L Squared Capital Partners Announces Pending Sale of Raptor Scientific to TransDigm Group Incorporated for $655 Million
L Squared Capital Partners has announced the pending sale of Raptor Scientific to TransDigm Group for $655 million in cash. This transaction, subject to customary closing conditions and regulatory approval, represents the ninth exit for L Squared since 2014 and the second in the last 45 days. Raptor Scientific has significantly grown its revenue from approximately $9 million to $90 million under L Squared's ownership, thanks to strategic investments and a strong management team. Raptor Scientific specializes in advanced test and measurement solutions for Defense, Space, and Aerospace applications. The acquisition is expected to provide Raptor Scientific with additional resources and scale to accelerate its growth. Both L Squared and TransDigm express optimism about the future collaboration.
- L Squared's successful exit: Raptor Scientific marks the ninth exit since 2014.
- Revenue growth: Raptor Scientific's revenue increased from ~$9M to ~$90M under L Squared's ownership.
- Strategic investments: Investments in go-to-market, human capital, and product development drove growth.
- Strong management: A world-class management team was recruited to lead Raptor Scientific.
- Future growth potential: The acquisition by TransDigm is expected to provide additional resources and scale.
- Regulatory approval pending: The transaction is subject to customary closing conditions and regulatory approval, which introduces uncertainty.
- High acquisition cost: The $655 million cash acquisition might be seen as a high expense by some investors.
Insights
The acquisition of Raptor Scientific by TransDigm Group for
Short-term: The deal's completion could positively impact TransDigm's stock price, as it enhances their portfolio with high-value test and measurement solutions for the aerospace and defense sectors. However, the stock might also see some volatility due to the regulatory approval process and integration risks.
Long-term: If the integration is successful, it could boost TransDigm's earnings and market position significantly, making it a strategic win. However, investors should be mindful of potential integration costs and the need to maintain Raptor's growth trajectory.
The aerospace and defense industry's demand for advanced test and measurement solutions is robust, especially with the increasing complexity of defense systems and space exploration. Raptor Scientific's suite of capabilities aligns well with current industry trends towards precision and advanced testing.
Market Potential: The acquisition places TransDigm in a strong position to capitalize on the growing market for defense and aerospace testing solutions. This is a market segment with high barriers to entry due to the specialized technology and expertise required, which bodes well for TransDigm's competitive positioning.
Industry Impact: This acquisition could also set a precedent for further consolidation in the aerospace and defense sectors, as companies look to enhance their technological capabilities and product offerings through strategic acquisitions.
The pending sale marks the ninth overall exit since L Squared’s formation in 2014 and second in last 45 days
Raptor Scientific was founded by L Squared with the thesis of investing in the attractive Aerospace and Defense (“A&D”) test & measurement market. Since 2019, Raptor Scientific has built out a suite of complementary capabilities leveraging advanced test and measurement technologies. Under L Squared’s ownership, Raptor Scientific grew revenue from
“We are grateful to Derek Coppinger and the entire Raptor Scientific executive team for their leadership that drove this highly successful outcome,” said Sean Barrette, Chairman of the Board of Raptor Scientific and Partner at L Squared. “Raptor Scientific was founded with the mandate to accelerate the growth of advanced A&D test and measurement technologies that support national security assets. These unique capabilities protect our freedom in a variety of operational theaters. We believe that TransDigm is the ideal new partner for Derek and the Raptor Scientific team as they continue this important mission.”
“I greatly appreciate the support and resources the L Squared team have provided over the years as we built Raptor Scientific into a leading provider of complex test and measurement solutions supporting the Defense, Space, and Aerospace industries,” said Derek Coppinger, CEO of Raptor Scientific. “We are excited to begin our next chapter of growth with TransDigm, who is well positioned to provide us with the additional resources and scale necessary to accelerate our momentum and drive future success. The world-class and dedicated employees of Raptor Scientific deserve the highest recognition for building this superior organization which supports our customers and warfighters every day. For that I am truly grateful.”
L Squared and Raptor Scientific were advised on the transaction by Harris Williams & Co., Vedder Price P.C., PwC, and CSP Associates.
About L Squared Capital Partners
L Squared Capital Partners is a private equity investment firm with over
About Raptor Scientific
Raptor Scientific is a global leader in complex test and measurement solutions for advanced Defense, Space, and Aerospace applications. The Raptor platform results from the prior acquisition and integration of five companies: Space Electronics, Sensor Concepts, TestVonics, King Nutronics, and MEDTHERM. Raptor Scientific’s core capabilities include an extensive range of test and measurement instrumentation and services, including Radio Frequency Systems; Physical Property Systems; and Pressure, Air Data, & Temperature Systems, that are critical to technological advancement and national security of the
About TransDigm Group
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems and specialized flight, wind tunnel and jet engine testing services and equipment.
This press release is provided for informational purposes only and is not intended as investment advice or an offer or solicitation with respect to the purchase of any investment. Investing with any investment firm is suitable only for qualified investors that fully understand the risks of such an investment. L Squared Capital Partners is an investment adviser registered with the United States Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investments with L Squared Capital Partners are only offered in accordance with applicable securities laws.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240524906714/en/
Sean Barrette
Partner
Office: (949) 398-0178
sbarrette@lsquaredcap.com
Tyler Huez
Principal
Office: (949) 398-0182
thuez@lsquaredcap.com
Jack Foley
Senior Associate
Office: (949) 398-0184
jfoley@lsquaredcap.com
Source: L Squared Capital Partners
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