Advent International has agreed to sell CAES Systems to publicly traded Honeywell in an all-cash transaction valued at $1.9 billion.
CAES is a provider of advanced electronics components including antenna systems and communication networks used by aerospace and defense companies with specific applications in missile defense radars and electronic warfare systems.
CAES was founded in 1934 by Sir Alan Cobham and today is headquartered in Arlington, Virginia, with 13 facilities in North America and more than 2,200 employees.
According to Honeywell, the valuation of CAES at $1.9 billion is equal to 14x the company’s estimated 2024 EBITDA.
Advent acquired CAES (then Cobham Advanced Electronic Solutions) in January 2020 and rebranded the company as CAES in February 2021. Advent carved out the space systems business of CAES and sold it to Veritas Capital in October 2022. Post closing, Veritas rebranded the space systems business as Frontgrade Technologies.
“As a trusted supplier and mission partner to our customers across advanced RF capabilities, I couldn’t be more excited to see CAES join the Honeywell team and work together to build on the outstanding expertise of both companies,” said Mike Kahn, the president and CEO of CAES. “Our extraordinary talent, RF breadth and world-class manufacturing facilities will offer new opportunities and further drive innovation for our industry.”
“This acquisition further positions Honeywell at the forefront of the defense industry’s most dynamic sectors and sets the tempo for continued growth across our aerospace business,” said Vimal Kapur, the chairman and CEO of Honeywell. “With the integration of CAES’ solutions and capabilities, we will fortify our existing defense offerings, while also expanding our capabilities in pivotal areas like RF, radar and sensing technologies, to ensure a market-leading position in areas that are critical for global security.”
“The sale of CAES to Honeywell marks a significant milestone for both parties, and we are confident that the business will continue to thrive and grow,” said Shonnel Malani, a managing partner at Advent International. “Under Advent International’s ownership, we have invested significantly in R&D, capital and capability enhancement, all of which has been pursued to drive growth and the development of cutting-edge capabilities. We believe this sale to a strong strategic home will secure its long-term future.”
Advent International invests in companies active in business and financial services; healthcare; industrial; retail, consumer, and leisure; and technology, media and telecom. The firm has 15 offices in 12 countries and employs over 250 investment professionals across North America, Europe, Latin America, and Asia. Founded in 1984 and headquartered in Boston, Advent has $92 billion in assets under management and has completed more than 405 private equity transactions.
Honeywell (NASDAQ: HON) specializes in an array of industries including aerospace, building technologies, materials, and safety and productivity products. The company’s products include aircraft engines, avionics, climate control systems, specialty chemicals, and industrial safety equipment.
The buy of CAES is Honeywell’s third acquisition this year and follows the purchases of Carrier Global’s access solutions business, a Florida-based maker of video surveillance, alarm monitoring, and electronic lock products, for $4.95 billion earlier this month; and the acquisition of Civitanavi Systems, an Italy-headquartered maker of inertial navigation and stabilization components, for €200 million in March 2024.
Post closing, the operations of CAES will be integrated into Honeywell’s aerospace technologies group which is led by CEO Jim Currier. “The combination of our talented teams will diversify and deepen our expertise and specialized capabilities that enable us to scale current offerings and innovate new ones across critical military platforms,” said Mr. Currier. “CAES’ trusted position with top U.S. defense customers strengthens our existing relationships as we shape the future of the defense industry together.”
Honeywell was founded in 1906 by Mark Honeywell and today has more than 100,000 employees, more than $36 billion in revenue, and a headquarters facility in Charlotte, North Carolina.
© 2024 Private Equity Professional | June 26, 2024
