Arlington Acquires Black Box Division
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Arlington Acquires Black Box Division

Arlington Capital Partners has completed its acquisition of the Government Solutions division of publicly-traded Black Box for a cash purchase price of $75 million. With the transaction now completed, the division has been renamed Tyto Athene.

Tyto Athene is a systems integrator and managed services provider of communications systems to the US Department of Defense and other civilian agency enterprise operations worldwide. The company is headquartered in Herndon, VA (www.gotyto.com).

Tyto Athene’s products include the Acuity Micro Data Center, a 30-pound ruggedized, carry-on micro data center that can provide immediate communications, applications, and information to deployed personnel anywhere in the world. The product is used in the event of an emergency, caused by natural disaster or act of war, where it can take weeks or even months to set up reliable communications. Tyto Athene will continue to be led by its existing management team, including Jeff Murray, the current Senior Vice President of the Government Solutions division, as the company’s new chief executive officer.

“We have been very impressed with the management team and the differentiated solutions that the company provides to their government clients as well as the company’s ability to develop new technologies such as the Acuity Micro Data Center; we believe that this technology will successfully address a strategic gap at the edge of the information infrastructure of Tyto Athene’s clients,” said Michael Lustbader, a Managing Partner at Arlington. “Additionally, we believe that the company will benefit from a number of secular tailwinds that will allow it to continue its strong performance as the US government modernizes its legacy IT infrastructure.”

Tyto Athene’s name originates from “Tyto”, the scientific name for owl, and “Athena”, the Greek goddess of wisdom and war. In mythology, when soldiers saw Tyto flying above the battlefield, it was a symbol that victory was near.

“We are impressed with the company’s proven past performance on highly-recurring managed services contracts, which provide the business with significant revenue visibility, as well as successful execution on large, multifaceted projects,” said Gordon Auduong, a Vice President of Arlington. “We believe that Arlington can provide the strategic support and necessary investments to accelerate this exciting platform.”

Arlington invests in buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include government services and technology; aerospace and defense; healthcare; and business services and software. Arlington is investing out of its fourth fund which closed in July 2016 with $700 million of capital. The firm is based in Chevy Chase, MD (www.arlingtoncap.com).

Black Box (NASDAQ: BBOX) is a provider of IT infrastructure, specialty networking, multimedia, and keyboard/video/mouse switching products. The company was founded in 1976 and is headquartered in Lawrence, PA (www.blackbox.com).

Raymond James & Associates (www.raymondjames.com) was the financial advisor to Black Box on this transaction. With the assistance of Raymond James, Black Box is continuing to explore strategic alternatives to address its liquidity needs which include refinancing, restructuring and the sale of other assets.

© 2018 Private Equity Professional | August 28, 2018

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