Arcline Investment Management has completed its take private of publicly traded Kaman, a diversified aerospace and industrial company, at an enterprise valuation of $1.8 billion.
Kaman’s aerospace segment manufactures and provides helicopter, fixed wing, and UAV products including landing gear struts, wheels, and brakes; rotor blades; precision ball bearings; actuators and control systems for flight control surfaces and landing gears; fuselage, wing and tail components; and hydraulic and pneumatic hoses, tubing, and connectors. The aerospace segment also provides maintenance, repair, and overhaul (MRO) services for military and commercial aircraft.
Within its industrial segment, Kaman provides motion control products including sensors, controls, and motion control systems; connectors, switches, and sensors; conveyors, hoists, and lifting equipment; and pumps, valves, and actuators.
Kaman was founded in 1945 by aviation pioneer Charles Kaman and during its first ten years the company operated exclusively as a designer and manufacturer of helicopters that set records in performance and altitude and achieved many other aviation firsts. In 1956, Kaman began to diversify as an aerospace subcontractor with customers that included McDonnell Douglas, Grumman, and others. Today, the company is headquartered near Hartford in Bloomfield, Connecticut.
TTM financial results for Kaman through December 31, 2023, were $769 million in revenue and $101 million in EBITDA. Based on the $1.8 billion purchase price this equates to an EBITDA valuation multiple of 17.8x.
“We are thrilled to announce the completion of this value-maximizing transaction with Arcline and are proud to have delivered an outcome that is in the best interest of our shareholders, employees and customers,” said Ian Walsh, the chairman, president and chief executive officer of Kaman. “As we enter our next phase as a private company, we are confident that we will benefit from additional resources and expertise that will enable us to build upon our strong foundation and take full advantage of the hard work we have done these past several years to reposition our company. This new partnership will accelerate our transformational strategy and drive significant growth, innovation and value to our customers.”
“Kaman is an innovation-driven industry leader with a storied history and a strong portfolio of businesses supporting mission-critical end markets,” said Arcline in a released statement. “We look forward to partnering with the Kaman team and supporting the company’s continued success and growth as a trusted solutions provider of engineered components and subsystems to critically important programs.”
Arcline makes control investments in companies with recurring revenue business models in the defense and aerospace; infrastructure services; industrial and medical technology; life sciences and specialty materials sectors.
Arcline’s targets will typically have from $10 million to $100 million of EBITDA and enterprise values up to $1 billion. The firm closed its third fund in March 2023 with total capital commitments of $4.5 billion. Arcline’s earlier fund closed in January 2021 with $2.75 billion of capital commitments.
J.P. Morgan Securities was the financial advisor to Kaman and Morgan Stanley & Co. was the financial advisor to Arcline.
© 2024 Private Equity Professional | April 23, 2024
