KippsDeSanto & Co. Advises Physical Optics Corporation on its Sale to Mercury Systems, Inc. (NASDAQ: MRCY)

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KippsDeSanto & Co. advises Physical Optics Corporation on its Sale to Mercury Systems, Inc. (NASDAQ: MRCY)

KippsDeSanto & Co. is pleased to announce the sale of its client, Physical Optics Corporation (“POC” or the “Company”) to Mercury Systems, Inc. (“Mercury”).
Headquartered in Torrance, CA, POC serves as a leading designer, developer, and integrator of advanced technologies primarily focused on mission-critical avionics and subsystems for the most demanding defense applications, supporting airborne solutions broadly transferable to ground, maritime, and unmanned platforms. The Company’s principal expertise in optimizing size, weight, and power (“SWaP”) and enhancing encryption capabilities for the most complex and demanding avionics solutions has produced a robust portfolio of innovative products – much of which was developed leveraging the Small Business Innovation Research (“SBIR”) program – including data transfer systems, flight data recorders, mission computers, high-definition data and video recorders, and advanced encryption devices for well-funded and highly-visible programs of record. The common-use nature of POC’s technologies directly translates into broad adoption across the Navy, Army, and Air Force for newly fielded platforms (including burgeoning positions on future vertical lift, the B-2, and various unmanned platforms), as well as established relationships upgrading legacy aircraft (including the F-18, V-22, the H-60 family, T-45, F-16, F-15, and F-22).

Employing approximately 350 employees, including over 160 multi-disciplinary engineers and a deep bench of PhDs, POC has developed a substantial portfolio of intellectual property (“IP”), including over 160 patents as well as numerous SBIR-oriented technologies covering 60 diverse focus areas spanning avionics, electronic warfare, artificial intelligence, and machine learning. POC’s unique combination of avionics solutions, core IP and engineering expertise, embedded status on well-funded airborne programs, and state-of-the-art facilities uniquely position the Company to complement Mercury’s existing capabilities and accelerate the combined company’s growth via the delivery of pre-integrated avionics subsystems to an increasingly broad customer set.

We believe this transaction demonstrates several key trends in the aerospace and defense mergers and acquisitions (“M&A”) market:

  • Defense program modernization continues to be an area of significant interest for buyers given the evolving budgetary environment
  • Demand for companies with entrenched positioning on well-funded Programs of Record (“PoRs”) and trusted customer relationships remains strong
  • Ongoing M&A focus by strategic buyers on acquisition targets with advanced engineering capabilities, proprietary IP, SBIR-oriented technologies, and robust Research & Development capabilities
  • Public strategic buyers continue to aggressively deploy capital in order to accelerate organic growth strategies and gain access to PoRs and customers

 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

Mercury Systems to Acquire Physical Optics Corporation

  • Continues to scale Mercury’s global avionics & mission systems business
  • Complementary capabilities enhance position at forefront of military digital convergence
  • Expands platform and mission management content on new and existing airborne platforms
  • Broadens mission processing capabilities, adding data transfer and recording solutions
  • Leverages investments in embedded security and safety-certifiable avionics processing

ANDOVER, Mass., Dec. 07, 2020 (GLOBE NEWSWIRE) – Mercury Systems, Inc. (NASDAQ: MRCY, www.mrcy.com), a leader in trusted, secure mission-critical technologies for aerospace and defense, today announced that it has signed a definitive agreement to acquire Physical Optics Corporation (“POC”). Based in Torrance, Calif., POC is a leading designer, developer, and integrator of advanced technologies primarily focused on avionics & mission subsystems for defense applications.

Pursuant to the terms of the agreement, Mercury will acquire POC for an all-cash purchase price of $310 million, subject to net working capital and net debt adjustments. The acquisition and associated transaction expenses are expected to be funded through a combination of cash on hand and Mercury’s existing revolving credit facility.

POC is currently expected to generate revenue of over $120 million for its fiscal year ending December 31, 2020. The acquisition represents a multiple of approximately 13x next twelve months EBITDA and is expected to be immediately accretive to adjusted EPS.

“The acquisition of Physical Optics Corporation adds important capabilities on new and existing airborne programs in the platform and mission management market,” said Mark Aslett, Mercury’s president and chief executive officer. “The combination of Mercury’s safety-certifiable and secure avionics processing solutions with POC’s deep portfolio of data storage, transfer, and encryption technologies will enable us to deliver more complete, pre-integrated avionics subsystems to our customers. POC has a similar growth profile to Mercury, supported by several key design wins that are transitioning into production. We are very excited for POC to join the Mercury team.”

