Publicly traded TransDigm Group has agreed to acquire Raptor Scientific from L Squared Capital Partners for approximately $655 million in cash.
Raptor Scientific was founded in September 2019 by L Squared to invest in the highly fragmented aerospace-focused testing and measurement systems market. At that time, L Squared backed the effort with a $60 million capital commitment from the firm’s second fund.
Under L Squared ownership, Raptor completed five add-on acquisitions with the buys of Space Electronics, a Connecticut-based provider of engineering, testing and measurement services, including the design and manufacture of mass properties (weight, center of gravity, inertia), air data test technology, and radar cross section (RCS) measurement instruments (September 2019); Sensor Concepts, a California-based Tier II designer and manufacturer of RCS instruments and measurement services that are used by aerospace and defense OEMs to develop stealth programs including the F-35 Joint Strike Fighter (October 2020); TestVonics, a New Hampshire-based manufacturer of air data test equipment that is used to test, verify and calibrate instruments used on rotary and fixed-wing aircraft (March 2021); King Nutronics, a California-based manufacturer of test, measurement, and calibration equipment that is used in the defense, industrial, space, and aerospace markets (March 2023); and MEDTHERM, a Alabama-based provider of heat flux sensors, infrared radiometers, and thermocouples used in the aerospace, defense, space, and industrial markets (November 2023).
Today, Berlin, Connecticut-headquartered Raptor is a manufacturer of complex test and measurement components with significant aftermarket content and a strong presence across major aerospace and defense platforms. The company’s core capabilities include test and measurement instrumentation and services; physical property systems; and pressure, air data, and temperature systems. Nearly all of Raptor Scientific’s revenue is generated from proprietary products and the company is expected to have approximately $90 million in revenue for the year ending December 31, 2024.
Raptor Scientific, led by CEO Derek Coppinger, has more than 170 employees and manufacturing locations in California (2), Connecticut, Alabama, and New Hampshire.
“I greatly appreciate the support and resources the L Squared team have provided over the years as we built Raptor Scientific into a leading provider of complex test and measurement solutions supporting the defense, space, and aerospace industries,” said Mr. Coppinger. “We are excited to begin our next chapter of growth with TransDigm, who is well positioned to provide us with the additional resources and scale necessary to accelerate our momentum and drive future success. The world-class and dedicated employees of Raptor Scientific deserve the highest recognition for building this superior organization which supports our customers and warfighters every day. For that I am truly grateful.”
“We are grateful to Derek and the entire Raptor Scientific executive team for their leadership that drove this highly successful outcome,” said Sean Barrette, the chairman of the board of Raptor Scientific and a partner at L Squared. “Raptor Scientific was founded with the mandate to accelerate the growth of advanced aerospace and defense test and measurement technologies that support national security assets. These unique capabilities protect our freedom in a variety of operational theaters. We believe that TransDigm is the ideal new partner for Derek and the Raptor Scientific team as they continue this important mission.”
Newport Beach, California-based L Squared invests from $50 million to $125 million of equity in North America-based companies that have revenues of $20 million to $125 million and EBITDA of $5 million to $30 million. Sectors of interest include tech-enabled services and software, education technology, and industrial technology and services.
L Squared is led by Robert Healy, Jeff Farrero, Sean Barrette, Randall Hunt and Adam Kimura, all of whom worked together at Chicago Growth Partners prior to founding L Squared in July 2014. In November 2023, L Squared held the final closing of its fourth fund with $840 million of capital. The firm’s earlier fund closed in September 2020 with $505 million of capital.
TransDigm (NYSE: TDG), is a designer, producer and supplier of aircraft components for use on nearly all commercial and military aircraft in service today. Major product categories for the company include pumps and valves used in aircraft fluid control systems including fuel, hydraulic fluids, and water; motors, actuators, and controls used to for the movement and control of aircraft parts; quick disconnects, couplings, and rods used to quickly and securely connect and disconnect fluid and air lines; batteries, chargers, and power conditioning components used in both primary operations and backup systems; and specialized flight, wind tunnel and jet engine testing services and equipment.
TransDigm was founded in 1993 by Kelso & Company to acquire four aerospace companies – Adel Fasteners, Aero Products Component Services, Controlex Corporation and Wiggins Connectors – from IMO Industries. Today, Cleveland, Ohio-headquartered TransDigm is led by President and CEO Kevin Stein and is comprised of 48 independent companies with 60 manufacturing locations in the United States and 7,000 employees.
“We are excited about the acquisition of Raptor Scientific,” said Mr. Stein. “The company’s comprehensive proprietary and highly engineered product portfolio of aerospace and defense testing and instrumentation solutions fits well with our value generation strategy. Raptor Scientific’s test and measurement solutions are used on a diverse range of new and existing aircraft platforms, and the company has an outstanding reputation with its customers. As with all TransDigm acquisitions, we expect this acquisition to create equity value in-line with our long-term private equity-like return objectives.”
The sale of Raptor Scientific is the L Squared’s ninth overall exit since the firm’s formation in 2014 and its second exit (Going Up? L Squared Sells Elevated to APi Group) in the last 45 days.
Harris Williams & Co. was the financial advisor to L Squared and Raptor Scientific on this transaction and BakerHostetler provided legal services. The BakerHostetler transaction team was led by Partner John Allotta and included Associates Katie O’Brien and Charlotte Pasiadis.
© 2024 Private Equity Professional | May 29, 2024
