aerospace

Trive Forms Karman Missile & Space

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Trive Capital has formed Karman Missile & Space Systems in partnership with the senior management teams of Aerospace Engineering Corp. (AEC) and AMRO Fabricating Corporation.

Karman Missile & Space Systems provides design, engineering, precision machining, large part forming, thermal coating, and sub-assembly services of flight hardware and complex sub-assemblies used in space, missile, interceptor and hypersonic applications.

Some of Karman’s products include engine nozzles, nose cones, iso and ortho-grid body panels, titanium attachment hardware, and heat shields. Isogrid panels are partially hollowed-out structures usually formed from a single metal plate with triangular stiffening ribs. Orthogrid panels are similar but instead use rectangular stiffening ribs.

Karman has facilities near Los Angeles in Brea (Aerospace Engineering) and South El Monte (AMRO Fabricating), California; and a project management facility in Huntsville, Alabama.

Aerospace Engineering was acquired by Trive in August 2020, while the formation of Karman and the buy of AMRO (the name stands for “A Michael Riley Operation”) closed separately. According to Trive, Karman is now one of the largest independently owned manufacturers and suppliers of complex systems to the aerospace and defense sectors.

“Karman is well-positioned to benefit from rapidly increasing demand for space launch, missile defenses, and hypersonic weapon technologies with substantial content on the leading platforms currently in development,” said David Stinnett, a partner at Trive. “Both AEC and AMRO have established outstanding reputations for high quality and on-time delivery on the most intricate, difficult to manufacture flight hardware and assemblies. We share management’s vision for creating a full-service supplier for these markets and anticipate significant investment to support the capabilities and capacity demanded by customers both now and in the years to come.”

The senior leadership teams of both businesses, including Mike Riley, the former owner of AMRO, and Mark Mahboubi, the former owner of AEC, will continue as equity holders and executives at Karman with Mr. Riley holding the position of chief executive officer and Mr.  Mahboubi as chief technology officer.

“We are excited to form this new partnership with the collective vision to build an integrated supplier of flight hardware and assemblies for the space and missile markets,” said Mr. Riley. “Working collaboratively with Trive and AEC will allow us to continue growing with our customers, investing in new capabilities and adding capacity to alleviate current supply chain constraints.  Our goal is to build the preeminent Tier 1 systems integrator to the space sector, in a historically fragmented market.”

Trive invests from $10 million to $150 million of debt or equity in North America-headquartered companies with revenues of $40 million to $1.5 billion. The firm is industry-agnostic but has specific experience across a range of sectors including aerospace and defense, automotive, building products, business services, chemicals, and consumer goods. The firm was founded in 2012 by Conner Searcy and Chris Zugaro and is based in Dallas.

D.A. Davidson was the financial advisor to the shareholders of Aerospace Engineering, and KAL Capital Markets was the financial advisor to the shareholders of AMRO Fabricating.

© 2021 Private Equity Professional | January 28, 2021

Artemis Closes Adcole Maryland Exit

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Artemis Capital Partners has closed the sale of Adcole Maryland Aerospace to AE Industrial Partners.

Adcole Maryland Aerospace (AMA) is a manufacturer of guidance, navigation, and control components used in low-earth orbit and geosynchronous satellites, and interplanetary spacecraft. The company’s key products include sun sensors (a navigational instrument used by satellites and spacecraft to detect the position of the sun); and star trackers and cameras (used to determine the orientation of a satellite and spacecraft with respect to the stars).

AMA’s components have been used on numerous space missions including voyages to Mercury, Mars, Jupiter, Saturn, and Pluto, and its customers include the Department of Defense as well as other government agencies, and private companies in the aerospace and defense sectors. AMA, led by General Manager Don Wesson Jr., was founded in 1957 and is headquartered 30 miles west of Boston in Marlborough, Massachusetts.

Artemis acquired Adcole in May 2014 and in April 2017 spun out the company’s aerospace division and merged it with Maryland Aerospace to form Adcole Maryland.

“We’re very proud of what we have accomplished in partnership with the talented AMA team,” said Peter Hunter, the founder and managing partner of Artemis. “As a result of the company’s industry-recognized commitment to innovation and quality, AMA is uniquely well-positioned to meet the growing demand for high reliability, mission-critical satellite components and subsystems.”

Artemis Capital Partners invests in companies with revenues of $5 million to $50 million and EBITDA of $1 million to $10 million. Sectors of interest include manufacturers of differentiated industrial technologies, including aerospace, automotive, defense, energy, industrial automation, scientific and research, and medical sectors. The firm was founded in 2010 and is based in Boston.

