Berkshire Partners has made an investment in Consolidated Precision Products (CPP), a current portfolio company of Warburg Pincus. With the transaction closed, Berkshire and Warburg now have equal ownership positions in CPP and, when combined, hold a majority position. Warburg acquired CPP from Arlington Capital Partners in October 2011.
Consolidated Precision Products is a manufacturer of 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. CPP operates 16 global facilities and is headquartered in Cleveland, OH (www.cppcorp.com).
“We are excited to continue expanding our suite of complex castings offerings and delivering best-in-class service in collaboration with Berkshire Partners and Warburg Pincus,” said James Stewart, chief executive officer of CPP. “Our new relationship with Berkshire Partners and ongoing partnership with Warburg Pincus will enable us to further build upon the success we have achieved. Both firms are growth-oriented and have deep expertise in the aerospace and defense sectors.”
“We are impressed by the remarkable growth driven by the CPP team and believe the company is well-positioned to continue its leadership in precision castings,” said Blake Gottesman, a managing director of Berkshire Partners.
The investment by Berkshire follows CPP’s announcement earlier this month that it will acquire the Cast Products business of publicly traded Allegheny Technologies (ATI). The Cast Products business is part of ATI’s High Performance Materials & Components unit and produces titanium investment castings that are used by aerospace & defense OEMs in the production of commercial jet airframes and engines. This transaction is expected to close in the early part of the third quarter of 2019 [“Warburg Continues Titanium Casting Build”].
“We are delighted to continue our long-standing partnership with CPP’s management team,” said Dan Zamlong, a managing director of Warburg Pincus. “CPP’s long-term commitment to building a market-leading platform in the aerospace and defense markets has proven to be successful. We are excited to partner with Berkshire Partners and the management team as CPP continues to deliver high-quality, mission-critical products for its customers.”
Berkshire Partners makes majority or minority equity investments of $50 million to $500 million in companies with enterprise values from $200 million to $2 billion. Typical targets will have revenues of more than $100 million and EBITDA greater than $25 million. The firm focuses primarily on North American companies however will pursue select international opportunities as well. Sectors of interest include consumer products and retail, business services, industrials, communications and healthcare. Berkshire is currently investing from Berkshire Fund IX LP, a $5.5 billion fund raised in 2016. The firm was founded in 1986 and is based in Boston (www.berkshirepartners.com).
Warburg Pincus has more than $58 billion in assets under management and has raised 18 private equity funds since its founding in 1966. The firm is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore (www.warburgpincus.com).
Morgan Stanley & Co. and Lazard were the financial advisors to CPP on this transaction.
© 2019 Private Equity Professional | June 14, 2019