“This acquisition broadens our avionics product and technology portfolio to help our defense Prime customers, the U.S. Navy, Army and Air Force deploy next-generation open-architecture mission computing solutions,” added Amela Wilson, senior vice president, Mercury Mission. “Similar to Mercury, POC is well-positioned in faster-growing segments of the defense market and benefits from secular growth drivers, such as supply chain delayering. Together, Mercury and POC can provide customers new capabilities and subsystem solutions.”

Founded in 1985, POC employs approximately 350 people, including more than 160 highly skilled engineers, and holds over 160 patents worldwide, covering 60 technologies. They support mission-critical programs with common-use products spanning data transfer systems, flight data recorders, mission computers, high-definition data and video recorders, and advanced encryption devices. POC is well-positioned on a wide variety of key airborne and naval defense platforms that are experiencing increased funding for electronics modernization to specifically address digital convergence and combat near-peer threats in line with the National Defense Strategy.

The acquisition is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is currently expected to close during Mercury’s fiscal 2021 second quarter ending January 1, 2021.

Operating at the intersection of high-tech and defense, Mercury Systems is the leader in making trusted, secure mission-critical technologies profoundly more accessible. Our work is inspired by our Purpose of delivering Innovation That Matters by and for People Who Matter, to make the world a safer, more secure place for all. For more information, visit mrcy.com or contact Mercury at (866) 627-6951 or info@mrcy.com.

Mercury Systems – Innovation That Matters®

Mercury Systems is a leading technology company serving the aerospace and defense industry, positioned at the intersection of high-tech and defense. Headquartered in Andover, Mass., the Company delivers solutions that power a broad range of aerospace and defense programs, optimized for mission success in some of the most challenging and demanding environments. The Company envisions, creates and delivers innovative technology solutions purpose-built to meet customers’ most-pressing high-tech needs, including those specific to the defense community. To learn more, visit mrcy.com, or follow us on Twitter.

Forward-Looking Safe Harbor Statement

This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the acquisitions described herein and to fiscal 2021 business performance and beyond and the Company’s plans for growth and improvement in profitability and cash flow. You can identify these statements by the use of the words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of epidemics and pandemics such as COVID, effects of any U.S. federal government shutdown or extended continuing resolution, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. Government’s interpretation of, federal export control or procurement rules and regulations, market acceptance of the Company’s products, shortages in components, production delays or unanticipated expenses due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings, or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, increases in interest rates, changes to industrial security and cyber-security regulations and requirements, changes in tax rates or tax regulations, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended July 3, 2020. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

Mercury Systems and Innovation That Matters are registered trademarks of Mercury Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.

KippsDeSanto & Co. Advises Braxton Science & Technology Group, LLC on its sale to Parsons Corporation

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KippsDeSanto & Co. Advises Braxton Science & Technology Group, LLC on its sale to Parsons Corporation

KippsDeSanto & Co. is pleased to announce the sale of its client, Braxton Science & Technology Group, LLC (“Braxton” or the “Company”) to Parsons Corporation (NYSE: PSN).

Headquartered in Colorado Springs, CO, Braxton is a leading provider of command and control, data transport, and cybersecurity solutions that unify spacecraft ground control operations across the Department of Defense (“DoD”) and Intelligence Community (“IC”). Braxton leverages its broad, differentiated portfolio of integrated and cross-functional products and services to deliver comprehensive satellite system solutions, including ground system automation, communication, and flight dynamics. These advanced solutions provide Braxton’s customers with mission-critical support for all spacecraft ground control and spacecraft integration mission requirements. The Company has supported more than 100 spacecraft missions across all seven continents, developing significant space domain expertise and a robust track record providing solutions to a diverse set of customers across the DoD and IC.

The transaction complements Parsons Corporation’s space portfolio increases its product offerings in high-growth markets, and adds critical intellectual property that expands its capabilities for the U.S. Air Force, Space Force, and Space and Missile Command.

We believe this investment demonstrates several key trends in the current defense environment:

  • Space continues to be a highly coveted growth and M&A area given its importance to National Security and increasing budgetary trends
  • Significant demand for advanced, technology-centric, engineering solutions supported by Company-owned intellectual property
  • Strong focus on companies that have high barriers to entry, embedded positions within sought-after and hard-to-reach space and IC customers, and strong competitive differentiators within the rapidly evolving space system ecosystem (i.e., LEO communications constellations, small satellites, and space cyber resiliency)
  • Strategic buyers continue to seek acquisitions that unlock value and accelerate growth, particularly for assets that demonstrate substantial revenue visibility, protected intellectual property, and seasoned management teams

 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

Parsons to Acquire Braxton Science & Technology Group

Acquisition enhances Space and Cyber portfolio; Accretive to top and bottom line growth

CENTREVILLE, VA (Oct. 27, 2020) – Parsons Corporation (NYSE:PSN) announced today that it has entered into a definitive agreement to acquire Braxton Science & Technology Group, LLC (“Braxton”) and its subsidiaries for approximately $300 million in cash. The acquisition increases Parsons’ federal solutions, product and capabilities in the space and cyber markets.

