Advent International has closed the sale of CAES Systems to Honeywell in an all-cash transaction for $1.9 billion.
CAES provides advanced electronics components, including antenna systems and communication networks, used by aerospace and defense companies and has 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.
The acquisition of CAES expands Honeywell’s current defense and space portfolio and will enable Honeywell to increase production and upgrade positions on platforms including the F-35, a fifth-generation, multi-role stealth fighter aircraft developed by Lockheed Martin; the EA-18 Growler, a carrier-based electronic warfare aircraft developed by Boeing; the AMRAAM (Advanced Medium-Range Air-to-Air Missile) developed by Raytheon; and the GMLRS (Guided Multiple Launch Rocket System) developed by Lockheed Martin.
Similarly, Honeywell will also be able to introduce its products on new platforms, such as the SPY-6, a modular radar system developed by Raytheon; and UAS (Unmanned Aircraft System), including drones and unmanned aerial vehicles, and C-UAS (Counter-Unmanned Aircraft System) technologies used to detect, track, and neutralize unmanned aircraft.
According to Honeywell, the sale of CAES at $1.9 billion equals 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. In October 2022, Advent carved out the space systems business of CAES and sold it to Veritas Capital.
“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 have 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.”
“Honeywell’s acquisition of CAES builds on our leading position in defense technologies while also strengthening and expanding the solutions and capabilities we can offer across multiple critical military platforms,” said Jim Currier, Honeywell’s aerospace technologies president and CEO. “Together with CAES, we will continue to set the standard for excellence in the industry and deliver specialized solutions that will keep our customers at the forefront of innovation.”
The buy of CAES is Honeywell’s fourth acquisition this year. It 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 in June 2024; the acquisition of Civitanavi Systems, an Italy-headquartered maker of inertial navigation and stabilization components, for €200 million in March 2024; and Air Products’ LNG process technology and equipment business in July 2024 for $1.8 billion.
Honeywell (NASDAQ: HON) specializes in various 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 company was founded in 1906 by Mark Honeywell, and today, it has more than 100,000 employees, more than $36 billion in revenue, and a headquarters facility in Charlotte, North Carolina.
Advent International invests in companies active in business and financial services, healthcare, industrial, retail, consumer, leisure, 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.
© 2024 Private Equity Professional | September 13, 2024
