Graycliff Sells 901D to Curtiss-Wright

Graycliff Partners has sold 901D, a manufacturer of electronic systems and ruggedized shipboard enclosures used in military applications, to publicly traded Curtiss-Wright for $132 million in cash.

901D’s protective enclosure-based systems are made to customers’ exact specifications and are used with shipboard computing systems, command and control systems, vehicle communications systems and unmanned surveillance systems (“901D” is a military specification for high impact mechanical shock for equipment mounted on ships).

Customers of 901D include defense, aerospace, security and industrial systems integrators that sell to the Department of Defense (Navy, Army, Air Force, Marines), and to companies operating in the maritime, homeland security, industrial, and oil & gas sectors. 901D, led by CEO Frank Duvergne, has annual revenues of approximately $48 million and is headquartered north of New York City in Tallman, New York.

Graycliff acquired 901D through its third fund, Graycliff Private Equity Partners III LP, in June 2016 and during its ownership term worked to carve out 901D as a fully independent company from its prior ownership (Serge Seguin and Aldric Seguin) within a conglomerate of related businesses. Through internal promotions and external recruitment, Graycliff built the company’s management team, expanded the company’s production capacity and added increasingly complex systems integration capabilities to fulfill customer requirements for new and existing naval platforms.

“We enjoyed a highly effective partnership with our management team led by CEO Frank Duvergne and with the original founders of 901D, Serge and Aldric Seguin, who remained as minority shareholders and board members during Graycliff’s tenure,” said Steve Hindmarch, a managing partner at Graycliff. “We are particularly appreciative of the management team’s successful achievement of rapid growth under exceptionally challenging circumstances. We are confident that the business will continue to grow and thrive as part of the Curtiss-Wright organization.”

Curtiss-Wright (NYSE: CW) is a diversified manufacturer and service provider to the commercial, industrial, defense, and energy sectors. The company has more than 9,000 employees and is headquartered north of Charlotte in Davidson, North Carolina.

“The acquisition of 901D increases our footprint on critical U.S. Navy shipbuilding programs, as well as the breadth of our instrumentation and controls systems technologies,” said David Adams, chairman and CEO of Curtiss-Wright. “The combination of 901D’s proven track record and Curtiss-Wright’s state-of-the-art electronic systems and software capabilities will allow us to provide shipboard solutions on both nuclear and non-nuclear powered vessels and ensures that we are well-positioned to benefit from the continued expansion of our U.S. naval fleet.”

New York City-based Graycliff invests from $10 million to $50 million of control equity in companies with revenues of $10 million to $200 million and EBITDA of $4 million to $20 million. Sectors of interest include niche manufacturing, business services and value-added distribution. The firm was formed in December 2011 by the former investment team of HSBC Capital. In December 2019, Graycliff held a final closing of its latest buyout fund, Graycliff Private Equity Partners IV LP, at its hard cap with $350 million of limited partner commitments.

Lincoln International was the financial advisor to 901D on this transaction.

© 2020 Private Equity Professional | January 9, 2020

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