Braxton’s broad portfolio of commercial off-the-shelf (COTS) products provide mission critical solutions including spacecraft ground control and spacecraft integration. Braxton has over 50 differentiated product offerings focused on space missions that are comprised of software and hardware products combined with advanced engineering services. Braxton’s industry leading product portfolio is built on a technology base of artificial intelligence leveraging machine learning, deep learning, and data analytics, and integrates advanced cybersecurity tool sets. The group will be integrated into Parsons’ space and geospatial solutions market, adding more than 370 employees, 80 percent of whom hold security clearances.

“The addition of Braxton complements our space portfolio, increases our product offerings in high-growth markets, and adds critical intellectual property that complements and expands our capabilities for the U.S. Air Force, Space Force, and Space and Missile Command,” said Chuck Harrington, Parsons’ chairman and chief executive officer. “We look forward to welcoming Braxton’s employees into the Parsons’ family, driving synergistic solutions that leverage our expanded set of space solutions, growing our technology and transactional revenues, and furthering our customer’s critical missions including joint all domain operations.”

Headquartered in Colorado Springs, Co., Braxton operates at the forefront of satellite operations, ground system automation, flight dynamics, and spacecraft and antenna simulation for the U.S. Department of Defense and Intelligence Community. These capabilities position Parsons to capitalize on the quickly evolving space missions of its national security space customers and address rapid market growth driven by proliferated low earth orbit (LEO) constellations, small satellite expansion, and space cyber resiliency. Braxton has specific domain expertise with the U.S. Air Force’s Enterprise Ground Services (EGS) effort: a next generation architecture that will unify spacecraft ground control operations across multiple major government agencies.

The transaction is consistent with Parsons’ strategy of acquiring high-growth, defense, and intelligence technology companies with software and hardware intellectual property that enhance its technology and transactional revenue growth and margin profile.

“The combination of Braxton’s leading defense capabilities, and decades of trusted customer relationships, combined with Parsons’ global scale, cross-industry experience, and disruptive mindset creates a leading space technology provider,” said Ken O’Neil, President of Braxton. “We’re excited to join an organization known for their entrepreneurial spirit, agility, culture of innovation and inclusivity, and successful track record of mergers, acquisitions, and integrations. Parsons is a large company with the operational agility of a smaller organization, which attracted us to them and gives us confidence in our future success together.”

The transaction is valued at approximately $258 million, including the net present value of a $42 million transaction-related tax benefit, or approximately 11x Braxton’s estimated 2021 adjusted EBITDA before considering any revenue or cost synergies. For 2021, Braxton is expected to generate revenue of approximately $133 million. The transaction is expected to be accretive to Parsons’ 2021 adjusted earnings per share and close in Q4 2020, subject to customary closing conditions. Parsons was advised by Goldman Sachs & Co LLC and Latham & Watkins LLP. Braxton was advised by KippsDeSanto & Co and Sparks Wilson, P.C.

About Parsons:

Parsons (NYSE: PSN) is a leading disruptive technology provider in the global defense, intelligence, and critical infrastructure markets, with capabilities across cybersecurity, missile defense, space, connected infrastructure, and smart cities. Please visit Parsons.com and follow us on LinkedIn and Facebook to learn how we’re making an impact.

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of our addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. federal government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our Registration Statement on Form S-1 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

KippsDeSanto & Co. Advises Alliance Spacesystems, a subsidiary of SolAero Technologies Corp., on its sale to Applied Composites

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KippsDeSanto & Co. advises Alliance Spacesystems, a subsidiary of SolAero Technologies Corp., on its sale to Applied Composites

KippsDeSanto & Co. is pleased to announce the divestiture of its client, Alliance Spacesystems (“Alliance” or the “Company”) from SolAero Technologies Corp. to Applied Composites, a portfolio company of AE Industrial Partners.

Headquartered in Los Alamitos, California, Alliance provides high-precision composite payload structures for use in satellite buses, antenna reflectors, booms, and support structures for use in both military and commercial satellite applications. As a qualified supplier for Boeing, Lockheed Martin, and Northrop Grumman, among others, the Company offers end-to-end composite manufacturing services, to include engineering, manufacturing, integration, and final qualification testing. The Company’s full suite of composite structure capabilities, state-of-the-art facilities in Los Alamitos and San Diego, and deep customer relationships uniquely position Alliance to complement Applied Composites existing capabilities and accelerate the combined company’s growth.

