KippsDeSanto & Co. advised QuantiTech LLC on its investment by Sagewind Capital LLC

KippsDeSanto & Co. advised QuantiTech LLC on its investment by Sagewind Capital LLC

KippsDeSanto & Co. is pleased to announce that our client, QuantiTech LLC (“QuantiTech” or the “Company”) has received a strategic investment by Sagewind Capital LLC.

Headquartered in Huntsville, Alabama, QuantiTech has served as a leading provider of highly technical engineering and management support services for vital mission-critical programs for nearly 30 years, primarily for the Department of Defense (“DoD”).  The Company serves as a trusted partner for key defense agencies responsible for maintaining technological superiority and warfighter dominance through the delivery of detailed studies, risk analyses, internally developed tools and frameworks, and thought leadership to solve complex and continuously evolving mission requirements.  QuantiTech’s core capabilities are focused on systems engineering, cybersecurity, test and evaluation, and program management for innovative priority spending areas, including hypersonics, counter-unmanned aircraft systems, and human spaceflight for the Army, Air Force, NASA, and various other defense agencies.

The Company’s suite of advanced capabilities is supported by a highly talented team of engineers and subject matter experts who possess deep domain knowledge and diverse real-world experience across myriad engineering disciplines.  Dedication to protecting national security interests coupled with a focus on delivering exceptional customer satisfaction have translated into exceptional growth across the Company.  QuantiTech boasts the ability to integrate large programs, with the maturity and vision to support continued growth and performance.

We believe this transaction demonstrates several key trends in the defense and government technology M&A environment:

  • Strong demand for advanced, engineering solutions and subject matter expertise designed to solve complex challenges for large scale and mission-critical programs across well-funded DoD and national security customers
  • Buyer focus on strategic alignment with high-priority, forward-looking, and well-funded mission areas such as space, hypersonics, and unmanned aircraft systems
  • Financial sponsors continue to deploy capital and compete with strategics in the defense and government services markets for coveted assets with long-term contracts, robust backlog, experienced management teams, and strategic footprints in growing markets as new platforms in the market

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

Sagewind Capital Invests in QuantiTech

NEW YORK, July 8, 2020 /PRNewswire/ — Sagewind Capital LLC (“Sagewind”), a New York-based private equity firm, announced today an investment in QuantiTech LLC (“QuantiTech” or “The Company”), a leading provider of highly technical engineering services to the Army, Air Force, NASA and various other key defense agencies. QuantiTech’s capabilities supporting hypersonics, counter unmanned aircraft systems and human spaceflight include systems engineering, cybersecurity, test & evaluation, and program management. Financial terms of the transaction were not disclosed.

“We are very excited to partner with the QuantiTech team,” said Steven Lefkowitz, Managing Partner of Sagewind. “QuantiTech’s founder, Sheila Brown, and Chairman, Randy Cash, have built a reputation for excellence and established the Company as an essential partner for our nation’s defense community. QuantiTech has highly educated and talented personnel who are passionate about missions critical to our national security. We are very impressed with the business the QuantiTech team has built and look forward to supporting them as they execute on their growth strategies.”

The management team of QuantiTech will continue with the company and will retain a significant equity ownership.

Darryl Wortman, President and CEO of QuantiTech said, “Sagewind is an ideal partner for us that has a strong track record of supporting government services companies. They have backed many management teams to help grow their businesses through acquisitions and other growth initiatives, which is exactly what we need as we strive to better support our customers’ critical missions by providing a broader set of capabilities.”

Mr. Cash, the former CEO of QuantiTech and a former Vice President in various roles at SAIC, will continue as Chairman of the Board of Directors. As part of the transaction, industry veterans Deborah Dunie, Dr. Paul G. Kaminski and General Paul Kern, US Army (Ret) will join the QuantiTech Board of Directors. Ms. Dunie brings over 30 years of senior level business experience in government services, most recently as the former CTO of CACI and a former Director of SAIC. Dr. Kaminski served as the Undersecretary of Defense for acquisition and technology from 1994 to 1997, has chaired and served on several company and government advisory boards, and was twice Chairman of the Defense Science Board, of which he is still a member. General Kern retired after almost 38 years with the US Army as the Commanding General of the Army Materiel Command and is currently a member of the Defense Science Board and a Senior Counselor at The Cohen Group.

Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Sagewind’s legal counsel. Maynard Cooper & Gale served as legal counsel to QuantiTech. KippsDeSanto acted as the exclusive financial advisor to QuantiTech.

About QuantiTech LLC

QuantiTech is a leading provider of highly technical engineering and management support services for the federal government, based in Huntsville, AL. It serves mission critical programs, primarily to key defense agencies responsible for maintaining technological superiority and warfighter dominance. QuantiTech’s capabilities are focused on systems engineering, cybersecurity, test & evaluation and program management for key defense end-markets such as hypersonics, counter unmanned aircraft systems and human spaceflight for the Army, Air Force, NASA and various other defense agencies.

About Sagewind Capital LLC

Sagewind Capital LLC is a New York-based middle-market private equity firm. Sagewind seeks to partner with exceptional management teams and focuses on significant capital appreciation by helping businesses grow organically and through strategic acquisitions. Since inception, Sagewind has made eight investments across several industries, including government services, aerospace & defense, software, information technology, healthcare and business services. The firm is focused on long-term capital appreciation and has the flexibility to own businesses for extended periods. For more information please visit www.sagewindcapital.com.

KippsDeSanto & Co. advises Transformational Security, LLC and Intelligent Devices, Inc. on their sale to HEICO Corporation

KippsDeSanto & Co. advises Transformational Security, LLC and Intelligent Devices, Inc. on their sale to HEICO Corporation

KippsDeSanto & Co. is pleased to announce the sale of its clients, Transformational Security, LLC and Intelligent Devices, Inc. (“TS,” “ID,” or the “Companies”), to HEICO Corporation (“HEICO”).

Headquartered in Columbia, MD, TS is a leading security technology company that designs, develops, manufactures and supports state-of-the-art detection and monitoring systems and sensors used to protect critical spaces from exploitation via wireless transmissions. TS’ solutions detect, identify and analyze an array of threats posed in communications, information and radio frequency security in support of its clients most exacting Technical Surveillance Countermeasures (“TSCM”), Counterintelligence, and Electromagnetic Spectrum Operations (“EMSO”) requirements. The Company’s proprietary, highly specialized hardware and software technology is used by its broad customer base across well-funded markets and applications including intelligence, military, law enforcement, government agencies, and the private sector.

Founded in 1995, ID provides state-of-the-art audio solutions to the enterprise, commercial, government and law enforcement communities in support of their most mission critical communications security requirements. Its highly specialized, revolutionary solutions and systems combine hardware, software and complex, proprietary algorithms with over fifty years of true expertise in audio recording, enhancement, and speech processing.

The HEICO family of companies is known for high quality and performance in providing products and services to niche segments within the aviation, defense, space, medical, telecommunications, and electronics industries. HEICO entered the TSCM field in June 2019 when it acquired Research Electronics International (“REI”). While TS and ID will remain separate businesses from REI, adding the Companies’ complementary capabilities and technologies will help TS, ID, and REI realize synergies from their respective teams’ collaboration, customer and market access to develop new technology and offer unique, expanded product offerings to customers.

We believe this transaction highlights several key trends in the cybersecurity and defense electronics M&A market:

  • Strategic buyers recognize the value of proprietary technology and highly engineered and differentiated solutions
  • Continued demand for innovative companies that offer integrated hardware and software-based solutions, utilizing technologies that are approved to sell to a broad market, including U.S. and international government, military, intelligence, law enforcement, and commercial enterprises
  •  Attractiveness of deeply embedded installed base and long-term relationships with hard-to-penetrate customers across multiple well-funded market segments
  •  Significant value attributed to operational synergies, complementary technology, customer relationships, and market know-how that represent significant opportunity for growth

 About KippsDeSanto & Co.