“We have been impressed by AMA’s tenure, reputation, and respected flight heritage in the space industry, and we are excited to partner with a truly premier supplier of mission-critical technologies,” said Kirk Konert, a partner at AE Industrial Partners. “AMA represents the first company for our space technology platform, which will serve the growing demand from both the U.S. Government and the commercial market for space and satellite vehicles.”

Boca Raton-based AE Industrial Partners invests in the aerospace and defense, power generation, and specialty industrial sectors with a specific focus on technical manufacturing; distribution and supply chain management; maintenance, repair and overhaul; and industrial service-based businesses. Typical company targets will have from $50 million to $500 million of revenue. In July 2018, the firm held a final hard-cap closing of its second private equity fund, AE Industrial Partners Fund II LP, with $1.36 billion in commitments.

Mesirow Financial was the financial advisor to Artemis Capital Partners on this transaction.

Private Equity Professional | May 1, 2020

AE Industrial Buys Atlas from Graham

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FMI, a portfolio company of AE Industrial Partners, has acquired The Atlas Group from Graham Partners.

Atlas manufactures flight-critical, complex assemblies on a group of commercial, military and business aircraft, including the 737 MAX, F-35 Joint Strike Fighter, Gulfstream G650, and nearly every Textron Aviation aircraft. The company’s products include aircraft doors, escape hatches, wing structures, and flight control assemblies. Atlas’ customers include Boeing, Spirit AeroSystems, Textron Aviation, Honeywell, Northrop Grumman, and Gulfstream. Atlas, led by CEO Rick Wolf, is headquartered in Wichita, KS (www.theatlasgroup.biz).

Graham Partners formed Atlas in March 2007 through the acquisitions of Atlas Aerospace and Vitron Manufacturing. During its ownership term, Graham diversified the business into a broader mix of blue-chip customers and aircraft submarkets, expanded the company’s manufacturing technologies and engineering capabilities, and strengthened its manufacturing operations. Overall, the company’s revenues doubled and EBITDA increased by 88% from 2007 levels.

AE Industrial Partners (AEI) acquired FMI, a manufacturer of aerospace structural components and subassemblies, in October 2017. FMI manufactures large and complex components that are used on many of the largest commercial aerospace platforms including the 737, 737 MAX, 777, and 787. FMI’s customers include Boeing, Spirit AeroSystems, Asco Industries, Beechcraft, Caterpillar, General Electric, Phillips Petroleum and others. The company was founded in 1992 and is headquartered north of Wichita in Park City, KS (www.fmi-incorporated.com).

“Atlas has a strong reputation for addressing complex manufacturing challenges and delivering world-class quality to its customers,” said Jon Nemo, a Partner of AEI.  “The acquisition of Atlas represents a critical milestone in creating a highly strategic, purpose-built platform and we look forward to partnering with their senior leadership team to grow the business.”

AEI invests in the aerospace & defense, power generation and specialty industrial sectors with a specific focus on technical manufacturing, distribution and supply chain management, MRO (maintenance, repair and overhaul) and industrial service-based businesses.  Typical company targets will have from $50 million to $500 million of revenue. The firm is headquartered in Boca Raton (www.aeroequity.com).

“Atlas’ strong industry position and management’s focus on continuous improvement made it very rewarding to partner with the team,” said Chris Lawler, a Managing Principal at Graham Partners. “We are proud to have built a widely respected leading aerospace assemblies manufacturer and we wish Atlas continued success under new ownership.”

Graham Partners acquires companies with EBITDA between $5 million and $50 million and will invest in smaller companies as add-on acquisitions to existing portfolio companies. The firm is sponsored by the Graham Group, an industrial and investment concern with interests in plastics, packaging, machinery, building products, and outsourced manufacturing. Graham Partners was founded in 1988 and is headquartered in Philadelphia (www.grahampartners.net).

Lazard was the financial advisor to Atlas and PricewaterhouseCoopers was the financial advisor to AEI.

© 2018 Private Equity Professional | October 10, 2018

AIP to Acquire Vertex Aerospace

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Publicly-traded L3 Technologies has agreed to sell its Vertex Aerospace business to American Industrial Partners for $540 million in cash. The sale of Vertex includes its Crestview Aerospace and TCS business units.

Vertex Aerospace provides aviation logistics services, supply chain management, and maintenance, repair and overhaul services. Crestview Aerospace is a fabricator and assembler of rotary aircraft components and TCS provides aviation-related engineering services and logistics support. The combined business serves the US Department of Defense, including the Air Force, Navy, Army, Marine Corps, Customs Service, and Drug Enforcement Administration.

Vertex Aerospace was founded in 1977 as the product support division of the Beechcraft Company and was purchased by Raytheon in 1980 and renamed Raytheon Aerospace. L3 acquired the business from Raytheon in 2003. Today the company is headquartered north of Jackson in Madison, MS. Click HERE for the Vertex website.

