Arlington Capital Partners has acquired Pegasus Steel, a provider of fabricated steel structures and assemblies to the nuclear-powered shipbuilding sector.
Pegasus Steel’s products are used in the construction of submarines, aircraft carriers and other naval and industrial systems. The company specializes in cutting, forming, machining and welding of large-scale, complex fabrications. Pegasus is a supplier to many of the U.S. Navy’s highest priority programs including the Columbia-class submarine, the Virginia-class submarine and the Ford-class aircraft carrier.
Pegasus, led by CEO and founder Tony Deering, is headquartered near Charlestown in Ladson, South Carolina, and operates through two facilities with an aggregate of 350,000 square feet of manufacturing space.
“Pegasus has earned a tremendous reputation in the nuclear submarine and aircraft carrier market for delivering high quality fabrications on time and on schedule,” said Peter Manos, a managing partner at Arlington. “With parts weighing more than 800,000 pounds and among the largest structures in the industry, Pegasus enables its customers to utilize its own shipyards more efficiently to meet the required increase in output that the national security community demands. We are excited to partner with Tony to build upon Pegasus’ impressive achievements.”
“I am very proud of what the Pegasus team has achieved over the last 16 years,” said Mr. Deering. “This transaction is occurring at an inflection point in Pegasus’ growth trajectory and provides the company with the institutional backing of an experienced defense investor with a track record of growing businesses. The partnership with Arlington offers the large capital base and corporate strategy advice Pegasus desires as it drives towards its goal of becoming the leading ‘tier one’ partner in the nuclear Navy supply chain.”
“The supply and demand imbalance within the submarine and aircraft carrier industrial bases threatens the Navy’s future force structure and deterrence objectives,” said Ben Ramundo, a principal at Arlington. “In partnership with Tony, we are laser-focused on scaling the organization with the resources, investment and human capital to meet this challenge.”
Chevy Chase, Maryland-based Arlington Capital invests in 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 made a non-voting minority equity investment in the firm.
KippsDeSanto & Co. was the financial advisor to Pegasus Steel on this transaction.
© 2023 Private Equity Professional | June 16, 2023
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