Gooch and Housego Agrees 346 Million Pound Takeover by US Private Equity Firm Arlington Capital Partners

Shares in Gooch and Housego PLC surged 38% to 1,206.5 pence following the announcement that the AIM-listed photonics specialist has agreed to a £345.6 million takeover by Arlington Capital Partners, a Washington-based private equity firm. The transaction represents the latest acquisition of a UK-listed defence-linked company by American buyers.

The board has recommended a cash offer of 1,230 pence per share. When combined with a 4.9 pence interim dividend, shareholders will receive a total of 1,234.9 pence per share, representing a 41.3% premium to the previous day’s closing price of 874 pence.

According to the board, it rejected a series of unsolicited proposals from Arlington before granting due diligence access following the 1,230 pence approach. Directors stated that the offer provides immediate and certain value in cash whilst recognising the risks associated with delivering the company’s strategy as a smaller AIM-listed business. These risks include customer programme timing, supply chain constraints and the pace of recovery in certain end markets.

The board highlighted additional challenges facing the company, including difficulties in offering competitive remuneration as a UK-listed company of its size, limited share liquidity and the broader UK small and mid-cap market environment.

Chairman Gary Bullard indicated that the offer recognises the value of the company’s strategy, market position and long-term growth prospects.

Somerset-based Gooch and Housego, established in 1948, supplies mission-critical optics for aerospace and defence, industrial and life sciences markets. The company’s products are utilised in imaging and sighting systems, directed-energy applications, countermeasures and space laser communications. At the end of March, the order book stood at £167.3 million, representing a 16.5% increase at constant currency. Aerospace and defence revenue increased by 51.7% during the first half.

Arlington Capital Partners has raised more than $14 billion of committed capital and has completed over 200 transactions across 27 years, focusing on aerospace and defence, government services, healthcare and software sectors. Managing partner Peter Manos commented that Gooch and Housego’s technologies are becoming increasingly critical to next-generation optical and sensing applications.

The transaction values the company at 25.9 times adjusted operating profit on an enterprise value of £400.5 million. Completion of the acquisition requires clearance under the UK’s National Security and Investment Act and US merger control approval. The deal is expected to complete in the fourth quarter of 2026.