Arlington Capital Partners has formed Stellant Systems to acquire the Electron Devices and Narda Microwave-West businesses of publicly traded L3Harris Technologies for $185 million in cash.
These two businesses were part of L3Harris’ aviation systems segment and are providers of radio frequency (RF) amplification products used in space, electronic warfare, radar, medical and industrial end markets.
Specific products of Stella include traveling wave tubes (TWT), microwave power modules (MPM) and other subsystems. TWTs are used in electronics to amplify radio frequency signals in the microwave range and MPMs are single components that combine a solid-state amplifier with a TWT and a power supply. Stellant is the only domestic provider of space-qualified TWTs. The company, now led by CEO Paul Russell, has over 800 employees across three facilities in Torrance, California; Williamsport, Pennsylvania; and Folsom, California.
“I am thrilled to be leading the Stella organization and to be a part of the Arlington portfolio,” said Mr. Russell. “Our groundbreaking Space Nano-MPM product line, High Power Microwave products for force protection and base defense, and critical cancer radiotherapy treatment products, to name a few, illustrate Stellant’s ability to deliver frequency and power agile products to meet unique mission needs in the space, spectrum dominance, secure communications and medical markets.”
“Stellant is our latest platform enterprise in the space and defense markets and continues our tradition of investing behind industry leaders,” said Peter Manos, a managing partner at Arlington. “Stellant is well-positioned now as a standalone entity for continued growth which we would seek to accelerate through further organic and inorganic investments into the company. We are pleased to have completed this transaction in partnership with Paul and his team and are excited to build a leader in the defense electronics market.”
“Stellant Systems represents a new beginning for a company with a rich history – from Howard Hughes, Charlie Litton and other industry giants – to today’s innovators across all three campuses,” added Mr. Russell. “Furthermore, Arlington brings deep experience investing in the most sensitive areas of the national security end market and brings an M&A and enterprise-building expertise that will support Stellant’s growth on a standalone basis.”
Chevy Chase, Maryland-based Arlington Capital was founded in 1999 and has completed over 90 acquisitions since its inception. Sectors of interest include government-regulated industries and adjacent markets including aerospace and defense; government services; and technology, healthcare, and business services. Arlington is currently investing out of Arlington Capital Partners V LP, a $1.7 billion fund that closed in June 2019. In February 2021, Goldman Sachs Asset Management (GSAM) made a non-voting minority equity investment in the firm.
“Stellant is an extremely unique asset within the defense electronics ecosystem,” said Ben Ramundo, a vice president at Arlington. “Stellant’s heritage, facilities, capabilities and credentials are unmatched, and we are eager to invest behind those qualifications to unlock the myriad of market opportunities available to the company.”
L3Harris is a provider of defense and commercial technologies used in space, air, land, sea and cyber applications. The Melbourne, Florida-headquartered company has approximately $18 billion in annual revenue and 47,000 employees, with customers in more than 100 countries.
Harris Williams was the financial advisor to Arlington Capital and Houlihan Lokey was the financial adviser to L3Harris.
© 2021 Private Equity Professional | October 12, 2021
