readiness."
Mark O’Reilly, co-owner of Mabway, added: “We take our corporate culture seriously and share Calian's values of integrity, teamwork, innovation, respect and customer commitment. We are known for our unrelenting focus on providing mission-critical solutions for our customers and will be able to deliver even more effectively as part of the Calian team."
Mabway’s shareholders were advised on the deal by Momentum Coporate Finance. Momentum partner Alastair Boorman said: “Momentum has a market-leading track record in the defence and national security sector, having advised on multiple high-profile transactions in this area in recent years.”
Boorman added: "This deal also highlights the international nature of our transactions, and shows the continued demand for high-quality, UK-based assets from large corporate acquirers and investors. The strategic and cultural fit between Mabway and Calian is compelling, and we look forward to seeing the business continue to flourish under Calian's ownership."
Despite significant dealmaking headwinds, the UK remains the top destination in Europe for inbound and domestic M&A investment
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