Micross Components, a portfolio company of Behrman Capital, has acquired the high-reliability discrete diodes and assemblies business (DDA) of publicly traded Semtech for $30 million in an all-cash transaction.
DDA is a provider of diodes (electronic components that conduct current primarily in one direction), rectifiers (devices that convert alternating current to direct current), and transient voltage suppression products and assemblies (devices that protect circuits against transients and overvoltage events).
Many of the DDA’s products are used in aerospace, defense, and medical applications and include both Qualified Product List (QPL) and non-QPL products. Qualified product lists provide registers of goods and manufacturers that meet specific performance criteria and eligibility requirements. DDA’s products are designed to operate in a range of temperatures, vibrations, and harsh environments.
California-based Semtech (NASDAQ: SMTC), the seller of DDS, is a supplier of analog and mixed-signal semiconductors used in consumer, enterprise computing, communications and industrial end markets. According to Semtech, the fiscal year 2022 revenue for DDA was approximately $14 million. DDA is headquartered just south of McAllen, Texas in Reynosa, Mexico.
Micross is a supplier of microelectronic products and services used in aerospace, defense, space, medical and industrial applications. The Orlando-headquartered company is led by CEO Vincent Buffa, the former CEO of Data Device Corporation, another Behrman Capital investment that was sold to Transdigm in 2016 for $1 billion.
“We are delighted to partner with this team through the acquisition, to further expand Micross’ capabilities,” said Mr. Buffa. “With the addition of significant manufacturing capacity, we will be better positioned to produce an even wider range of high-quality products for our customers. Together, we plan to pursue a number of compelling opportunities to further realize our exciting growth prospects, all while upholding excellent quality and service to our customers.”
“This acquisition represents an extremely strong strategic fit for Micross, as the company continues to build out its product portfolio to better serve its customer base,” said Simon Lonergan, a managing partner at Behrman. “Adding Semtech’s high-reliability discrete products to Micross’ platform further differentiates the company’s leading position as a one-stop source of supply for high-reliability electronic products and services. We look forward to continuing to work with management to identify additional opportunities to drive growth at Micross.”
Behrman’s sixth fund, Behrman Capital VI LP (Fund VI), acquired Corfin Industries in February 2018. Just two years later, New Hampshire-based Corfin merged with Florida-based Micross Components, a portfolio company of Insight Equity, and the merged entity began operating as Micross. During Fund VI’s ownership of Micross, the company’s revenues increased by more than tenfold.
Micross’ acquisition of DDA is its fifth add-on acquisition under Behrman ownership and the first add-on since the February 2022 close of Behrman Capital Micross CF LP, a $500 million single asset continuation fund – anchored by Apollo and BlackRock – that acquired Fund VI’s equity interest in Micross. Both the general partner and limited partners of Fund VI, and Micross management rolled significant proceeds from the sale into the continuation fund. In addition to funding the buy of Micross, the continuation fund also provides capital to back both organic growth initiatives and add-on acquisitions.
Behrman Capital invests in management buyouts, leveraged buildups and recapitalizations of established growth businesses that are active in defense and aerospace, healthcare services, and specialty manufacturing and distribution. The firm has raised more than $4 billion since its founding in 1991 and is currently investing out of its sixth fund. Behrman Capital was founded by Grant and Daryl Behrman and has offices in New York City and San Francisco.
© 2022 Private Equity Professional | May 12, 2022
