Sponsored by TCI International Inc.
10 June 21. Houlihan Lokey is pleased to announce that Primus Aerospace has been acquired by an affiliate of Angeles Equity Partners, LLC. The transaction closed on June 4, 2021. Founded in 1998, Primus Aerospace is a manufacturer of complex precision components and integrated assemblies for the aerospace, defense, and space sectors. Primus Aerospace offers focused value-added services, including engineering design support, component manufacturing, assembly and integration, and complete build-to-print program management. The company’s proficiency with exotic and hard metals has enabled it to manufacture high-complexity, tight-tolerance parts and subassemblies for Boeing, General Dynamics, L3Harris, Lockheed Martin, Northrop Grumman, Raytheon, and other leading OEMs. Primus Aerospace supports programs of the highest priority for national security, including hypersonics, heavy space launch, low Earth orbit satellite communications, and other high-priority defense programs.
Angeles Equity Partners, LLC, is a private equity firm that specifically targets industrial businesses that can directly benefit from the firm’s strategic, operational, and M&A capabilities.
Houlihan Lokey served as the exclusive financial advisor to Primus Aerospace. Houlihan Lokey’s Aerospace, Defense & Government (ADG) practice within the global Industrials Group is a leading M&A advisor to aerospace, defense, and government services companies. Since the beginning of 2020, the team has closed more than 25 transactions worth nearly $5.6bn in enterprise value. With a staff of approximately 30 investment bankers in Washington, D.C., London, and Los Angeles, Houlihan Lokey’s ADG practice is among the largest dedicated industry banking groups worldwide. In 2020, the Industrials Group was once again ranked as the No. 1 M&A advisor for all U.S. industrial transactions, according to Refinitiv.
If you would like more information about Houlihan Lokey or have any questions regarding this transaction, please contact one of the team members listed below.
09 June 21. Red Cat Structures Drone Business into Enterprise and Consumer Segments. Newly appointed COO launches plan to sharpen focus on core opportunities. Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or the “Company”), a hardware enabled software provider to the drone industry, announced that it was establishing Enterprise and Consumer segments in order to sharpen the Company’s focus on the unique opportunities in each sector of the drone industry. This development represents the first action taken by the Company’s newly appointed Chief Operating Officer, Dr. Allan Evans.
The Enterprise Segment will focus on developing a software driven, hardware enabled platform of services and solutions to commercial enterprises. Drones enable businesses to complete many tasks and solve business problems more efficiently, quicker, and at a lower cost than traditional methods. The Company’s Skypersonic and Dronebox subsidiaries will operate in this segment.
The Consumer Segment will focus on selling drones and related parts to enthusiasts and hobbyists which will continue growing as drones become more visible in our daily lives. The Company’s Fat Shark and Rotor Riot subsidiaries will operate in this segment.
“The Company has grown dramatically over the past year, and I want our teams and technologies focused on leveraging and accelerating their respective opportunities” stated Dr. Evans. “Enterprise is building the infrastructure to manage drone fleets, fly and provide services remotely, and navigate confined interior spaces. Consumer provides a growing revenue base, strong brand visibility for the Company, and is an excellent source of professional pilots.”
About Red Cat Holdings, Inc.
Red Cat provides products, services and solutions to the drone industry through its four wholly owned subsidiaries. Fat Shark Holdings is the leading provider of First Person View (FPV) video goggles to the drone industry. Rotor Riot, LLC is a leader in the sale of FPV drones and equipment, primarily to the consumer marketplace through its digital storefront located at www.rotorriot.com. Rotor Riot enjoys high visibility in social media through its Facebook page and its sponsorship of a professional drone racing team which has won numerous championships. Skypersonic provides software and hardware solutions that enable drones to complete inspection services in locations where GPS is not available, yet still record and transmit data even while being operated from thousands of miles away. Dronebox is developing a Software-as-a-Solution (“SaaS”) platform to provide drone flight data analytics and storage, as well as diagnostic products and services. Learn more at https://www.redcatholdings.com/. (Source: PR Newswire)
09 June 21. Ace Capital Partners Launches Spain-focused Aerospace and Defence Private Equity Fund With SEPI, Airbus, Indra and Tikehau Capital as Investors and Strategic Partners.
