Arlington Sells Centauri at Big Multiple

Arlington Capital Partners has agreed to sell Centauri to publicly traded KBR for $827 million in cash.

Centauri is a provider of engineering, intelligence, cybersecurity and advanced technology to intelligence and national defense agencies for applications on land, air, sea, space, and cyberspace. The company specializes in outer space and directed energy applications.

Centauri was formed by ACP in April 2019 to consolidate its national security investments in Integrity Applications (acquired in February 2018), Dependable Global Solutions (acquired in July 2018), and Xebec Global (acquired in October 2017).

Centauri, led by CEO David Dzaran and headquartered in Chantilly, Virginia, has just more than 1,750 employees and 22 offices across in Virginia, California, Hawaii, Ohio, Michigan, Pennsylvania, Massachusetts, and Maryland.

“Arlington’s bold vision for Centauri’s future is what led us to partner with them, and it is fulfilling to have seen that strategy realized,” said Mr. Dzaran. “Our partnership with Arlington has produced outstanding growth for Centauri and we are equally as excited for the next chapter with KBR, where our combined capabilities will allow us to advance our solutions to the next level.”

KBR (formerly Kellogg Brown & Root) is an engineering, procurement, and construction company and a former subsidiary of Halliburton (it was spun out as a public company in 2006). The company provides professional services and technologies to the government, defense, space, aviation, energy, and specialty chemicals sectors. KBR has performed under numerous contracts with the US military during World War II, the Vietnam War, and the Iraq War. KBR, led by CEO Stuart Bradie, was founded in 1901 and is headquartered in Houston.

KBR has announced that it expects Centauri to have 2021 revenues of more than $700 million and EBITDA of more than $70 million. This yields an 11.8x proforma EBITDA valuation multiple.

“During our partnership, Centauri achieved dramatic growth and, through unique subject matter expertise along with aggressive investments in technology, solidified its role as a strategic asset to the national security community,” said David Wodlinger, a partner at Arlington Capital. “Centauri was purpose-built to solve the most complicated space and directed energy challenges faced by our country, a strategy that will only be enhanced by KBR’s scale, strong management team and shared focus on quality and culture.”

“Centauri’s world-renowned technical talent, specialized mission expertise and advanced R&D labs are a powerful combination that underlies its enduring market advantage,” said Ben Ramundo, a vice president at Arlington Capital. “With continued investment behind those strengths as a result of joining KBR, Centauri’s brightest days are still ahead.”

Arlington Capital was founded in 1999 and has completed over 90 acquisitions since its inception. Areas of interest include government-regulated industries and adjacent markets including aerospace & defense; government services; and technology, healthcare, and business services. Arlington Capital, based in Chevy Chase, Maryland, is currently investing out of Arlington Capital Partners V LP, a $1.7 billion fund that closed in June 2019.

Jefferies was the financial advisor to Centauri and Citizens Capital Markets advised KBR.

Private Equity Professional | August 20, 2020

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