We believe this transaction demonstrates several key trends in the aerospace and defense M&A market:

  • Continued interest and investment in the space end market
  • Demand for companies with entrenched position on well-funded programs, and the customer relationships needed to maintain that positioning
  • Value creation through the realization of operational and production synergies
  • Sustained private equity M&A activity in essential industries despite COVID-19 and associated macroeconomic uncertainty

 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

Applied Composites Acquires Alliance Spacesystems, a Leading Provider of High-Performance Composite Structures for the Space Industry

Lake Forest, CA – September 2, 2020 —  Applied Composites Holdings, LLC (“Applied Composites”), announced today that it has acquired Alliance Spacesystems, LLC (“Alliance” or “the Company”), a leading, vertically integrated provider of high-performance composite structures and assemblies for the commercial, civil and government satellite market. Terms of the transaction were not disclosed.

This marks the fifth acquisition of the Applied Composites platform created by AE Industrial Partners, LP (“AEI”), a private equity firm specializing in Aerospace, Defense & Government Services, Power Generation, and Specialty Industrial markets.

Alliance offers a full spectrum of composite structure capabilities for the satellite industry, from engineering to manufacturing, integration and final qualification testing. The Company is a premier supplier of high-precision payload structures for satellite buses, antenna reflectors, booms and support structures used for a wide variety of military and commercial applications. Alliance is a qualified supplier for Boeing, Lockheed Martin, Northrop Grumman, and Ball Aerospace, among others. The Company also creates high-strength composite structures for launch vehicles, as well as produces high quality, affordable rigid composite solar array substrates. Alliance provides end-to-end composite manufacturing services through its state-of-the-art facilities in Los Alamitos and San Diego, California.

“We are excited to add Alliance, with its well-respected space heritage and its extensive line of composite products and services, to our growing company,” said David Horner, CEO of Applied Composites. “Interest and investment in the space industry is at an all-time high, and we look forward to working closely with the Alliance team as we look for ways to meet this growing demand and better serve our customers.”

“This is a highly strategic combination that significantly strengthens our market position and value proposition.”  said Rick Byrens, General Manager of Alliance.  “Together, we possess a unique set of capabilities and skills that will help us to accelerate our growth and continue to deliver the quality and complexity that our customers demand.”

“When we formed Applied Composites, our goal was to create a one-stop shop for complex composites, offering unparalleled products and services to the aerospace, defense and space industries,” said Kirk Konert, Partner at AE Industrial. “With the addition of Alliance, we have taken another step in building a uniquely diverse and vertically integrated composites platform.”

Kirkland & Ellis served as legal advisor and RSM served as financial advisor to Applied Composites. Blank Rome was the legal advisor and KippsDeSanto & Co. was the financial advisor to Alliance.

About Alliance

Headquartered in Los Alamitos, California, Alliance is a leading manufacturer and designer of high-performance composite structures for the space industry.  The Company’s derives its heritage from decades of producing demonstrated flight hardware, and experience in fabrication, assembly, and test of satellite structures. Alliance provides its end-to-end composite manufacturing services through its state-of-the-art facilities in Los Alamitos and San Diego. For more information, please visit https://alliancespacesystems.com/.

About Applied Composites

Applied Composites is a leading provider of complex composite components, assemblies, engineering, and tooling to the aerospace, defense, and space markets. Applied Composites was formed through AEI’s acquisitions of AC&A, Applied Composites Engineering (“ACE”), Applied Composite Structures (“ACS”), formerly known as EnCore Composite Structures, and San Diego Composites (“SDC”). Operating out of approximately 380,000 square feet across four facilities, Applied Composites is widely recognized as a leading supplier of advanced composite solutions for a diverse set of high growth aerospace, space and defense applications and platforms. For more information, please visit www.appliedcomposites.com/.

About AE Industrial Partners

AE Industrial Partners is a private equity firm specializing in Aerospace, Defense & Government Services, Power Generation, and Specialty Industrial markets. AE Industrial Partners invests in market-leading companies that can benefit from its deep industry knowledge, operating experience, and relationships throughout its target markets. Learn more at www.aeroequity.com.

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

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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.

KippsDeSanto & Co. Advises General Dynamics Mission Systems, a business unit of General Dynamics, on its sale to Communications & Power Industries

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KippsDeSanto & Co. Advises General Dynamics Mission Systems, a business unit of General Dynamics, on its sale to Communications & Power Industries a portfolio company of Odyssey Investment Partners, LLC

KippsDeSanto & Co. Advises Chemring Group PLC on the Sale of Chemring Ordnance, Inc. to Nammo Defence Systems Inc.

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KippsDeSanto & Co. Advises Chemring Group PLC on the Sale of Chemring Ordnance, Inc. to Nammo Defence Systems Inc.

