KippsDeSanto & Co. advises Systron Donner Inertial, Inc. on its Sale to Investment Affiliates of Resilience Capital Partners

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KippsDeSanto & Co. advises Systron Donner Inertial, Inc. on its Sale to Investment Affiliates of Resilience Capital Partners

KippsDeSanto & Co. is pleased to announce the sale of its client, Systron Donner Inertial, Inc. (“SDI” or the “Company”), a portfolio company of The Carlyle Group, PAI Partners, and Schneider Electric, to investment affiliates of Resilience Capital Partners.

Headquartered in Concord, CA, SDI is a leader in the inertial sensors industry, with considerable domain expertise in the design and development of high performance, precision, quartz microelectromechanical systems (“QMEMS”). SDI’s QMEMS are utilized in guidance, navigation, control, and stabilization applications for various aircraft, unmanned autonomous vehicles, land vehicles, and precision guided weapons. QMEMS provides clear, continuously improving size, weight, power and cost (“SWaP-C”) advantages over alternative technologies. The Company’s product portfolio, anchored by its flagship SDI500 inertial sensor, includes a range of highly accurate, reliable, and resilient instruments used in many notable strategic platforms, including the Boeing 777x, MK48 / MK54 torpedoes, business jets, and military aviation and guided munitions programs.

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

  • Companies holding single-source status on well-funded, mission-critical Programs of Record and enduring commercial platforms create compelling strategic interest as acquisition targets
  • Significant value continues to be derived from companies with deeply-embedded relationships with key aerospace and defense customers, especially those aligned with favorable budget forecasts
  • Private equity buyers remain actively focused on acquiring high-end design and manufacturing capabilities built on a foundation of proprietary processes and trade secrets

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

Resilience Capital Partners Announces Acquisition of Systron Donner Inertial

March 26, 2019

CLEVELAND–(BUSINESS WIRE)–Resilience Capital Partners, a private equity firm that invests in middle-market companies, announced it has acquired Concord, California-headquartered Systron Donner Inertial. As the world’s leading supplier of quartz microelectromechanical systems (QMEMS) used in inertial sensing products that provide precision guidance, navigation and locational solutions, Systron Donner develops products that have been used in everything from business aircraft to fighter jets to the MARS Rover.

“Systron Donner is an important player in an industry that is critical to America’s future economic prosperity, leadership in aviation and national security,” said Steven H. Rosen, co-chief executive officer of Resilience Capital Partners. “Technology and innovation leadership is important for our nation’s future, and Systron Donner has been at the forefront of developing high-performing, made-in-America inertial sensors and systems for more than 50 years.”

Systron Donner’s QMEMS technologies are used in gyroscopes, accelerometers, inertial measurement units and inertial navigation system/GPS products that provide highly precise and reliable stabilization, geo-location, guidance, navigation and flight control solutions for aerospace, marine and land vehicles and systems.

Among the leading users of Systron Donner products are a leading defense contractor; a premier aerospace company; a civil and defense aerospace manufacturer; a leader in helicopter production; and a naval research agency. Systron Donner’s customers have frequently honored it for superior performance; in 2018, the firm received a leading defense contractor’s Supplier Excellence Award for the second consecutive time.

The future for such sensing products is highly promising. The market for inertial navigation systems alone is projected to grow from $9.54 billion in 2017 to $12.26 billion by 2022, a compound annual growth rate of 5.15 percent, according to an analysis by the business forecasting firm ResearchAndMarkets.

“Systron Donner’s proprietary technologies, the increasing size of the inertial sensing market and the company’s long history of relationships with a roster of blue-chip customers make this a company with strong potential,” said Rosen. “We look forward to working with the Systron Donner team to maximize this opportunity.”

The continued domestic development and manufacture of products for the aerospace and defense industries is seen as vital, given fears that a decline in American technology leadership could impair national security. Recent analyses, including a whitepaper authored by experts from the Institute for National Strategic Studies and a study prepared by a team assembled by the Office of the Director of National Intelligence and the U.S. Department of Homeland Security, have underscored these concerns.

An explanatory video about Systron Donner’s products is available on YouTube at https://youtu.be/6f1upekJbvE.

Terms of the transaction were not disclosed.