aerospace

American Capital Exits Paradigm Precision

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American Capital has sold its portfolio company Paradigm Precision Holdings to Dynamic Precision Group, a portfolio company of The Carlyle Group.

American Capital received $127 million in debt and equity proceeds on the sale of Paradigm Precision. The firm’s compounded annual rate of return earned on its senior debt, subordinated debt and equity investments since its first investment in Paradigm Precision in the first quarter of 2007 was 11%, including interest, dividends and fees earned over the life of its investment.

“American Capital is proud of its role in building Paradigm Precision into a leader of precision machined aerospace engine parts,” said Myung Yi, Senior Vice President and Managing Director, American Capital Special Situations Group. “American Capital has been fortunate to partner with an outstanding management team, which has driven Paradigm Precision’s growth and successful expansion into global markets.”

Paradigm Precision is a manufacturer of turbine engine and other machined products ranging from close tolerance parts to multi-level, highly complex assemblies. The company serves the commercial aerospace, defense and energy end markets. Paradigm has more than 600 employees and operates from six locations in Peabody (headquarters) and Malden, MA; East Berlin, CT; Tempe, AZ; Guaymas, Mexico; and Tunis, Tunisia (www.paradigmprecision.com).

Dynamic Precision Group was created by The Carlyle Group and AeroEquity Partners in December 2011 to build a platform of manufacturers of critical components for the hot section of commercial and military aircraft engines and industrial gas turbines. In addition to the acquisition of Paradigm Precision Holdings, Dynamic Precision Group has acquired TurboCombustor Technology, a manufacturer of critical aircraft engine components, predominantly combustors and flameholders/heatshields. TurboCombustor Technology operates facilities in Stuart, FL; Cincinnati, OH; and Budapest, Hungary (www.tct-inc.com).

“We are impressed with Paradigm’s broad capabilities and product portfolio on both current and next-generation engine platforms, and are excited about the combination of these two precision component manufacturers,” said Adam Palmer, Managing Director and Head of Carlyle’s Global Aerospace, Defense and Government Services team.

Acquisition financing was arranged by RBS Citizens and SunTrust Robinson Humphrey. Dynamic Precision Group and Carlyle were advised by Latham & Watkins and PricewaterhouseCoopers. Paradigm Precision was advised by Lazard Freres.

“Over the course of our investment, Paradigm built a strong position in all key and next-generation engine platforms,” said Yaniv Zief, Vice President, American Capital Special Situations Group. “We believe that Paradigm Precision is a great addition to Dynamic Precision Group’s business.”

American Capital is a publicly traded private equity firm and asset manager that originates, underwrites and manages investments of $10 million to $750 million in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $118 billion in total assets under management and has eight offices in the US, Europe and Asia. The firm is headquartered in Bethesda, MD (www.AmericanCapital.com).

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The firm employs 1,300 people in 32 offices across six continents and is based in Washington, DC (www.carlyle.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 2-21-13

PNC Riverarch Acquires Precision Aviation Group

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PNC Riverarch Capital has acquired a controlling interest in Precision Aviation Group (PAG), a provider of aviation maintenance, repair and overhaul services, from Florida Capital Partners.

PAG provides comprehensive supply chain and Inventory Supported MRO services for instruments, avionics and accessories for a variety of fixed-wing and rotary-wing aircraft.  The company was founded in 1993 and serves over 3,000 customers in 62 countries.  PAG is headquartered in Atlanta with facilities in Vancouver, BC; Long Beach, CA; Peachtree City, GA; Lafayette, LA; and Brisbane, Australia (www.precisionaviationgroup.com).

The acquisition of PAG by PNC Riverarch Capital was led by Michael Hand, managing director; Michael Rost, managing director; Robert Dolan, senior associate; and David Poss, associate.  Messrs. Hand, Rost and Dolan will serve on the PAG Board of Directors.

Senior debt for the transaction was provided by Fifth Third Bank and subordinated debt was provided by BB&T Capital Partners Mezzanine.

PNC Riverarch Capital is a middle-market private equity group that invests in privately-held companies headquartered throughout North America.  It seeks to invest $10 million to $50 million per transaction in support of recapitalizations, leveraged and management buyouts, corporate divestitures, and growth financings.  Sectors of interest include outsourced services, specialized manufacturing, and value-added distribution.  Since 1982, PNC Riverarch and its predecessors have provided over $1 billion in capital to more than 100 companies. The firm is based in Pittsburg, PA.  PNC Riverarch Capital is a division of PNC Capital Finance, which is a wholly owned indirect subsidiary of The PNC Financial Services Group (www.pnc.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-20-12

Littlejohn & Co. Exits Synchronous Aerospace Group

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Littlejohn & Co. has signed an agreement to sell its portfolio company, Synchronous Aerospace Group, to Precision Castparts Corp.

“It was a great pleasure to work with the Littlejohn team who gained a deep understanding of our business and operations, and were deeply engaged in helping us plan and execute on our targeted operational initiatives,” said Ron Case, President and Chief Executive Officer of Synchronous.  “We thank them for their support.”

Synchronous is a supplier of assemblies and components used in aircraft in the commercial aerospace and defense markets.  The company’s products include mechanical assemblies such as high-lift mechanisms and secondary flight controls, and structural assemblies which include wing ribs, bulkheads, and track and beam assemblies.  Synchronous’ core capabilities include gantry machining, hard-metal machining, high-speed machining, turning, sheet-metal forming, and metal and composite bonding.  Synchronous has 700 employees at its four operational centers located in Wichita, KS; Santa Ana, CA; Kent, WA; and Tulsa, OK.  Synchronous is headquartered in Santa Ana, CA (www.syncaero.com).