KippsDeSanto & Co. is pleased to announce that it has advised on the sale of Chemring Ordnance, Inc. (“COR” or the “Company”), a subsidiary of CHG Group, Inc., to Nammo Defence Systems Inc.  The transaction expands Nammo’s customer access, while helping our client, Chemring Group PLC (LSE:CHG), pursue its strategic portfolio shaping initiatives.

Based in Perry, FL, COR manufactures a range of ordnance and pyrotechnic products primarily for the U.S. Department of Defense, as well as foreign defense agencies.  The Company’s flagship product is utilized for counter-Improvised Explosive Device (“IED”) requirements, allowing its operators to quickly and safely deploy a system to neutralize potential minefields and similar threats.  COR also produces a variety of ammunition products utilized in land and sea missions, along with fuzing for various grenade systems.  In addition to its suite of products, the Company offers ammunition design, testing, and load, assemble, and pack (“LAP”) services.  With its extensive product line and intimate customer relationships, the Company is favorably poised to accelerate its overall growth and development.  The transaction was originally announced on November 21, 2019; it closed on May 6, 2020, subsequent to regulatory requirements.

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

  • Continued use of divestitures for portfolio shaping in line with shifting strategic plans
  • Intrinsic value of entrenched customer relationships throughout the defense industrial base
  • Driving value through the ability to realize operational and production synergies

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 – May 07, 2020

Completion of disposal

On 21 November 2019 Chemring announced that it had entered into a conditional agreement to sell its US subsidiary Chemring Ordnance, Inc. to Nammo Defense Systems Inc. for a cash consideration of $17 million. The sale was subject to both regulatory approval by the US authorities and a working capital adjustment on completion.

Chemring is pleased to announce today that all regulatory approvals have now been received and the sale process has now completed.

The final working capital adjustment will be agreed in the next 60 days in accordance with the sale and purchase agreement, but at this stage, the net proceeds are expected to be approximately $15 million. These proceeds will be used by the Group for general corporate purposes.

 

KippsDeSanto & Co. advises FreeFlight Systems on its sale to ACR Group, a portfolio company of The Jordan Company

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KippsDeSanto & Co. advises FreeFlight Systems on its sale to ACR Group, a portfolio company of The Jordan Company

KippsDeSanto & Co. is pleased to announce the sale of its client, FreeFlight Systems (“FreeFlight” or the “Company”), to ACR Group (“ACR”), a portfolio company of The Jordan Company.

Headquartered in Irving, TX, FreeFlight is a leading provider of next generation avionics systems to global commercial and military aerospace customers.

Established in 2001, FreeFlight is at the forefront of the ongoing airspace transformation, providing a full suite of positioning, data collection, state-sensing, flight management, and air traffic management solutions and services.  FreeFlight’s customer base spans commercial airline, business aviation, and military / government users worldwide.

ACR’s portfolio of brands is known for high quality and performance and adding FreeFlight’s well-known and respected brand will help the companies realize substantial benefits from their respective technology team collaboration and customer / market access.

We believe this transaction highlights several key trends in the aerospace/defense M&A market:

  • Buyers are looking for proprietary, highly engineered, differentiated solutions
  • Cutting-edge IP and continued emphasis on R&D are critical for new systems development to exploit value in the midst of a holistic, global overhaul of legacy systems
  • Private equity continues to be an avid investor in the broader aerospace industry, looking to the middle market to implement buy and build strategies

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

FreeFlight Systems joins the ACR Group

February 24, 2020 – IRVING, Texas – NextGen avionics leader FreeFlight Systems announced today that the Company has joined the ACR Group’s portfolio of aviation companies which includes ARTEX, Flight Data Systems, Latitude Technologies, and SKYTRAC Systems.

“We’ve always made it our mission to make flying safer and more efficient with the highest-quality, longest-lasting, and most affordable products available,” said Tim Taylor, FreeFlight Systems’ President and CEO. “Both companies share common values and goals, with focuses on safety, product performance, and client satisfaction, and together we will continue to lead the industry in the development of critical technologies that supports the aviation industry.”

Headquartered in Irving, Texas, FreeFlight Systems is a leader in providing high-performance, safety of life technologies and solutions that bring the NextGen airspace transformation to all segments of aerospace. The Company will continue to operate as an independent subsidiary, retaining the existing leadership, products, brand, locations, engineering capabilities, and sales team.

Together the aviation division of the ACR Group provides every segment of the aviation market with high value solutions including Emergency Locator Transmitters (ELTs), Flight Data Recorders, Global Aeronautical Distress and Safety Systems (GADSS), Automatic Dependent Surveillance Broadcast (ADS-B), Flight Management Systems (FMS), Monitoring, and Data Acquisition including Flight Tracking and Messaging.