- SEPI, Airbus, Indra and Tikehau Capital will invest in a newly-launched private equity aerospace and defence Spanish fund managed by Ace: “Ace Aerofondo IV F.C.R.”, as Strategic Partners
- The initiative is sponsored by SEPI, the investment arm of the Spanish government, Airbus, the leading global player in aerospace and defence and Indra, key technological partner in defence
- Ace will draw on the expertise and knowledge of Airbus, Indra and SEPI through the creation of a Strategic Committee – to provide Ace with intelligence on sector trends, opportunities and risks
Ace Capital Partners, a private equity firm specialised in strategic industries and technologies and subsidiary of Tikehau Capital (Paris:TKO), announces today the launch of Ace Aerofondo IV F.C.R., with SEPI, Airbus, Indra and Tikehau Capital as investors. This new private equity fund will invest in lower and upper midmarket companies active in the Spanish aerospace and defence sector.
Ace Capital Partners will act as manager of the fund, which will invest in both Support Capital (niche players with the ability to grow organically) and Platform Capital (consolidation platforms to become leaders in their markets through external growth) strategies. Ace is currently investing its 4th vintage of aerospace and defence funds, with a focus on Western Europe and with France and Spain as its core markets. Ace invests in strategic industries and technologies, applying a sector-focused approach and providing strategic and operational support to its portfolio companies. Ace seeks to grow intrinsic value of its investments through engagement over the long term. Ace Aerofondo IV will replicate this approach as it benefits from the recovery of the aerospace and defence sector in the wake of the Covid-19 crisis.
A first closing for €100 m of initial commitments will take place in June 2021. Tikehau Capital and SEPI have both invested €33.3m along with the two other Strategic Partners, Airbus and Indra, which have invested €28.3m and €5.0m respectively. The target size is €150-200m. The fund follows the longstanding model of Tikehau Capital, whereby the group invests its own capital in the funds managed by its group entities, to ensure a full alignment of interests between the firm and its investors.
Marwan Lahoud, Executive Chairman of Ace Capital Partners, declared: “The aerospace sector will recover from this crisis. We remain unwavering in our commitment to the sector as it navigates the post-Covid era and we are pleased to manage this fund which is perfectly in line with our objective to protect, strengthen and secure this key industry for Spain, with SEPI, Airbus and Indra as sponsors as well as Tikehau Capital.”
Carmen Alonso, head of Iberia and UK for Tikehau Capital added: “Tikehau Capital is committed to helping the aerospace sector in Spain. We are delighted to partner with SEPI, Airbus and Indra to contribute to the recovery of the sector and ensure the technological competitiveness and strategic importance of the Spanish aerospace and defence sector.”
About Ace Capital Partners
Ace Capital Partners, a subsidiary of Tikehau Capital, is a private equity firm specialised in strategic industries and technologies, with more than €1bn in assets under management. Founded in 2000, Ace invests with a vertical approach in strategic industries (e.g. Aerospace, Defense and technologies (e.g. Cybersecurity). Ace has built its model on strategic partnerships with large corporates (including Airbus, Safran, Dassault Aviation, Thales, EDF, Naval Group, and Sopra Steria), which invest in its funds and maintain an ongoing dialogue with the firm, enabling Ace to take a differentiated approach to investing.
Ace is present in Paris, Toulouse and Montreal and benefits from the worldwide presence of Tikehau Capital. www.ace-cp.com
About Tikehau Capital
Tikehau Capital is a global alternative asset management group with €29.4 bn of assets under management (at 31 March 2021). Tikehau Capital has developed a wide range of expertise across four asset classes (private debt, real assets, private equity and capital markets strategies) as well as multi-asset and special opportunities strategies. Tikehau Capital is a founder-led team with a differentiated business model, a strong balance sheet, proprietary global deal flow and a track record of backing high quality companies and executives. Deeply rooted in the real economy, Tikehau Capital provides bespoke and innovative alternative financing solutions to companies it invests in and seeks to create long-term value for its investors. Leveraging its strong equity base (€2.8bn of shareholders’ equity at 31 December 2020), the firm invests its own capital alongside its investor-clients within each of its strategies. Controlled by its managers alongside leading institutional partners, Tikehau Capital is guided by a strong entrepreneurial spirit and DNA, shared by its 607 employees (at 31 March 2021) across its 12 offices in Europe, Asia and North America.
