MPE Splits B&E Group in Sale to ACP

MPE Partners has sold the OEM manufacturing division of B&E Group to Cadence Aerospace, a portfolio company of Arlington Capital Partners since November 2017.

B&E Group operates through two business units. The OEM division (B&E) manufactures hard metal and complex engine components used in commercial aerospace, military and space applications and is comprised of B&E Precision Aircraft Components, D&S Manufacturing,  and New England Heat Treating Service.

The division is headquartered in Southwick, MA (40,000 sq. ft. facility), with another 30,000 sq. ft. facility in Westfield, MA.

The MRO division (DBA Safe Aviation Solutions), based in Hialeah, FL, provides repair and overhaul services with over 700 individually designed and approved repair procedures for commercial airline customers. The division is comprised of Safe Fuel Systems, Accel Aviation, and B&E Aircraft Component Repair.

B&E Group has been a portfolio company of MPE Partners since November 2015. In August 2017, the company acquired Safe Fuel Systems (SFS), a Hialeah, FL-based FAA/EASA certified component repair station that maintains, repairs and inspects aircraft components and parts for major domestic and international operators. The operations of SFS were merged into B&E Group’s MRO division and began operating under the Safe Aviation Solutions brand.

“MPE served as a great strategic partner and sounding board for our team as we executed on an aggressive growth plan, developed our best-in-class employee base, and further enhanced our robust manufacturing capabilities. We have enjoyed the partnership with MPE and are proud of the foundation we have built together,” said Bob Quaglia, president and COO of the B&E Group. As part of Cadence, B&E will continue to be run by Mr. Quaglia and its existing management team.

Cadence Aerospace is a supplier of components, subassemblies, and assemblies to manufacturers of aircraft, aerostructures, aero equipment, engine, and other commercial aerospace and defense platforms. The company has specific capabilities with difficult-to-machine geometries, hard metal alloys, and very large aerostructures. Customers of Cadence are major OEMs and Tier 1 suppliers and include Boeing, Airbus, Northrop Grumman, Fokker, Lockheed Martin, United Technologies, FACC, Honeywell and Spirit. Cadence, led by CEO Thomas Hutton, has operations in California, Arizona, Washington, Massachusetts, and Mexico, and is headquartered in Anaheim, CA.

“The acquisition of B&E builds on our investment thesis for Cadence by further expanding the company’s exposure to extremely complex and difficult to manufacture aerospace and defense components,” said Peter Manos, a managing partner at Arlington Capital. “The combination of B&E and Cadence’s Tell Tool and ADM divisions creates one of the leading and most technologically sophisticated engine components manufacturers in the industry. Combined with Cadence’s strong position in complex structural components, this acquisition further positions Cadence as a critical leader in the aerospace and defense supply chain.”

“We are proud of the investment made into both the people and the infrastructure to support the company’s growth trajectory, as the B&E Group was able to scale successfully and nearly double its earnings organically since our original investment,” said Peter Taft, a partner at MPE.

MPE invests in lower middle-market companies that are valued from $25 million to $150 million and have EBITDAs between $5 million and $20 million. Sectors of interest include high-value manufacturing and commercial & industrial services. The firm has offices in Cleveland and Boston.

Arlington Capital was founded in 1999 and has completed over 90 acquisitions since its inception. The Chevy Chase, MD-based firm is currently investing out of Arlington Capital Partners V LP, a $1.7 billion fund that closed in June 2019.

Houlihan Lokey was the financial advisor to the B&E Group on this transaction and Jones Day provided legal services.

© 2019 Private Equity Professional | November 5, 2019

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