SK Capital Announces Agreement to Acquire North America Composites & Fuel Containment Division from Parker Hannifin Corporation
SK Capital Partners has signed an agreement to acquire Parker Hannifin 's North America Composites & Fuel Containment (CFC) Division. The CFC Division, with annual sales of approximately $350 million, is a leading provider of engineered carbon fiber composite components and fuel containment solutions for defense and commercial aerospace markets. Operating six manufacturing locations across North America, the division employs about 1,700 people.
SK Capital, known for transforming non-core businesses into independent companies, sees this acquisition as an opportunity to implement its growth strategy. The transaction is expected to close in the fourth quarter of 2024. Larry Resnick, an aerospace and defense industry executive, will join the business' Board of Directors post-acquisition.
SK Capital Partners ha firmato un accordo per acquisire la Divisione Compositi e Contenimento Carburante (CFC) di Parker Hannifin per il Nord America. La Divisione CFC, con vendite annuali di circa 350 milioni di dollari, è un fornitore leader di componenti in fibra di carbonio ingegnerizzati e soluzioni di contenimento carburante per i mercati della difesa e dell'aviazione commerciale. Operando in sei sedi produttive in Nord America, la divisione impiega circa 1.700 persone.
SK Capital, nota per trasformare aziende non core in imprese indipendenti, considera questa acquisizione un'opportunità per attuare la propria strategia di crescita. Ci si aspetta che la transazione si concluda nel quarto trimestre del 2024. Larry Resnick, un dirigente del settore aerospaziale e della difesa, entrerà a far parte del Consiglio di Amministrazione dell'azienda dopo l'acquisizione.
SK Capital Partners ha firmado un acuerdo para adquirir la División de Compuestos y Contención de Combustible (CFC) de Parker Hannifin en América del Norte. La División CFC, con ventas anuales de aproximadamente 350 millones de dólares, es un proveedor líder de componentes de compuestos de fibra de carbono diseñados y soluciones de contención de combustibles para los mercados de defensa y aviación comercial. Con seis ubicaciones de fabricación en América del Norte, la división emplea a cerca de 1.700 personas.
SK Capital, conocida por transformar negocios no centrales en empresas independientes, ve esta adquisición como una oportunidad para implementar su estrategia de crecimiento. Se espera que la transacción se cierre en el cuarto trimestre de 2024. Larry Resnick, un ejecutivo de la industria aeroespacial y de defensa, se unirá a la Junta Directiva de la empresa tras la adquisición.
SK Capital Partners가 파커 하니핀의 북미 복합재 및 연료 저장(CFC) 부서를 인수하기 위한 계약을 체결했습니다. CFC 부서는 연간 약 3억 5천만 달러의 매출을 올리며, 방산 및 상업 항공 우주 시장을 위한 엔지니어링 탄소 섬유 복합재 구성 요소 및 연료 저장 솔루션의 주요 공급업체입니다. 북미 전역에 걸쳐 6개의 제조 위치에서 운영되며, 이 부서는 약 1,700명의 직원을 고용하고 있습니다.
비핵심 사업체를 독립 기업으로 전환하는 것으로 알려진 SK Capital은 이번 인수를 성장 전략을 실행할 기회로 보고 있습니다. 이번 거래는 2024년 4분기에 마무리될 것으로 예상됩니다. 항공우주 및 방산 산업의 경영자 라리 레즈닉이 인수 후 기업의 이사회에 합류할 예정입니다.
SK Capital Partners a signé un accord pour acquérir la Division Composites et Contention de Carburant (CFC) de Parker Hannifin en Amérique du Nord. La Division CFC, avec des ventes annuelles d'environ 350 millions de dollars, est un fournisseur de premier plan de composants en composites en fibre de carbone et de solutions de contention de carburant pour les marchés de la défense et de l'aéronautique commerciale. Ayant six sites de fabrication à travers l'Amérique du Nord, la division emploie environ 1 700 personnes.
SK Capital, connue pour transformer des entreprises non essentielles en sociétés indépendantes, considère cette acquisition comme une opportunité de mettre en œuvre sa stratégie de croissance. La transaction devrait être finalisée au quatrième trimestre de 2024. Larry Resnick, un cadre de l'industrie aérospatiale et de défense, rejoindra le Conseil d'Administration de l'entreprise après l'acquisition.
SK Capital Partners hat eine Vereinbarung zum Erwerb der Nordamerika-Composite- und Kraftstoffbehälterabteilung (CFC) von Parker Hannifin unterzeichnet. Die CFC-Abteilung, die einen Jahresumsatz von etwa 350 Millionen Dollar erwirtschaftet, ist ein führender Anbieter von konzipierten Komponenten aus Kohlefaserverbundstoffen sowie von Lösungen für Kraftstoffbehältertechnologien für die Verteidigungs- und den kommerziellen Luftfahrtmarkt. Die Abteilung betreibt sechs Produktionsstandorte in Nordamerika und beschäftigt etwa 1.700 Mitarbeiter.
SK Capital, bekannt für die Umwandlung von Nicht-Kernunternehmen in unabhängige Firmen, sieht diese Übernahme als Gelegenheit zur Umsetzung seiner Wachstumsstrategie. Die Transaktion wird voraussichtlich im vierter Quartal 2024 abgeschlossen sein. Larry Resnick, ein Führungskraft der Luft- und Raumfahrt- sowie Verteidigungsindustrie, wird nach der Übernahme dem Board of Directors des Unternehmens beitreten.