Tikehau Capital is listed in compartment A of the regulated Euronext Paris market (ISIN code: FR0013230612; Ticker: TKO.FP).
For more information, please visit: www.tikehaucapital.com
08 June 21. Airbus Helicopters strengthens its MRO capabilities with the acquisition of ZF Luftfahrttechnik. Airbus Helicopters and ZF Friedrichshafen AG have signed an agreement regarding the acquisition of ZF Luftfahrttechnik GmbH by Airbus Helicopters as part of its strategy to strengthen its maintenance, repair, and overhaul (MRO) capabilities. This step is also a contribution to improving and maintaining the fleet availability of the programs covered by the ZF Luftfahrttechnik product portfolio. ZF Luftfahrttechnik is currently an MRO service partner for the majority of the German Bundeswehr helicopter fleet. It has also delivered more than 10,000 gearboxes all over the world. It is a supplier of the H135 main gearbox, the tail gearbox of the Tiger helicopter, and has a share in the H145 programme. In 2020, the company achieved revenues of € 85.3m and employed 370 people. ZF Luftfahrttechnik is located in Kassel-Calden.
“By adding ZF Luftfahrttechnik to our portfolio, we will further broaden our range of MRO capabilities and secure additional competences in the area of dynamic systems for Airbus Helicopters, adding value for our global customer base”, said Bruno Even, CEO of Airbus Helicopters. “With ZF Luftfahrttechnik, we will be able to improve our service offering for our customers including key partners like the German Bundeswehr, thus addressing their MRO needs faster with an increased level of integration. ZF Luftfahrttechnik’s balanced and global business model fits very well into our approach to the worldwide helicopter market.”
“With Airbus Helicopters as the acquiring entity, there are excellent prospects for ZF Luftfahrttechnik”, said Wilhelm Rehm, Member of the Board of Management of ZF Group. “It was our intention that the location would have the best possible development opportunities and that the employees would have sound future prospects at the location.”
With over 100 years of experience in the aviation industry, ZF Luftfahrttechnik is a world-leading manufacturer of dynamic components for light and medium helicopters including related services with a global customer base. A subsidiary of the ZF Group, the company is also a leader with regards to the MRO for dynamic components of helicopters. Airbus has a long history of successful partnership with ZF Luftfahrttechnik going back many years to the initial collaboration on the Alouette II and BO105. Today, Airbus intends to build on these strong foundations, continuing to invest in and grow ZF Luftfahrttechnik as part of Airbus.
The acquisition has been approved by the relevant bodies of both companies. It remains subject to regulatory approvals, as well as other conditions usual in this type of transaction, which should be completed in 2021.
08 June 21. Terma delivers the best result ever. 2020/21 was a record year for Terma, which now announces its annual results. Terma delivered its best financial result ever in 2020/21. Revenue grew by 8% and exceeded DKK 2bn for the first time ever. The result increased by 25% to MDKK 137.
“I am extra proud of the result because it has been achieved in a year with several challenges. This proves that we have a strong product portfolio,” says CEO Jes Munk Hansen who took up the post in the spring of 2019.
F-35 production and sales of coastal radars are among the primary factors in generating Terma’s growth during the past year. And with the new contracts added during the year, the outlook for 2021/22 is promising, with expected growth of 10%. In particular, the new 10-year framework contract with the U.S. Air Force and ADLS windfarms will be crucial growth factors in the years to come.
Result achieved during challenging times
But even though the overall result is a success, the narrative differs across Terma’s Business Areas. The service area as well as command & control systems for naval vessels were significantly affected by COVID-19 as expected contracts were lost or postponed. In contrast, the F-35 and radar areas performed very well.
