Bain Capital bids for Chemring, shares surge

Investing.com -- Bain Capital, one of the world’s largest private equity investors, has made a bid to acquire Chemring (LON:CHG), the FTSE 250 defence and aerospace group, Sky News reported on Monday.

Shares of Chemring were up 14% at 08:08 ET (13:08 GMT).

Bain recently submitted at least one proposal, with an initial offer believed to be around 390p per share—representing a slight premium over Chemring’s 356p trading price on Monday morning, the report said citing a source. 

A second bid was reportedly in preparation, although it remains unclear whether it has been formally presented to the company’s board, chaired by former Meggitt (LON:MGGT) and Rolls-Royce (OTC:RYCEY) Holdings executive Tony Wood.

Chemring, which supplies high-tech defence products—including infrared countermeasures designed to repel enemy attacks—serves key clients such as NASA and SpaceX. 

The company employs about 2,700 people, based on its most recent financial disclosures in December.

Despite announcing a record order book, Chemring’s shares dipped following its last results statement due to profitability concerns linked to operational issues at a U.S. factory. 

However, investor sentiment has been buoyed by expectations of increased defence spending among NATO allies, particularly in light of Donald Trump’s return to the U.S. presidency.

Chemring’s current market capitalisation stands at approximately £975m, meaning a standard takeover premium of around 30% could push the deal’s valuation to £1.3bn. However, uncertainty remains over how aggressively Bain Capital will pursue the buyout, the report said.

The bid comes amid a wave of private equity interest in London-listed firms, with companies such as Learning Technologies Group agreeing to go private under General Atlantic and ongoing speculation around potential offers for BP (NYSE:BP) and ITV (LON:ITV). 

Recent takeovers include Britvic (LON:BVIC) and International Distribution Services, the parent company of Royal Mail (LON:IDSI).