Financial terms of the acquisition will not be released.

For more information on the FreeFlight Systems suite of avionics solutions, visit our product page. For more information on The ACR Group and other safety equipment, visit ACRARTEX.com.

About FreeFlight Systems

FreeFlight Systems designs and manufactures high-performance avionics for flight safety. These solutions deliver substantial safety, cost, environmental, and other benefits from the NextGen airspace transformation. Founded in 2001 and based in Texas, the company pioneered the first certified aviation WAAS/GPS receiver and the first rule-compliant UAT ADS-B system. FreeFlight Systems produces a range of high quality, American-made, competitively priced systems for installation in all aircraft types.

About the ACR Group

The ACR Group is the leading innovator of satellite-based tracking, data communications, and emergency location products & services used across aviation, marine, and land environments. The ACR Group portfolio of companies includes ACR Electronics, ARTEX, Skytrac, Latitude Technologies, Flight Data Systems, NAL Research, Ocean Signal and United Moulders (UML).

KippsDeSanto & Co. advises BEI Precision Systems & Space Company on its acquisition of Wenzel Associates, Inc.

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KippsDeSanto & Co. advises BEI Precision Systems & Space Company on its acquisition of Wenzel Associates, Inc.

KippsDeSanto & Co. is pleased to announce the acquisition of Wenzel Associates, Inc., by our client, BEI Precision Systems & Space Company, Inc. (“BEI Precision”), a portfolio company of J.F. Lehman & Company (“JFLCO”).

Headquartered in Austin, Texas, Wenzel is at the forefront in the design and manufacture of crystal oscillators, fixed frequency systems, integrated microwave assemblies, and synthesizers for military, space, and commercial applications.  This marks the second acquisition BEI Precision has made since it was acquired by JFLCO in April 2017, and further solidifies BEI Precision’s robust portfolio of high-end positioning sensor solutions.

Similar to BEI Precision, Wenzel products are differentiated via their ability to provide the highest performance (e.g., lowest phase noise) reliably in extreme environments. Wenzel’s oscillators are key components on numerous military and space platforms, typically on a sole source basis. Notable examples of Wenzel’s past work include providing space-flight hardware for the Lunar Reconnaissance Orbiter for NASA, as well as oscillators for the Mars Pathfinder Lander and the National Polar-orbiting Operational Environmental Satellite System (“NPOESS”).  Currently, Wenzel is engaged to supply oscillators for numerous radar and electronic warfare systems found on high-profile aviation, land and naval platforms. BEI Precision intends to leverage Wenzel’s position on these noteworthy programs to further penetrate existing and tangential customer opportunities.  The acquisition of Wenzel further deepens BEI Precision’s existing base of high-end engineering talent, along with offering additional manufacturing and testing capabilities in Austin.

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.

Press Release

BEI Precision Announces Acquisition of Wenzel Associates, Inc.

October 23, 2019

NEW YORK – BEI Precision Systems & Space Company, Inc. (“BEI Precision”), a portfolio company of investment affiliates of J.F. Lehman & Company (“JFLCO”), announced today the recent acquisition of Wenzel Associates, Inc. (“Wenzel”).

Headquartered in Austin, Texas, Wenzel is a leading designer and manufacturer of crystal oscillators, fixed frequency systems, integrated microwave assemblies and synthesizers for military, space and commercial markets. Since 1978, Wenzel has defined the state-of-the-art in ultra-low phase noise crystal oscillators, manufacturing products that are capable of highly reliable and precise performance in extreme environments. Wenzel is supported by its Croven Crystals division in Whitby, Ontario, which supplies precision quartz resonators with extremely low noise and low sensitivity to vibration. Wenzel is the second add-on acquisition completed by BEI Precision under JFLCO’s sponsorship.

BEI Precision is a leader in high-accuracy positioning sensor technologies, providing advanced design, manufacturing and testing for reliable and resilient products and systems. BEI Precision’s core product lines, which are used primarily in mission-critical defense and space applications, include optical encoder-based and resolver-based positioning systems, scanners for situational awareness requirements and precision accelerometers. BEI Precision is headquartered in Maumelle, Arkansas with an operating subsidiary in Edinburgh, Scotland, and has a longstanding track record of technological innovation, with corporate roots dating back to 1862.

Mark Mirelez, Chief Executive Officer of BEI Precision, commented, “Our partnership with Wenzel will further strengthen both organizations’ abilities to meet the unique and evolving requirements of our customers, particularly in the space and military markets.”

