AE Industrial Powders Up a New Platform

AE Industrial Partners has acquired Powder Alloy Corporation, a manufacturer of specialty metallic, ceramic, and thermal spray powders used in aerospace and industrial applications, from its founder. The acquisition establishes a new specialty materials platform for AE Industrial.

Powder Alloy Corporation (PAC) produces specialty powders used in original equipment and aftermarket applications across the aerospace, gas turbine, biomedical, power and energy, and broader industrial markets. The company’s products include nickel superalloy powders, ceramic and metallic thermal spray powders, and custom blends manufactured to precise customer specifications.

The company’s powders are used in applications where performance, consistency, and reliability are critical. Products typically undergo years of testing and qualification before being approved for use in aircraft engines, gas turbines, and other high-temperature environments.

PAC manufactures its products in-house using specialized processes that form molten metal into fine powder (inert gas atomization), coat particles with other materials (composite cladding), combine powders into custom blends (mechanical blending), fuse smaller particles into larger ones (agglomeration and sintering) and increase their density and strength (plasma densification). These capabilities allow PAC to control the composition, shape, and performance of each powder. According to AE Industrial, the result is a proprietary product portfolio that is difficult to replicate.

PAC, led by President and founder Steve Payne, is headquartered near Cincinnati in Loveland, Ohio. The company has been founder-owned since its 1973 inception. AE Industrial is the company’s first institutional owner, and the transaction is the cornerstone of a new specialty materials platform for the firm.

“For more than 50 years, PAC has built its reputation on delivering specialized powders that meet the most demanding specifications throughout our end markets,” said Mr. Payne. “AE Industrial understands these markets and brings the resources and relationships to help us scale production capacity, invest in next-generation formulations, and serve the growing demand for PAC’s existing portfolio of specification-controlled products.”

Demand for engineered metal powders is expanding on the back of jet engine and industrial gas turbine production. The gas-atomized metal powder market was valued at $6.1 billion in 2025 and is projected to grow about 6.1% annually through 2032, according to Intel Market Research, while thermal spray powders specifically stood around $4.0 billion in 2025 and are forecast to reach $5.8 billion by 2033. Aerospace and defense accounted for roughly a third of atomizing-powder demand in 2024, with titanium and nickel superalloy volumes rising faster still.

For the United States, the story is as much about supply security as growth. Powders qualified to aerospace and turbine specifications take years to develop and are produced by a thin roster of domestic suppliers, leaving customers exposed to gaps for exactly the difficult-to-make materials their programs depend on. That scarcity is what AE Industrial is positioning its platform to address.

“PAC’s end markets run on materials that are extraordinarily difficult to produce — powders engineered to exacting specifications, qualified through years of rigorous testing, and proven in the most demanding applications on earth and in the air. PAC has built exactly that capability over more than 50 years, and the breadth of their proprietary portfolio is something that simply cannot be replicated,” said Bryan McElwee, a partner at AE Industrial. “This investment is the foundation of our newest specialty materials platform. Our vision is to build the preeminent independent provider of proprietary powders and materials — a platform purpose-built to address the critical supply chain gaps that exist today for unique, difficult-to-produce materials across PAC’s end markets.”

“As a differentiated strategic manufacturing partner, the investment in PAC reflects our firm’s philosophy of supporting companies that are addressing the critical tollgates for national and economic security,” added Andrew McElhinney, a principal at AE Industrial. “This acquisition launches our specialty materials platform, and we see meaningful growth opportunities through new product development, strategic partnerships, and complementary acquisitions.”

AE Industrial’s investment thesis, drawn from those remarks, is straightforward: a 50-year-old, hard-to-replicate portfolio of qualified powders sitting in a critical supply chain, acquired as a platform to be grown through new formulations, partnerships, and add-on acquisitions — a fit with AE Industrial’s focus on capabilities tied to national and economic security.

Monroe Capital (NASDAQ: MRCC) Monroe Capital was the sole lead arranger and administrative agent on a senior credit facility used to support the acquisition of Powder Alloy Corporation. Monroe provides senior and junior debt financing to middle-market businesses with at least $3 million of EBITDA, special situation borrowers, and private equity sponsors. Investment types include unitranche financings, cash flow, asset-based, and enterprise value-based loans, as well as equity co-investments. Sectors of interest include healthcare, business services, technology, consumer, and niche manufacturing. Monroe was founded in 2004 and is headquartered in Chicago, with 10 additional offices throughout the United States and Asia.

AE Industrial is a Boca Raton, Florida-based private investment firm, with an additional office in Washington DC, that manages approximately $9.0 billion in assets as of March 31, 2026. The firm invests in technologies and services considered critical to national and economic security across national security, aerospace, and industrial services, deploying capital through private equity, venture capital, and aerospace leasing. AE Industrial has completed more than 155 investments since it began investing in 2015; the firm was founded in 1998.