KippsDeSanto & Co. advises BEI Precision Systems & Space Company, Inc., a portfolio company of J.F. Lehman & Company, on its sale to Quantic Electronics, a portfolio company of Arcline Investment Management
KippsDeSanto & Co. is pleased to announce the sale of BEI Precision Systems & Space Company, Inc. (“BEI Precision” or the “Company”), a portfolio company of its client J.F. Lehman & Company, to Quantic Electronics, a portfolio company of Arcline Investment Management.
Headquartered in Maumelle, AR, BEI Precision designs and manufactures the highest performing and most resilient and reliable position feedback sensors and frequency reference technologies for mission-critical space, land, air, and sea applications. BEI Precision has a diverse portfolio of proprietary technologies, including state-of-the-art space encoders, crystal oscillators, and other military sensors.
The Company has built a robust portfolio of sole-sourced, long-term contracts in partnership with key prime partners and government end customers. As a result, BEI Precision’s products are designed into a number of classified efforts as well as other high priority programs across space and defense. BEI Precision also has a growing footprint within the high growth and emerging commercial space market which it addresses with its proprietary encoder and oscillator product offerings. The Company’s established presence across numerous well-funded and strategically important market segments positions it well for continued growth in the future.
We believe this transaction highlights several key trends in the M&A market:
- Space remains a highly coveted market segment because of its importance to National Security objectives
- Strong preference for defense and space companies with technically differentiated, proprietary products and embedded positions on sought-after programs
- Sponsors continue to seek acquisitions with accomplished management teams, strong revenue and earnings visibility, and highly actionable growth levers
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.
J.F. Lehman & Company Completes Sale of BEI Precision
NEW YORK – J.F. Lehman & Company (“JFLCO”), a leading middle-market private equity firm focused exclusively on the defense, aerospace, maritime, government and environmental industries, announced today that investment affiliates have sold BEI Precision Systems & Space Company, Inc. (“BEI Precision” or the “Company”) to Quantic Corporate Holdings, Inc. (“Quantic Electronics”), a portfolio company of Arcline Investment Management. Terms of the transaction were not disclosed.
BEI Precision designs, engineers, and manufactures highly accurate, resilient, and reliable position feedback sensors and frequency reference technologies for mission-critical space, land, air, and sea applications. Headquartered in Maumelle, AR, the Company’s products are designed into many of the U.S. government’s highest priority, long-life programs.
Since acquiring BEI Precision in 2017, JFLCO worked closely with management to successfully identify and integrate two strategic acquisitions, overhaul the Company’s R&D and business development functions, and optimize manufacturing operations. In turn, the Company has developed and delivered industry-leading products for numerous programs of national significance, resulting in substantial revenue and earnings growth.
“Our successful partnership with management has enabled BEI Precision to transform from a small, stable business unit of a larger corporate parent into a standalone, high-growth enterprise with state-of-the art products occupying sole-source positions on high priority space, electronic warfare and radar programs,” said Steve Brooks, Chairman of BEI Precision’s Board of Directors and Partner at JFLCO.
Mark Mirelez, President and Chief Executive Officer of BEI Precision, commented, “Today’s milestone is a validation of the market leading position, operational excellence, and culture that we have worked tirelessly to achieve. We are immensely grateful for JFLCO’s support and look forward to continuing to deliver on future growth opportunities with our new partners at Quantic Electronics.”
“We are extremely proud of the accomplishments Mark and his team achieved during our ownership,” added Will Hanenberg, a member of BEI Precision’s Board of Directors and Managing Director at JFLCO. “As a result of their efforts, BEI Precision is uniquely-suited to address the dynamic requirements of its demanding space and military customers, and we believe Quantic Electronics is the ideal partner to help guide the Company through the next phase of its growth.”
KippsDeSanto & Co. served as exclusive financial advisor to JFLCO and Jones Day served as lead legal counsel. BakerHostetler provided legal support related to international trade, government contracts, and defense security compliance matters.
Quantic™ Electronics Acquires BEI Precision
Maumelle, AR, August 17, 2021 — Quantic™ Electronics (“Quantic”), a portfolio company of Arcline Investment Management (“Arcline”), today announced the acquisition of BEI Precision (“BEI”) from J.F. Lehman & Company. BEI designs, engineers, and manufactures highly accurate, resilient, and reliable position feedback sensors and frequency reference technologies for mission-critical space, land, air, and sea applications. The Company’s products are designed into many of the U.S. government’s highest priority, long-life programs.
“Our strategy is to acquire world-class, mission-critical-electronic component manufacturers with significant long-term growth potential. BEI’s technology, products, and people fit perfectly with this strategy,” said Kevin Perhamus, President and CEO of Quantic Electronics. “This acquisition further establishes Quantic as a leading supplier of critical components for space, aerospace, and defense applications. BEI brings more than 60 years of experience designing and manufacturing proprietary optical encoders, scanners, accelerometers, and frequency products. We’re excited to partner with the BEI team to continue building upon this heritage to offer new and exciting products for our shared customers.”
Mark Mirelez, President and Chief Executive Officer of BEI Precision, commented, “Today’s milestone is a validation of the market leading position, operational excellence, and culture that we have worked tirelessly to achieve. We look forward to continuing to deliver on future growth opportunities with our new partners at Quantic Electronics.”
Evercore served as financial advisor to Quantic.
About Quantic Electronics
Quantic is an electronic component company focused on defining and delivering the future of mission-critical electronics. We have over a century of combined experience as reliable problem-solvers and trusted partners in military, aerospace, industrial and commercial markets. www.quanticnow.com.
About Arcline Investment Management
Arcline is a growth-oriented private equity firm that seeks to invest in thriving middle market businesses with structurally recurring revenue streams in high value industries. Arcline’s differentiated investment strategy combines deep business model expertise, proactive thematic research, an unrelenting focus on the upside and a collaborative, management-first approach to value creation. The firm’s primary sectors of interest include defense, aerospace, critical infrastructure services, industrial & biopharmaceutical technology, life sciences and specialty materials. Launched in 2019, Arcline currently has $4.3 billion in cumulative capital commitments. The firm’s more than 35 professionals are predominantly based in New York and San Francisco. For more information about Arcline’s investment philosophy and values, visit www.arcline.com.