“The Wenzel acquisition further enhances BEI Precision’s reputation as a provider of the highest-performance advanced sensing and positioning solutions for critical applications,” said Steve Brooks, Partner at JFLCO. “We are excited to welcome Wenzel and its strong engineering-focused culture to the BEI Precision platform,” added Will Hanenberg, Principal at JFLCO.

KippsDeSanto & Co. served as financial advisor to BEI Precision and JFLCO, and Jones Day (lead counsel) and Baker Hostetler (international trade, government contracts and defense security compliance matters) provided legal counsel. Sperry, Mitchell & Company served as financial advisor to Wenzel while McGinnis Lockridge were Wenzel’s legal representatives for the transaction.

KippsDeSanto & Co. Advises McNally Industries, LLC, a portfolio company of Gardner Standard LLC, on its sale to Susquehanna Private Capital, LLC

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KippsDeSanto & Co. Advises McNally Industries, LLC, a portfolio company of Gardner Standard LLC, on its sale to Susquehanna Private Capital, LLC

KippsDeSanto & Co. is pleased to announce the sale of McNally Industries, LLC (“McNally” or the “Company”), a portfolio company of Gardner Standard LLC, to Susquehanna Private Capital, LLC.

Headquartered in Grantsburg, WI, McNally is a leading provider of advanced design engineering, complex test and assembly, and precision machining and manufacturing for mission-critical applications, primarily supporting both new and legacy platforms for the aerospace & defense and midstream oil & gas markets.  The Company’s full-service offerings range from initial product design and manufacturing to final testing and after-market support.  Deep engineering capabilities, including reverse engineering and technical data package development, have created significant competitive advantages and high barriers to entry.  Additionally, this expertise has enabled McNally to establish sole-source / single-source positioning on various highly-visible and well-funded Programs of Record (“PoR”) and to develop proprietary products.  McNally has an established history supporting various Department of Defense (“DoD”) customers with missions across land, air, and sea.  Supported programs include the Bradley Fighting Vehicle; Apache, Blackhawk, and Chinook helicopters; and DDG-51 destroyers.

Well-positioned in the growing defense and energy end markets, McNally maintains strong relationships with a strategically diversified portfolio of government end users, key system integrators and defense primes, as well as commercial oil & gas customers.  Continued investments in new machinery and equipment coupled with an emphasis on cultivating engineering talent with relevant industry certifications, educational backgrounds, and requisite security clearances has allowed McNally to succeed and drive continued growth.

We believe this investment demonstrates several key trends in the aerospace and defense M&A environment:

  • Demand for companies with entrenched and defensible positions on PoRs and key enduring programs which provide significant revenue visibility and backlog;
  • Significant value placed on companies with single / sole-source status given high barriers to entry created by differentiated capabilities portfolios and proprietary solutions;
  • Interest in customer footprint diversified across government users, defense primes, and commercial players;
  • Private equity firms remain active; buyers look to acquire new platforms in well-funded and defensible markets.

 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.

Press Release

MCNALLY INDUSTRIES, LLC PARTNERS WITH SUSQUEHANNA PRIVATE CAPITAL, LLC

BALA CYNWYD, PA – (September 9, 2019) — Susquehanna Private Capital, LLC (“SPC”), a middle market investment firm and member of the Susquehanna International Group of Companies (“SIG”), is pleased to announce its investment in McNally Industries, LLC (“McNally”), a precision systems manufacturer to defense and industrial markets based in Grantsburg, Wisconsin.

McNally has an established history supporting various U.S. Department of Defense customers with missions across land, air, and sea. Supported programs include Ground Combat Vehicles, including Bradley, Paladin and the Army’s new Armored Multi-Purpose Vehicle, Army Rotary Wing Aircraft, including Blackhawk, Apache and Chinook, the Navy’s fleet of DDG-51 destroyers as well as the Army’s 120mm, 81mm and 60mm Mortar Weapons Systems.

“We are excited to partner with McNally’s management team during the next phase of the Company’s growth” said Kyle Squillario, Director at SPC. “The Company’s impressive manufacturing operations coupled with its advanced engineering and design capabilities serve as clear differentiators at a time when the industry is demanding more from its suppliers.”

McNally recently built a new 17,500 square foot assembly and test facility at its Grantsburg, Wisconsin campus to better accommodate the significant growth the Company is experiencing. “The McNally team is very excited to partner with SPC and the strength they bring to continue advancing the Company’s growth,” said Jim Segelstrom, CEO of McNally.

As part of the transaction, SPC has already made significant capital investments in the latest automated manufacturing technology so the Company can better meet increased customer demand for McNally’s products and services. “We believe McNally’s focus on legacy systems and aftermarket components to the defense industry align well with the U.S. Department of Defense’s stated goals and objectives” said Leo Helmers, Co-Founder and Group Head of SPC. “We look forward to partnering with management and investing in the business to enhance the Company’s capabilities, market position, and quality of service.”

