KippsDeSanto & Co. is pleased to announce the acquisition of Thistle Design (MMC) Limited (“Thistle”) by an affiliate of our client, BEI Precision Systems & Space Company, Inc. (“BEI PSSC”), a portfolio company of J.F. Lehman & Co.
Following the acquisition of BEI PSSC in April 2017, J.F. Lehman has bolted-on Thistle to complement BEI PSSC’s portfolio of optical encoders, accelerometers, optical scanners, and custom space instruments, with Thistle’s engineering and production capabilities in encoders, resolvers, and other positioning and measurement sensors.
The acquisition provides BEI PSSC with an expanded, international customer base, as Thistle supports several high-profile UK land system and naval programs alongside several well-known prime contractors. Additionally, Thistle also supports numerous industrial applications for customers throughout the UK and Europe.
BEI PSSC hopes to leverage its strong reputation and customer relationships within the industry to market and promote Thistle’s products in both the U.S. and internationally to create significant value. This marks BEI PSSC’s first acquisition and the Company continues to focus on both organic and inorganic growth opportunities.
KippsDeSanto & Co. is an investment bank focused on delivering exceptional M&A and financing transaction results for leading aerospace, defense, and technology companies. For more information on KippsDeSanto & Co., please visit www.kippsdesanto.com.
BEI Precision Systems & Space Company, Inc. Announces Acquisition of Thistle Design (MMC) Limited
November 14, 2018
NEW YORK – BEI Precision Systems & Space Company, Inc. (“BEI PSSC”), a portfolio company of J.F. Lehman & Company (“JFLCO”), announced today the recent acquisition of Thistle Design (MMC) Limited (“Thistle”) by one of its affiliates.
Headquartered in Loanhead, Scotland, Thistle is a supplier of encoders, resolvers, and other positioning and measurement sensors for the defense and industrial markets, primarily in the UK.
BEI PSSC is a leader in high-accuracy positioning sensor technologies, providing advanced design, manufacturing and testing for reliable and resilient products and systems. BEI PSSC’s core product lines, which are used primarily in mission-critical defense and space applications, include optical encoder-based positioning systems, scanners for situational awareness requirements and precision accelerometers. BEI PSSC is headquartered in Maumelle, Arkansas, and has a longstanding track record of technological innovation, with corporate roots dating back to 1862.
“Thistle is BEI PSSC’s first add-on acquisition and represents an important step in executing BEI PSSC’s strategy of augmenting organic development with complimentary add-on acquisitions,“ said Steve Brooks, Partner at JFLCO. “Thistle’s dedicated engineering talent, proprietary suite of products, and focus on customer service represents a strong strategic fit with BEI PSSC’s core operating principles. We are looking forward to further serving our collective customer bases with this broadened portfolio of solutions,” added Will Hanenberg, Principal at JFLCO.
KippsDeSanto & Co. served as financial advisors to BEI PSSC and JFLCO and Jones Day (lead counsel) and Miller & Chevalier Chartered (international trade, government contracts and defense security compliance matters) provided legal counsel.
KippsDeSanto & Co. is pleased to announce the investment in System High Corporation (“System High” or the “Company”) by Enlightenment Capital (“Enlightenment”). Headquartered in Chantilly, VA, System High has established itself as a preeminent provider of global protection and security technical engineering solutions for critical National Security and Special Access Programs (“SAP”) across the Department of Defense (“DoD”) and Intelligence Community (“IC”). As a pioneer of industry best practices crafted to solve complex, evolving security challenges in support of sensitive programs, the Company’s proprietary methodologies and frameworks preserve advanced technological superiority and unique capabilities across classified, SAP, and Sensitive Compartmented Information programs complete lifecycles. Coupled with non-traditional protection services, cyber and engineering capabilities, custom training solutions, and experienced Subject Matter Experts deeply versed in a range of security disciplines, the Company’s differentiated security offerings have generated entrenched inroads with difficult-to-obtain, high-profile clients, including the Defense Advanced Research Projects Agency, the National Reconnaissance Office, and the Joint Strike Fighter Joint Program Office, among others, presenting major growth avenues into a sizeable, enduring market. As a new investment, Enlightenment expects to leverage the Company’s mission-critical suite of capabilities and extensive long-term relationships to expand its presence within a coveted DoD and IC customer base in support of enduring, critical national security programs.
We believe this investment demonstrates several key trends in the government services M&A market:
- Continued demand for sizeable, growing, IC-oriented firms
- Highlights the demand for scarce assets with a Full and Open contract profile backed by a suite of complementary value drivers
- Value continues to be placed on companies with mission-critical capabilities and support for SAPs and enduring programs poised to capitalize on budgetary tailwinds and technology modernization priorities
- Private equity firms continue to leverage strong credit markets and remain active in the government services market
About KippsDeSanto & Co. KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, 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.
Enlightenment Invests in System High
January 22, 2019 Chevy Chase, Maryland – Enlightenment Capital, an Aerospace, Defense & Government focused investment firm based in the Washington, DC area, announced it has invested in System High Corporation to help accelerate the Company’s growth. System High will serve as Enlightenment’s newest platform. System High is a leading provider of proactive protection (P2), security engineering, counterintelligence, and cybersecurity solutions, serving select government and commercial customers.