“Under the leadership of Ron Case over our ownership period Synchronous developed and executed against a set of meaningful strategic and operational initiatives to both expand the company’s book of business as well as enhance its profitability, all while creating an enterprise that is an integral part of its aerospace customers’ supply chains,” said Edmund Feeley, Managing Director of Littlejohn.

Lazard acted as the exclusive financial advisor and Morrison Cohen acted as legal counsel to Synchronous.

Littlejohn & Co. makes control and non-control investments in middle-market companies that are undergoing a fundamental change in capital structure, strategy, operations or growth. The firm is currently investing from Littlejohn Fund IV which has over $1.3 billion in capital commitments. Littlejohn & Co. is based in Greenwich, CT (www.littlejohnllc.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-27-12

American Industrial Partners Acquires U.S. Operating Subsidiaries of Hampson Aerospace

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American Industrial Partners has acquired the United States operating subsidiaries (“AIP Aerospace”) of Hampson Industries.

This transaction marks the fund’s fifth investment in 2012 and will be made out of American Industrial Partners Capital Fund V, LP, AIP’s $717.5 million fund that closed in December 2011.  “We feel fortunate to have found a business with such a unique set of competencies,” said Joel Rotroff of AIP.  “We are excited by the outlook for the commercial aerospace industry and look forward to working with management to drive growth and margin improvement.”

AIP Aerospace is comprised of five operating divisions with a total of approximately $210 million in sales. Three divisions are developers of metallic and composite aerospace molds, mandrels, assembly jigs and fixtures and include Odyssey Industries (Lake Orion, MI) (www.odysseytooling.com); Global Tooling Systems (Macomb, MI) (www.global-tooling-systems.com); and Coast Composites (Santa Ana, CA) (www.coastcomposites.com).  The remaining two divisions are manufacturers of aerostructure and composite components and include Composites Horizons (Covina, CA) (www.chi-covina.com); and Texstars (Grand Prairie, TX) (www.texstars.com).  Through these five operating divisions AIP Aerospace has approximately 1,140 employees and 10 manufacturing facilities located in California, Michigan and Texas.

“We are extremely pleased to be partnering with the American Industrial Partners team.  Our shared commitment to build on the demonstrated accomplishments of our businesses, as well as our focus on delivering expanded capabilities and value to our customers will drive profitable growth,” said Norman Jordan, CEO of AIP Aerospace.

American Industrial Partners seeks to acquire control positions in North American headquartered industrial companies with sales ranging from $100 million to $500 million. The firm was founded in 1989 and is currently managing more than $1.1 billion in equity capital. American Industrial Partners is based in New York (www.aipartners.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-20-12

Warburg Pincus Acquires Turbine Technologies Group

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Consolidated Precision Products (CPP), a portfolio company of Warburg Pincus, has reached an agreement to acquire the Turbine Technologies Group of ESCO Corporation.

Warburg Pincus, which acquired CPP in October 2011 and is CPP’s largest shareholder, plans to invest additional capital into the company to assist in financing the transaction.  “We are pleased to continue supporting the company and its growth plans, including through acquisitions,” said Dan Zamlong, Managing Director, Warburg Pincus.

A division of ESCO Corporation, the Turbine Technologies Group manufactures superalloy precision investment cast components used in the aerospace, power generation and other industrial markets. Products include blades, vanes and complex structural parts used in aircraft engines and industrial gas turbines. The group had revenues of $157 million last year and is based in Syracuse, NY (www.escocorp.com).

Consolidated Precision Products is a manufacturer of highly-engineered components and sub-assemblies for the commercial aerospace and defense markets. Founded in 1991, the company is one of the world’s largest investment and precision sand casting companies, producing complex super alloy, aluminum, magnesium and steel components for a wide variety of commercial and military aircraft, weapon systems, regional/business jets and helicopters. The company serves a range of global, blue chip customers including, Boeing, Airbus, Hamilton Sundstrand, General Electric, Honeywell, Pratt and Whitney, and Lockheed Martin on platforms such as the 737, 777, 787, A320, A340, F-35 Joint Strike Fighter, F-22 Raptor, Apache, V-22.  CPP is headquartered in Pomona, CA (www.cppcorp.com).

“We are excited about adding Turbine Technologies Group to the CPP family and plan to build on Turbine Technologies Group’s long-standing customer relationships, exceptional technical capabilities and superior customer service to position CPP for continued growth,” said Jim Riley, Chief Executive Officer and President, CPP.

Warburg Pincus has more than $30 billion in assets under management and has raised 13 private equity funds which have invested more than $40 billion in approximately 650 companies in 30 countries. The firm was founded in 1966 and is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai (www.warburgpincus.com).

ESCO Corporation is a designer, manufacturer and provider of highly engineered wear parts and replacement products used in mining, oil and gas resources, infrastructure development, power generation, aerospace and industrial applications. The company employs more than 6,000 people and operates in 28 countries on six continents, including a network of 36 manufacturing facilities and more than 50 sales and distribution offices.  The company is headquartered in Portland, OR (www.escocorp.com).

Lazard acted as financial advisor and Sheppard Mullin Richter & Hampton LLP and Cleary Gottlieb Steen & Hamilton acted as legal advisors to CPP.  Goldman, Sachs & Co. acted as financial advisor and Stoel Rives LPP acted as legal advisor to ESCO.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-8-12