Graycliff Partners has completed its sale of Skandia, a provider of interior products and services to the aviation industry, to publicly-traded TransDigm Group at an enterprise value of $84 million.
Skandia provides engineered seating foam, foam fabrication, flammability testing and acoustic materials to OEMs, completion and modification centers, as well as corporate and private aircraft owners and operators. A core product of the company is DAX foam, the industry standard foam used in business jet seats. The company’s products are primarily proprietary and are on all major business jet platforms, including those of Bombardier, Cessna, Dassault, Embraer and Gulfstream.
Skandia’s annual revenues are approximately $26 million and nearly 85% of revenues are derived from the business jet market with the remainder from commercial aerospace applications. The company, founded in 1983, has 70 employees and is headquartered near Rockford in Davis Junction, IL (www.skandiainc.com).
“We at Graycliff have greatly enjoyed working with the management team at Skandia over the last six years. We are confident that Skandia will be a positive addition to the TransDigm family of businesses and wish them well for a successful future,” said Will Henderson, a Managing Director at Graycliff Partners.
According to a confidential source, Graycliff realized a 6x return on invested capital and a mid-30 percent IRR on its investment in Skandia.
Graycliff invests from $5 million to $40 million of equity and mezzanine capital in companies with revenues of at least $10 million and EBITDA margins of 10% or higher. Sectors of interest include manufacturing, services and distribution. Both control and minority investments are considered. The firm was formed in December 2011 by the former investment team of HSBC Capital. Graycliff is headquartered in New York (www.graycliffpartners.com).
“Skandia is a long-standing supplier of proprietary, sole source products with established positions on nearly all business jet platforms, strong aftermarket content and an outstanding reputation with its customers,” said W. Nicholas Howley, Executive Chairman of TransDigm Group. “Skandia fits well with our consistent product and acquisition strategy. As with all TransDigm acquisitions, we expect the Skandia acquisition to create equity value in-line with our long-term private equity-type return objectives.”
TransDigm Group (NYSE: TDG) is a designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major products include actuators and controls, ignition systems and engine technology, specialized pumps and valves, electric motors and generators, NiCad batteries and chargers, among others. The company has more than 5,400 employees and is headquartered in Cleveland (www.transdigm.com).
Houlihan Lokey (www.HL.com) was the financial advisor to Skandia.
© 2018 Private Equity Professional | July 24, 2018