Founded in 2005 with offices in the Washington, DC area and Colorado Springs, CO, System High is a leader in the design, development, and enforcement of proactive protection systems that preserve critical technologies and enhance information protection systems for a multitude of government and civilian organizations. “System High continues to attract the best professionals in our business space, and our customers benefit from our team’s focus on supporting our clients’ security goals,” said Rob Howe, newly appointed CEO and President. “I am proud to partner with Enlightenment and the System High family of professionals, which are passionate about preserving our national security.”
“System High will serve as the initial investment of a new Enlightenment platform, which will provide mission critical protection of the technology that underpins many of the most sensitive efforts within the Defense, Intelligence, and commercial sectors,” said Jason Rigoli, Partner of Enlightenment Capital. “We look forward to working with the leadership team to drive the Company’s growth as they continue to play an integral role in this special arena.”
“System High sits at the critical intersection of defense innovation and IP protection,” said Devin Talbott, Managing Partner of Enlightenment Capital. “We plan to support management and invest in the Company’s continued momentum – both organically and through M&A.”
“Enlightenment is an ideal partner and will be instrumental in helping execute our new long range strategic plan,” said Kirk Blubaugh, Company Founder, who will join the Company board, remain a shareholder, and act as a strategic advisor to the Company.
About System High
System High provides high-end solutions for some of the nation’s most sensitive activities and has become a leading provider and integrator of global protection and security engineering services. System High’s reputation of succeeding where others have failed is a direct result of bringing together and delivering the most innovative, critical thinking professionals to solve the most complex security challenges across both government and commercial sectors. For more information, visit www.systemhigh.com.
About Enlightenment Capital
Enlightenment Capital, a Washington, DC area based private investment firm, provides senior debt, mezzanine debt, and equity to middle market companies in the Aerospace, Defense & Government (ADG) sector. The firm partners with businesses that provide vital services, protect critical infrastructure, innovate cyber and data solutions, enhance decision making capabilities, engineer aerospace systems,
safeguard national security, and endeavor to meet the challenges of today and tomorrow. For more information, visit www.enlightenment-cap.com.
KippsDeSanto & Co., a leading aerospace / defense and government technology solutions investment bank, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended December 31, 2018. The following table is our take on the most notable announced M&A transactions — not only based on size, but also on strategic importance and / or impact.
Of the above transactions, the following were especially noteworthy:
The aerospace and defense deal of the quarter is the all stock merger of equals between Harris Corporation (“Harris”) and L3 Technologies, Inc. (“L3”). Harris and L3 provide a wide array of defense technology-based solutions for global mission-critical challenges. The combined entity will have a market cap of approximately $30 billion and the deal was announced on October 14th. Under the terms of the deal, L3 shareholders will receive a fixed exchange ratio of 1.3 shares of Harris common stock for each share of L3 common stock. The merged company will generate an estimated $16 billion in revenue next year, effectively forming a sixth defense prime contractor. Strategic benefits of the merger include increased scale with a well-balanced portfolio of complementary franchises, shared culture of innovation and operating philosophies, and meaningful value creation through complementary markets and enhanced global presence. The transaction is expected to close in mid-year 2019, pending regulatory approval from the Department of Defense.
The government technology solutions deal of the quarter is Maximus, Inc.’s (NYSE:MMS) acquisition of General Dynamics Information Technology’s (“GDIT”) Citizen Engagement Center (“CEC”). The approximately $400 million all cash transaction was announced on October 9th and closed November 16th. GDIT’s CEC specializes in call center support for citizens in their dealings with federal agencies, such as the CMS and the Census Bureau. This acquisition strengthens Maximus’ position in the administration of federal government programs and bolsters the contractor’s ability to provide improved citizen services. The CEC business will likely add between $600 million and $625 million in FY19 revenue to Maximus’ top line, with anticipated mid-single digit operating margins. GDIT’s divestiture of its call center business follows the August sale of its Navy Systems Engineering and Acquisition Services Business Unit, acquired as part of its $9.7 billion acquisition of CSRA, Inc. This transaction is another example of larger acquirers executing on portfolio shaping activities following consolidation and mega-mergers.
|Click to access KippsDeSanto’s 2019 Aerospace/Defense & Government Services M&A Survey|
About KippsDeSanto & Co KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, 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.
KippsDesanto & Co is pleased to share its second annual survey of mergers and acquisitions (M&A) activity and sentiment in the Aerospace/Defense, Technology and Government Service sectors. In this study, we asked key dealmakers from relevant sectors to share their predictions about M&A deal activity and valuations over the next year.
We also asked them to share their insights on strategic drivers of M&A activity and the impact of recent events, including the 2018 United States midterm elections.
In this survey, we find dealmakers remain quite positive about 2019, with most expecting moderate economic growth and predicting M&A activity will increase somewhat or remain about the same as 2018. These are quite positive findings, given last year’s robust activity levels.
Last week, we touched upon various private equity buying trends. This week, we explore buying trends associated with public companies.
Read more on: Washington Technology
Since 2017, the federal government technology solutions (“GTS”) marketplace has experienced consistently strong M&A activity with more than 150 announced transactions. Department of Defense and civilian agencies are experiencing significant budget increases, public companies are trading at a record high valuation multiples and forecasting high single-digit organic growth, and lenders continue to provide attractive M&A deal financing.
Read more on: Washington Technology
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