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

HEICO Corporation Acquires Two Preeminent Surveillance Countermeasures Companies

Purchases are HEICO’s 4th and 5th acquisitions in this fiscal year to date

August 12, 2020 08:30 AM Eastern Daylight Time

MIAMI & COLUMBIA, Md.–(BUSINESS WIRE)–HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) today announced that its Electronic Technologies Group acquired Intelligent Devices, Inc. (“ID”) and Transformational Security, LLC (“TS”) from their founder-owner-managers for cash at closing, plus potential additional cash consideration to be paid if certain post-closing earnings levels are attained. Further financial details were not disclosed.

HEICO stated that it expects the acquisitions to be accretive to its earnings within the first twelve months after closing. The acquisitions are HEICO’s fourth and fifth acquisitions in its current fiscal year, as well as being HEICO’s second and third acquisitions since the COVID-19 pandemic’s start.

ID, which was founded in 1995 by Edmund Pirali, and TS, which was founded in 2004 by Jon Whittingham, are leading security technology companies that design, develop, manufacture and support state-of-the-art detection and monitoring systems used to protect critical spaces from exploitation via wireless transmissions, technical surveillance, and listening devices. Their products include hardware and software which detect, identify and analyze an array of threats posed in cellular communication security, information security and radio frequency security.

ID and TS offer these solutions, commonly known as Technical Surveillance Countermeasures, or TSCM, to well-funded markets and applications, including intelligence, military, law enforcement, government agencies and the private sector. HEICO believes that emerging technologies and continued espionage desires by many governments, companies and people render this an important and growing market.

Although ID and TS are separate companies, Mr. Pirali and Mr. Whittingham partnered their companies in 2010 when they became roughly equal owners in each other’s company in order to share certain resources and jointly develop critical technologies. The two companies, which together employ approximately 50 people, are co-located in state-of-the-art facilities in Columbia, MD and share extensive resources.

Mr. Whittingham will serve as the firms’ President and Mr. Pirali will serve as their Vice President. HEICO stated that it does not expect any staff turnover to result from the acquisition and stated that the businesses shall continue to operate from their existing location. HEICO expects that the two companies will be fully combined within a reasonable time after the closing, though no timetable has been set, and HEICO emphasized that it does not anticipate any changes to staff, location, products or services to result from this mostly administrative change.

HEICO entered the TSCM field in June 2019 through its acquisition of 75% of market-leader Research Electronics International (“REI”) from its founder-managers, Tom Jones and Bruce Barsumian, who continue to own the remaining 25% of REI. Mr. Jones and Mr. Barsumian acquired 25% of ID and TS by contributing their proportionate share of the cash investment, with HEICO acquiring 75% of ID and TS. ID and TS will report to Mr. Jones, though they will remain separate businesses from REI while cooperating on developing new technology and offering unique expanded product offerings to customers.

 

Laurans A. Mendelson, HEICO’s Chairman and Chief Executive Officer, along with Victor H. Mendelson, HEICO’s Co-President and Chief Executive Officer of its Electronic Technologies Group, and Mr. Jones, jointly commented, “We welcome Edmund, Jon and all of the Intelligent Devices and Transformational Security Team Members to our HEICO family. The crucial TSCM field provides vital equipment and services to keep sensitive information from reaching the wrong hands and we are excited about the potential for all of our companies to bring great products to our customers.”

Mr. Pirali and Mr. Whittingham jointly remarked, “Transformational Security and Intelligent Devices are proud to be joining the HEICO family of companies. HEICO represents a philosophy of excellence, innovation and customer service that are at the core of TS and ID products and technologies. Partnering with HEICO extends and enhances our commitment to our customers. We look forward to continuing to serve our customers within the umbrella of a larger group, while maintaining our culture, customer service, and the unique capabilities TS and ID bring to counterintelligence, SIGINT, and spectrum operations customers.”

HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO’s customers include a majority of the world’s airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at http://www.heico.com.

Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO’s actual results may differ materially from those expressed in or implied by those forward-looking statements as a result of factors including: the severity, magnitude and duration of the COVID-19 outbreak; HEICO’s liquidity and the amount and timing of cash generation; the continued decline in commercial air travel caused by the COVID-19 outbreak, airline fleet changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales and profitability; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales, sales growth or profitability; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; our ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; economic conditions within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues; and defense spending or budget cuts, which could reduce our defense-related revenue and profitability. Parties reading this press release are encouraged to review all of HEICO’s filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.