Cerberus Capital Management has completed its acquisition of publicly-traded Sparton Corporation for $182 million in cash.
Sparton Corporation (NYSE: SPA) is a contract manufacturer of electromechanical devices that are used in medical, biotechnology, military, aerospace, industrial and commercial applications.
The company’s products include sonobuoys (sonar systems for transmitting submarine activity); inertial sensors (used for to measure navigation, acceleration, and velocity); and ruggedized LCD panel displays for use in harsh environments. Sparton has deployed over 6 million sonobuoys to the United States and foreign customers over the past 60 years.
Sparton’s services include concept development, design, engineering, production, distribution, field service, and refurbishment. Founded in 1899, the company has eleven manufacturing facilities in the US, one in Canada, and one in Vietnam with a headquarters in the Chicago suburb of Schaumburg (www.sparton.com).
Sparton’s TTM revenue is $389 million with an EBITDA of $28 million resulting in an EBITDA purchase price multiple of 6.5x. Sparton has been actively marketing itself for more than a year and an earlier agreement to be acquired for $234 million by British defense company Ultra Electronics was canceled in March 2018 due to US Justice Department antitrust concerns.
“This transaction represents an important milestone for our company,” said Joseph Hartnett, interim president and chief executive officer of Sparton. “Cerberus is an exceptional financial and operating partner that will help drive Sparton’s long-term growth and continue our track record of delivering industry-leading solutions to our customers around the world.”
“We are excited to partner with Sparton as it looks to the future,” said Dev Kapadia, senior managing director of Cerberus. “Building on the company’s foundation of market-leading capabilities and strong customer relationships, we look forward to supporting the Sparton team as they drive new innovations and capitalize on dynamic global opportunities.”
Cerberus has approximately $35 billion of capital under management and invests in three strategies: global credit opportunities (which includes non-performing loans, corporate credit & distressed debt, mortgage securities & assets, and direct lending); private equity; and real estate. The firm was founded in 1992 and is headquartered in New York (www.cerberuscapital.com).
© 2019 Private Equity Professional | March 5, 2019