- Acquisition of a division with $350 million in annual sales
- Expansion into the aerospace and defense sector
- Addition of 6 manufacturing locations and 1,700 employees
- Potential for synergies with SK Capital's existing portfolio companies
- Significant integration challenges may arise from acquiring a large division
- Potential financial strain due to the size of the acquisition
- Extended timeline for deal closure (Q4 2024) may introduce market uncertainties
Insights
SK Capital's acquisition of Parker Hannifin's North America Composites & Fuel Containment (CFC) Division is a significant move in the aerospace and defense sector. With annual sales of
From an investor's perspective, this acquisition could be viewed positively for SK Capital, as it expands their presence in the lucrative aerospace and defense industry. The carve-out strategy employed here is a proven approach for SK Capital, potentially unlocking value by allowing the CFC Division to operate as an independent entity with focused management and resources.
For Parker Hannifin (NYSE: PH) shareholders, the impact is less clear. While divesting non-core assets can streamline operations and potentially improve overall efficiency, the loss of
The involvement of aerospace and defense industry executive Larry Resnick on the board post-acquisition adds credibility to the deal and could help smooth the transition. The committed debt financing from HPS Investment Partners suggests confidence in the deal's potential, though investors should be mindful of how this debt might impact the new entity's financial structure.
The acquisition of Parker Hannifin's CFC Division by SK Capital is a notable development in the aerospace composites market. Carbon fiber composites are increasingly critical in aerospace applications due to their high strength-to-weight ratio, which contributes to fuel efficiency and performance improvements in aircraft.
The CFC Division's focus on both defense and commercial aerospace markets is strategically important. Defense aerospace tends to be more stable and less cyclical than commercial aviation, providing a buffer against market fluctuations. The fuel containment solutions offered by the division are particularly crucial, as they directly impact aircraft safety and efficiency.
With six manufacturing locations across North America and a workforce of 1,700, the CFC Division has significant production capacity and expertise. This geographic spread could be advantageous in terms of serving different regional markets and potentially benefiting from various local incentives or defense contracts.
For the aerospace industry as a whole, this acquisition could signal increased interest from private equity in specialized aerospace component manufacturers. This trend might lead to more focused investments and potentially accelerate innovation in niche areas of aerospace technology. However, it's important to monitor how this change in ownership might affect long-term research and development initiatives, which are vital in this high-tech sector.
The acquisition of Parker Hannifin's CFC Division by SK Capital is indicative of broader trends in the aerospace and defense materials market. The growing demand for lightweight, high-performance materials in aerospace applications is driving interest in companies specializing in advanced composites.
This deal aligns with the ongoing consolidation in the aerospace supply chain, where specialized component manufacturers are becoming attractive targets for investment firms seeking to capitalize on the sector's growth potential. The aerospace composites market is projected to grow at a CAGR of
SK Capital's strategy of acquiring and transforming non-core business units from larger corporations has proven successful in other sectors. This approach could potentially lead to increased focus and agility for the CFC Division, allowing it to respond more quickly to market demands and technological advancements.
However, investors should be aware of potential challenges. The aerospace industry is highly regulated, with long development cycles and stringent quality requirements. Any disruptions in the transition period could impact relationships with key customers. Additionally, the cyclical nature of the commercial aerospace market and potential defense budget fluctuations pose risks that need to be carefully managed.
Overall, this acquisition reflects the growing importance of advanced materials in aerospace and could position SK Capital to benefit from long-term trends in the industry, provided they can successfully navigate the unique challenges of the aerospace sector.
Parker Hannifin’s CFC Division is a leading provider of engineered carbon fiber composite components and fuel containment solutions for the defense and commercial aerospace markets. The business generates annual sales of approximately
Jared Kramer, a Principal at SK Capital, said, “CFC has a rich heritage in providing differentiated material science solutions for leading customers across the aerospace and defense sector. Our firm is privileged to be partnering with CFC’s team to continue delivering excellence for its customers and their mission-critical applications.”
Jack Norris, a Managing Director at SK Capital, added, “SK Capital has a long track record of carving out non-core businesses of larger companies and establishing them as thriving, independent companies. We are highly enthusiastic about the acquisition of Parker’s CFC Division and believe it represents a great opportunity to implement our transformational growth strategy.”
SK Capital’s portfolio includes a number of companies that operate in the aerospace and defense value chain, including Luxium Solutions, a producer of specialty materials and systems for photonics applications. As part of its acquisition of CFC, SK Capital worked closely with aerospace and defense industry executive Larry Resnick, who will remain involved following the close of the acquisition as a member of the business’ Board of Directors.
The transaction is expected to close in the fourth quarter of 2024. Latham & Watkins LLP acted as legal counsel to SK Capital. J.P. Morgan Securities LLC is serving as financial advisor to SK Capital and committed debt financing was provided by direct lending funds and accounts managed by HPS Investment Partners, LLC. Lazard is serving as exclusive financial advisor, and Jones Day acted as legal counsel, to Parker Hannifin.
About SK Capital
SK Capital is a private investment firm with a disciplined focus on the specialty materials, ingredients, and life sciences sectors. The Firm seeks to build resilient, sustainable, and growing businesses that create substantial long-term value. SK Capital aims to utilize its industry, operating, and investment experience to identify opportunities to transform businesses into higher performing organizations with improved strategic positioning, growth, and profitability, as well as lower operating risk. SK Capital’s portfolio of businesses generates revenues of approximately
About Parker Hannifin
Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or @parkerhannifin.
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Jeremy Milner
BackBay Communications
jeremy.milner@backbaycommunications.com
(401) 862-9422
Source: SK Capital Partners
FAQ
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