KippsDeSanto & Co. served as the financial advisor to Gardner Standard. As part of the transaction, Gardner Standard will retain a minority position in McNally.

About McNally Industries

Founded in 1942 and headquartered in Grantsburg, Wisconsin, McNally provides advanced design engineering, complex test and assembly, and precision machining and manufacturing for mission-critical applications, primarily supporting both new and legacy platforms for the aerospace & defense and midstream oil & gas markets. The Company’s full-service offerings range from initial product design and manufacturing to final testing and aftermarket support, including reverse engineering and technical data package development. The Company works with leading blue-chip clients that serve the U.S. Department of Defense and midstream oil & gas end markets. For more information, please visit www.mcnally-industries.com.

About Susquehanna Private Capital

SPC is an affiliate of Susquehanna International Group, LLP (“SIG”), one of the world’s largest privately-held financial services firms. SPC makes majority and minority investments in domestic, middle market companies across a variety of industries, including: aerospace, defense & government, business services, healthcare, and industrials. The firm is backed by a unique and patient capital base that gives management teams the freedom and flexibility to pursue business plans that maximize long-term value creation. For more information, please visit www.spcllc.com.

KippsDeSanto & Co. advises Chemring Group PLC on the Sale of Chemring Military Products to Global Ordnance

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KippsDeSanto & Co. advises Chemring Group PLC on the Sale of Chemring Military Products to Global Ordnance

KippsDeSanto & Co. is pleased to announce that it has advised on the sale of Chemring Military Products (“CMP” or the “Company”), a subsidiary of CHG Group, Inc., to Global Ordnance. The transaction expands Global Ordnance’s customer access, while helping our client, Chemring Group PLC (LSE:CHG), pursue its strategic initiatives of reshaping its defense and security portfolio.

Based in Perry, FL, CMP is one of the largest suppliers of non-standard ammunition and ordnance to the U.S. Government and allied militaries.  The Company has direct access to ammunition and weapon systems, including small, medium, and large caliber direct and indirect fire systems.  The Company also supplies law enforcement personnel with high-quality and competitively priced ammunition, pyrotechnics, and weapons systems.  CMP partners with domestic and international customers and utilizes its core competencies in supply chain and program management, quality assurance, and logistics to deliver best-value solutions.

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

  • Continued use of divestitures for portfolio shaping in line with shifting strategic plans
  • Intrinsic value of entrenched customer relationships throughout the defense industrial base
  • Driving value through the ability to realize operational and production synergies

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.

PRESS RELEASE

Global Ordnance Acquires Chemring Military Products Inc.

SARASOTA, Fla., April 5, 2019 /PRNewswire/ — Global Ordnance LLC (“Global Ordnance”) announced it has completed the acquisition (“Acquisition”) of Chemring Military Products Inc. (“CMP”), a subsidiary company of Chemring Group PLC.

Global Ordnance is a veteran-owned small business that responds to the needs arising from critical missions of the US Government and its allies around the world. Since its inception in 2013, Global Ordnance has earned a reputation as a trusted and reliable partner of its customers, to include the US Special Operations Command and the US Army.

CMP procures and delivers worldwide US-standard and non-standard ammunition and weapons systems.  In FY2018, CMP generated revenues exceeding $111M with an operating profit of $10.5M.

Both Global Ordnance and CMP have been long-time suppliers of non-standard ammunition (NSA) and non-standard weapons (NSW) to US and foreign government entities. Today’s acquisition of CMP by Global Ordnance marks the synergy of two well-established organizations with complementary strengths and expertise. By absorbing the staff and contracts of CMP into its organization, Global Ordnance aims to improve its already stellar reputation as a reliable and dependable US Government business partner and a leading supplier of NSA and NSW. On a larger scale as a result of this purchase, the focus for Global Ordnance going forward remains on providing unmatched service and products to its current customers.

While today’s Acquisition magnifies the depth and breadth of an already strong NSA/NSW team and places Global Ordnance atop the NSA/NSW partner spectrum, it also allows Global Ordnance to broaden the extent of activities in the commercial space which the company entered in earnest within the last two years. Since then, Global Ordnance has become an exclusive US distributor of already established brands, such as Grand Power of Slovakia and Australian Outback Ammunition of Australia. The company plans to continue growing its presence and strengthening its competitive impact in the commercial US market.

For more information about defense sales, visit www.global-ordnance.com or inquire at info@global-ordnance.com.  For additional details regarding commercial sales, visit www.globalordnance.com or inquire at info@globalordnance.com.

Contact – Marc Morales, 941-896-2251, info@global-ordnance.com