ESCO Completes Acquisition of SM&P

Rhea-AI Summary

ESCO Technologies (NYSE: ESE) has completed the acquisition of Signature Management & Power (SM&P) from Ultra Maritime for $550 million in cash. SM&P, which will join ESCO's Aerospace & Defense segment, provides mission-critical signature and power management solutions for US and UK naval defense markets.

The acquisition brings two key product lines: Signature Management, offering magnetic and electric field countermeasures for naval vessels, and Power Management, providing ultra-quiet motors for ship propulsion systems. This strategic move expands ESCO's presence in US Navy submarine and surface ship programs while extending into UK and AUKUS navy platforms.

The company will update its FY 2025 guidance to include SM&P's impact in the upcoming Q2 2025 earnings announcement on May 7, 2025.

Positive

• Strategic $550M acquisition expands naval defense market presence
• Adds sole-source product offerings for US Navy and UK naval programs
• Complements existing naval programs with signature and power management solutions
• Positions for growth in global naval defense spending

Negative

• Significant cash outlay of $550M may impact short-term financial flexibility
• Integration costs and risks not disclosed
• Financial impact on FY 2025 results yet to be determined

Insights

Financial/M&A Expert

ESCO's $550M acquisition of Ultra Maritime's SM&P business strategically expands naval defense capabilities with sole-source critical technologies in growing markets.

ESCO Technologies has completed a $550 million all-cash acquisition of Ultra Maritime's Signature Management & Power (SM&P) business, representing a significant strategic expansion of its naval defense capabilities. This acquisition enhances ESCO's position in the Aerospace & Defense segment by adding specialized technologies with sole-source product positioning.

The strategic value of this transaction lies in three key dimensions: 1) Increased content on US Navy submarine and surface ship programs, 2) Expansion into UK and AUKUS naval platforms, and 3) Addition of complementary product lines to ESCO's naval programs portfolio.

SM&P's product offerings include critical signature management solutions that provide magnetic and electric field countermeasures preventing underwater mine and sensor detection, along with specialized power management systems featuring ultra-quiet motors for ship propulsion that enhance stealth capabilities. These mission-critical technologies support naval defense applications where performance requirements are exceptionally stringent.

The $550 million transaction is substantial enough to require ESCO to update its FY 2025 guidance in its upcoming May 7 earnings announcement, indicating this will materially impact the company's financial profile. The timing aligns with increasing global naval defense spending as the US and allies upgrade aging naval defense programs.

This acquisition advances ESCO's stated long-term strategy of expanding leadership positions in high-growth end markets, particularly in specialized defense applications where barriers to entry are high and competitive advantages are sustainable.

St. Louis, April 28, 2025 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) today announced that it has completed the acquisition of the Signature Management & Power (SM&P) business of Ultra Maritime for a purchase price of $550 million in cash. SM&P is an established, long-standing provider of mission-critical signature and power management solutions for the US and UK naval defense markets. Their sole source product offerings will add significant scale to ESCO’s Navy businesses, providing increased content on US Navy submarine and surface ship programs and expansion into vital UK and AUKUS navy platforms.

SM&P will become part of ESCO’s Aerospace & Defense (A&D) segment. Their Signature Management and Power Management product lines are highly complementary to ESCO’s current naval programs. Signature Management offers solutions for surface ships and submarines that provide magnetic and electric field countermeasures to prevent underwater mine and sensor detection. Power Management provides innovative and highly-engineered motors that drive critical ship propulsion systems with an ultra-quiet design ensuring low vibration levels to increase stealth capabilities.    

This acquisition supports ESCO’s long-term objective of expanding our leadership positions in our high-growth end-markets. SM&P is well-positioned to benefit from increasing global naval defense spending as the US and its allies upgrade their aging naval defense programs.

Our previously issued FY 2025 guidance does not include the impact of the SM&P acquisition.   Our guidance will be updated to include the FY 2025 impact of SM&P in our Q2 2025 earnings announcement on May 7, 2025.

ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products, advanced composites, as well as signature and power management solutions for aviation, Navy, space, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit ESCO’s website at www.escotechnologies.com.

SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277

FAQ

How much did ESCO Technologies (ESE) pay for the SM&P acquisition?

ESCO Technologies paid $550 million in cash for the acquisition of Signature Management & Power (SM&P) from Ultra Maritime.

What products does SM&P bring to ESCO's portfolio?

SM&P brings signature management solutions for naval countermeasures and ultra-quiet power management motors for ship propulsion systems.

When will ESCO update its guidance to include the SM&P acquisition impact?

ESCO will update its FY 2025 guidance to include SM&P's impact during the Q2 2025 earnings announcement on May 7, 2025.

Which markets will ESCO expand into through the SM&P acquisition?

The acquisition expands ESCO's presence in US Navy submarine and surface ship programs, as well as UK and AUKUS navy platforms.

How does the SM&P acquisition align with ESCO's strategic objectives?

The acquisition supports ESCO's long-term objective of expanding leadership positions in high-growth end-markets, particularly in naval defense.