American Industrial Partners makes equity and debt investments in North American-headquartered industrial companies that have revenues from $100 million to $750 million. Transaction values are typically less than $500 million. The firm was founded in 1989 and is headquartered in New York (www.americanindustrial.com).

L3 Technologies (NYSE:LLL) is a provider of a range of communication, electronic and sensor systems used on military, homeland security and commercial platforms. In 2017 the company had revenues of $9.6 billion and approximately 31,000 employees. L3 is headquartered in New York (www.l3t.com).

Moelis & Company was the financial advisor to L3.

Closing of this transaction is expected during the summer of 2018.

© 2018 Private Equity Professional | May 2, 2018

IGP Exits FMH Aerospace

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Industrial Growth Partners (IGP) has sold FMH Aerospace, a manufacturer of aerospace components and assemblies, to publicly-traded AMETEK for $235 million. IGP acquired FMH though its fourth fund in May 2015.

FMH is a manufacturer of components and assemblies for the commercial aerospace, defense, and space industries. The company’s products include metal bellows, bellow joints, metal ducting and metal hoses that are used to transfer fluids and gases that are at extreme temperatures and pressures and in demanding environments. For example, the company’s products are used in the hot section of engines or at cryogenic temperatures in rocket engine applications.  FMH has annual sales of approximately $50 million and is headquartered in Irvine, CA (www.fmhaerospace.com).

“IGP’s support of our company as it transitioned from a family-run business to an institutionally-backed enterprise was crucial,” said Rick Busch, CEO of FMH. “They were an ideal partner as we went through the process of expanding the senior management team, investing in key manufacturing processes and implementing a business operating system for continuous improvement initiatives.  Ultimately, these initiatives enabled us to more than double EBITDA during our partnership with IGP.”

Industrial Growth Partners invests in North American-based manufacturing and manufacturing services companies that have histories of profitability and revenues of up to $250 million. The firm was founded in 1997 and is based in San Francisco (www.igpequity.com).

“FMH is a high-quality acquisition for our Thermal Management Systems businesses with excellent positions across a number of attractive aerospace and defense platforms,” said David Zapico, AMETEK Chairman and Chief Executive Officer. “Its proprietary products and solutions further broaden our differentiated product offering serving these markets.”

AMETEK is a global manufacturer of electronic instruments and electromechanical devices with annual revenues of more than $4 billion.  The company consists of two operating groups: Electronic Instruments and Electromechanical Products. FMH Aerospace will become part of AMETEK’s Electromechanical Products group. AMETEK is headquartered in Berwyn, PA (www.ametek.com).

© 2018 Private Equity Professional | February 2, 2018

Arlington Buys Cadence from Court Square

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Arlington Capital Partners has acquired Cadence Aerospace from Court Square Capital Partners.

Cadence Aerospace was acquired by Court Square in May 2012 and is a supplier of components, subassemblies and assemblies to manufacturers of aircraft, aerostructures, aeroequipment, engine, and other commercial aerospace and defense platforms. The company has specific capabilities with difficult-to-machine geometries, hard metal alloys, and very large aerostructures.

Customers of Cadence are major OEMs and Tier 1 suppliers and include Boeing, Airbus, Northrop Grumman, Fokker, Lockheed Martin, United Technologies, FACC, Honeywell and Spirit. Cadence has operations in California, Arizona, Washington, Massachusetts and Mexico and is headquartered in Anaheim, CA (www.cadenceaerospace.com).

“Cadence’s robust set of manufacturing capabilities, customer relationships and favorable exposure to key growth platforms collectively present a compelling investment opportunity,” said Peter Manos, a Managing Partner at Arlington Capital. “Cadence stands to benefit from supply chain consolidation given its unique scale and capabilities as customers look to larger, more established industry players to drive manufacturing efficiencies, quality, and design innovation.”

Arlington invests in buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include government services and technology; aerospace and defense; healthcare; and business services and software. Arlington is investing out of its fourth fund which closed in July 2016 with $700 million of capital. The firm is based in Chevy Chase, MD (www.arlingtoncap.com).

“We are excited to partner with Arlington, a private equity firm with a successful history in the aerospace sector, to capitalize on the multitude of opportunities available to the company in our current end markets,” said Ron Case, CEO of Cadence. “Through a growth strategy that includes both organic capital investments and acquisitions, we are focused on creating value for our customers and employees alike.”

Court Square, the seller of Cadence, invests in middle market companies that are active in the business services, general industrials, healthcare, and technology/telecommunications sectors. Court Square is based in New York (www.courtsquare.com).

Lazard was the financial advisor to Cadence on this transaction.

© 2017 Private Equity Professional | November 17, 2017