In addition to the strong product portfolio, Terma has delivered a record result despite the challenges due to acceleration of strategies that were launched long before Corona.
“We aimed at increased digitalization, internationalization, and commercialization, and we succeeded,” says Jens Munk Hansen.
In 2020, Terma has expanded in the U.S., established an office in Indonesia, launched a new website, and set new standards for delivery of products to customers online.
- Terma is Denmark’s leading supplier of defense equipment, and the company supplies components for defense, security, and space applications
- Terma benefits from Denmark’s involvement in the F-35 program, the world’s largest industrial project. 700 of Terma’s 1,783 employees work within the F-35 program.
08 June 21. Denel vows to defend itself from SAAB Grintek liquidation bid.
- Denel issued a noteholders circular that it planned to defend itself from SAAB Grintek Defence’s court application to have it liquidated.
- SAAB Grintek Defence applied to the North Gauteng High Court in Pretoria to have Denel liquidated after it failed to pay its debts.
- Union UASA said it hoped that government would step in to resolve the matter
After lingering speculation about the fate of the state-owned arms producer in the face of financial turmoil, Denel issued a noteholders circular that it planned to defend itself from SAAB Grintek Defence’s bid to have it liquidated.
SAAB Grintek, a South African subsidiary of Swedish aerospace and defence giant SAAB, has applied to the North Gauteng High Court in Pretoria to have Denel liquidated after it failed to pay its debts to the private company.
Denel has been in the throes of financial instability with the entity’s ability to pay salaries to its staff on time being drawn into question on multiple occasions in recent years.
Denel issued a noteholders circular on Tuesday morning saying the entity’s management was aware of media reports on its financial position as well as SAAB Grintek Defence’s liquidation bid at the courts. The notice said Denel hoped to resolve matter amicably but was ready to defend itself.
“Noteholders are referred to various press articles relating to an application by SAAB Grintek Defence for the liquidation of the company.
“In this regard, noteholders are advised that Denel is currently engaging with SAAB Grintek Defence to reach an amicable outcome, and if need be, will engage its legal advisors to defend this matter, ” the notice said.
Spokesperson for union UASA Abigail Moyo said while it was still early to comment in detail, organised labour hoped that government would be able to step in and assist Denel in resolving the matter with SAAB.
“We are hoping that government is prompted to assist Denel as an SOE on this liquidation application from SAAB. We are diligently monitoring the situation in order to know if the application will be proven to be successful or not,” said Moyo.
Last month Public Enterprises Minister Pravin Gordhan said the state arms producer faced significant financial pressures as it had a R11bn audit book but could not secure capital to initiate projects.
“It is highly regrettable that Denel last paid full salaries in May of 2020. The current amount owing to employees is about R500m and the business has experienced a loss of critical skills to domestic and foreign companies.
“The board continues to make efforts to secure funding to pay salaries and implement its turnaround strategy to restructure Denel into a far more effective organisation,” Gordhan said.
Public Enterprises director general Kgathatso Tlhakudi told Parliament that Denel had developed a new plan to deal with financial challenges and restructure.
“There will be a need to help Denel with regards to its finances. We are looking to leverage our strategy to secure finance for Denel and are having national discussions to look at how Denel can be assisted in the interim phase,” said Tlhakudi.
Regarding financial challenges and paying salaries on time at Denel, the arms producer’s chair Gloria Serobe said the minister asked the board to be closer to operations and that executives were spending a lot of time with labour dealing with issues of operations including salary payments.
07 Jun 21. Peraton might pursue IPO after integrating acquisitions. US government technology provider Peraton, which US private equity firm Veritas Capital acquired from Harris Corporation four years ago, could be ready for another ownership change as early as 2023, according to Peraton’s top executive.
When Peraton realises the cost savings and increased competitiveness it expects to achieve with its two recent major acquisitions, Veritas might seek to cash in on its investment, said Stu Shea, Peraton’s chairman, president, and CEO. One option would be an initial public offering (IPO), while another would be a merger with another company.
“If we do all the right things, we will be a great company to invest in,” Shea told Janes in a recent interview.
