Cerberus Acquires Calspan’s Hypersonics and Test Systems Business Units from TransDigm and Forms North Wind, a Leading Independent Supplier of Hypersonic Test Infrastructure, Systems and Services

Rhea-AI Summary

Cerberus Capital Management has acquired Calspan's hypersonic and defense test systems business units from TransDigm Group (NYSE: TDG). The acquisition includes Calspan Aero Systems Engineering and Calspan Systems, resulting in the formation of North Wind, an independent business focusing on the advancement of U.S. hypersonic test capabilities.

North Wind, headquartered in St. Paul, Minnesota, will provide ground-based facility design, build and operations, testing, and analysis. This acquisition is part of Cerberus' strategy to address supply chain shortages and enhance U.S. national security. Key leadership includes David Meier as CEO, Stephanie Mumford as President of North Wind Systems, and Dr. Anthony Castrogiovanni as CTO.

This move aims to support U.S. defense infrastructure, with Cerberus providing resources and backing to drive innovation and resilience.

Positive

• Cerberus Capital Management's acquisition of Calspan’s hypersonic and defense test systems units from TransDigm.
• Formation of North Wind, an independent business focused on hypersonic test capabilities.
• North Wind headquartered in St. Paul, Minnesota, with specialized experience in U.S. government RDT&E.
• Leadership team includes experienced industry experts: David Meier as CEO, Stephanie Mumford as President, and Dr. Anthony Castrogiovanni as CTO.
• Cerberus' strategy to address supply chain shortages and enhance U.S. national security.

Negative

• Potential risks and uncertainties associated with the integration of acquired business units.
• Dependence on Cerberus' support and resources for the success of North Wind.
• Market reaction to TransDigm's sale of hypersonic and defense test systems business units.

Insights

Financial Analyst

Cerberus Capital Management's acquisition of Calspan's hypersonic and defense test systems business units from TransDigm is strategically significant for several reasons. First, this move establishes North Wind, an independent business aimed at enhancing the U.S.'s hypersonic test capabilities. This sector is of national importance, especially given the geopolitical landscape and the increasing focus on advanced defense technologies.

From a financial perspective, this acquisition potentially strengthens Cerberus' portfolio by including a high-demand segment. Hypersonic capabilities are seen as a critical area of defense and government investment in this area is expected to grow. This ensures a steady stream of contracts and funding for North Wind, which could translate to significant revenue growth.

TransDigm investors might also benefit. By divesting non-core businesses, TransDigm can streamline its operations and focus on its more profitable sectors. This could lead to improved financial performance and potentially higher returns for its shareholders.

Retail investors should note any immediate changes in stock prices for both Cerberus and TransDigm. Long-term, this acquisition could lead to increased stability and growth for Cerberus while offering TransDigm a chance to focus on core competencies.

Defense Industry Expert

This acquisition is particularly relevant for those interested in the defense and aerospace industry. Hypersonic technology represents the next frontier in military innovation, offering unparalleled speed and maneuverability for missiles and aircraft. By creating North Wind, Cerberus is positioning itself as a key player in this essential arena.

Cerberus' focus on expanding and modernizing hypersonic test infrastructure is critical. This will likely involve the development of cutting-edge facilities and testing protocols, enabling the U.S. to maintain its technological edge. The involvement of individuals with extensive experience in hypersonics, such as Dr. Anthony Castrogiovanni, underscores the seriousness of this endeavor.

For retail investors, understanding the strategic importance of hypersonics can provide insight into the long-term potential of this investment. The U.S. government is likely to continue prioritizing funding for hypersonic development, securing a continuous flow of contracts and advancements.

NEW YORK & ST. PAUL, Minn.--(BUSINESS WIRE)-- Cerberus Capital Management, L.P. (together with its affiliates, “Cerberus”), a global leader in alternative investing, today announced that it has acquired Calspan’s hypersonic and defense test systems business units from TransDigm Group (NYSE: TDG). In acquiring Calspan Aero Systems Engineering and Calspan Systems, Cerberus has established North Wind, an independent business centrally focused on the advancement of the United States’ hypersonic test capability through ground-based facility design, build and operations, testing, and analysis.

Headquartered in St. Paul, Minnesota, with decades of specialized experience as a trusted independent partner to the U.S. government's Research, Development, Test & Evaluation (RDT&E) organizations, North Wind is uniquely positioned to serve the demands of its customers with high-quality, customized engineering services and integrated solutions.

The acquisition and subsequent formation of North Wind are led by Cerberus’ Supply Chain and Strategic Opportunities platform, which acquires and invests in companies addressing supply chain shortages, defined by critical long-term U.S. national security requirements, to help drive innovation, promote resilient infrastructure, and increase security for the United States and its allies.

Michael Palmer, Senior Managing Director on Cerberus’ Supply Chain and Strategic Opportunities platform, said: “We've been tracking this company for a while and admire their innovation and expertise in hypersonics analysis and testing. Enabling the U.S. to meet the great need for hypersonic capabilities, North Wind is an important investment. We couldn't be more thrilled to execute against the team's vision as a well-resourced standalone company.”

David Meier, who has been the President and CEO of Calspan Aero Systems Engineering since 2015, will lead North Wind as CEO. Stephanie Mumford, President of Calspan Systems since 2016, will serve as President of the North Wind Systems business unit headquartered in Newport News, Virginia. Dr. Anthony Castrogiovanni, a leading technologist in the hypersonics industry who has served as Calspan’s CTO since 2021 and previously founded ACEnT Laboratories, will assume the role of CTO for North Wind.

Mr. Meier added: “We’re excited to be joining forces with a like-minded partner in Cerberus to establish North Wind and drive the expansion and modernization of our nation’s valuable test infrastructure with a focus on hypersonics. With Cerberus’ support and dedicated resources, we’re confident that North Wind will thrive.”

About North Wind

North Wind is a leading independent supplier of complex hypersonic and Research, Development, Test & Evaluation (RDT&E) systems and services. Leveraging decades of specialized experience, North Wind delivers hypersonic and RDT&E capabilities through five complementary business segments: Applied R&D; Test Articles and Critical System Components; Test Facility Design & Build; Test Services; Flight Testing & Flight Systems. The Company’s offerings span the full life cycle of aerospace & defense and commercial systems, including end-to-end turnkey solutions. Learn more at www.north-wind.com.

About Cerberus

Founded in 1992, Cerberus is a global leader in alternative investing with approximately $65 billion in assets complementary credit, real estate, and private equity strategies. We invest across the capital structure where we believe our integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Our tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors. For more information about our people and platforms, visit us at www.cerberus.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240530842992/en/

Media

Cerberus

Jason Ghassemi

Chief Communications Officer

media@cerberus.com

Source: Cerberus Capital Management, L.P.

FAQ

Who acquired Calspan's hypersonic and defense test systems business units?

Cerberus Capital Management acquired Calspan's hypersonic and defense test systems business units from TransDigm Group.

What is the new company formed from the acquisition of Calspan's business units by Cerberus?

The new company formed is called North Wind.

What will North Wind focus on?

North Wind will focus on advancing U.S. hypersonic test capabilities through ground-based facility design, build and operations, testing, and analysis.

Where is North Wind headquartered?

North Wind is headquartered in St. Paul, Minnesota.

Who will lead North Wind as CEO?

David Meier will lead North Wind as CEO.

What role will Stephanie Mumford have at North Wind?

Stephanie Mumford will serve as President of the North Wind Systems business unit.

What is the significance of Cerberus’ acquisition from TransDigm?

The acquisition aims to enhance U.S. hypersonic test infrastructure and address national security requirements.