Peraton is currently focused on absorbing the acquisitions, which expanded the size of its 3,500-person workforce to 22,000 employees. Peraton finished buying Northrop Grumman’s information technology services business for USD3.4bn in February and completed its USD7.1bn purchase of Perspecta in May.
As part of the integration process, Peraton will have to blend various businesses processes and systems and hundreds of policies. It plans to shed more than a third of its 150 facilities over the next two years to eliminate duplication.
“We think that we’ll probably keep both the existing Peraton headquarters building in Herndon, Virginia, and the Perspecta headquarters building, which is in Centreville, Virginia,” in the Chantilly area, Shea said. “Then we’ll decide where we’re going to be long-term with the corporate staff. My sense is that we will probably keep the Herndon and Chantilly buildings but we will migrate over time into Chantilly, mostly because it’s a much newer building.” (Source: Jane’s)
04 June 21. Seraphim Capital venture fund focused on SpaceTech set to float. According to Sky News, Seraphim will be looking to raise around £250m in fresh capital via its flotation. Space may be the final frontier but it is no barrier for venture capital funds, it appears.
Sky News reports that a division of Seraphim Capital, which styles itself as the global leader in SpaceTech investment, is in talks with investment bankers on plans for an initial public offering of a fund that would focus on the space industry.
The company has already supported 63 SpaceTech start-ups, including AST Space Mobile, which is developing a cellular broadband network that can be accessed by standard smartphones, and Panet Watchers, experts in synthetic aperture radar-led analytics.
The Seraphim Space Fund is backed by leading “space corporates” and international space agencies, including investors in Airbus, SES, Teledyne, Telespazio, SSTL and accelerator partnerships including Rolls Royce, Inmarsat, European Space Agency and the UK Space Agency.
According to Sky News, Seraphim will be looking to raise around £250mln in fresh capital via its flotation.
Seraphim Capital is a UK-based venture capital firm. We invest in IP-led businesses that have the potential to redefine large existing markets or create entirely new ones.
We typically look to invest at Series A, once businesses have built a product and achieved some early market validation.
We are pioneers of smart capital having previously launched the UK’s first angel-led venture fund and also the world’s first venture fund focused on space-tech.
We currently manage a £50m fund backed by some of the world’s leading space and aerospace companies as well as a £30m fund backed by leading business angels in the UK and US. (Source: proactiveinvestors.co.uk)
09 Apr 21. SRT Marine expects to post FY pre-tax loss. Maritime surveillance outfit SRT Marine said on Friday that it expects to report revenues of approximately £8.2m and a pre-tax loss of £5.8m for the year ended 31 March.
During the period, existing system contract customers made cash payments of £13.0m per agreed project payment schedules, with a further £5.7m due in the coming year. However, because of Covid-19 lockdown related implementation delays, no invoice milestones were completed and, as a result, no revenues were recognised during the year.
A fixed one-year Coronavirus Business Interruption Loan Scheme support loan of £2.5m from SRT’s bankers was drawn down in April, with repayments to be made on a quarterly basis commencing in July through to April 2023.
SRT stated that given the Covid environment, its transceivers business performed “robustly”, achieving marginally higher revenues on the previous year and stable gross profit margins, while the “unexpected length and frequency of Covid lockdowns” delayed new system opportunities in the Middle East into the new financial year.
However, the AIM-listed group did note that forced delays in new and existing system contracts had enabled its systems delivery team, in-country partners and customers to “substantially restructure and refine” its systems implementation model, with the firm now able to pre-build and configure many of its system modules in the UK and ship to in-country partners who can be supported remotely and with less on-site SRT resource application to install and commission the systems, facilitating multiple project implementation scale-up in the process.
Chief executive Simon Tucker said: “We now have seven new system contracts worth a total of £125.0m which are pending commencement as the respective countries relax restrictions and contracting processes catch up and normalise.
“The forced delay has provided valuable time for our delivery team, in-country partners and customers to restructure and consolidate our systems delivery methods, implementing key method changes and equipment preparations that will facilitate the necessary significant scaling as lockdowns ease in the coming months and customer contracting proceeds.”
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.