Exponent sells Pattonair stake to Platinum Equity

Kenny Wastell
22 August 2017

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Exponent Private Equity has sold its stake in Pattonair Group, a UK-based supplier of components for use in the aerospace and defence industries, to Platinum Equity.

The deal value remains undisclosed, though a source with knowledge of the matter told unquote" that the transaction values the business in the £300-400m range.

The deal is an exit for Exponent's second vehicle, which closed with commitments of £805m in December 2007, according to unquote" data.

Under the vendor's tenure, the business has expanded internationally and now has operations across Germany, Poland, Italy, France, Singapore, China, Canada, the US and Brazil. It also expanded its management team and client base.

During the six-year holding period, the group increased its turnover from £235m to £326m, according to figures from unquote" data and a statement issued by the vendor.

Platinum drew capital from its $6.5bn fourth buyout fund, Platinum Equity Capital Partners IV, to fund the transaction. The company will pursue an acquisitive growth strategy under the GP's tenure.

The deal is expected to complete in Q4 2017, subject to regulatory approval.

Debt
Deutsche Bank will lead a bond offering to support the transaction.

Previous funding
Exponent carved out Pattonair from parent group Umeco in May 2011, in a £145.8m deal.

Company
Founded in 1970, Derby-headquartered Pattonair supplies components – including bearings, electricals, fasteners, seals, clamps and hinges – to the aerospace and defence industries. Its clients include Rolls-Royce, United Technologies, Safran Group, Parker, General Electric, Boeing and Airbus.

According to publicly available documents, the group generated a turnover of £264m in the year ending in March 2016, with EBITDA before foreign exchange of £17m. It also had net external debt of £58m. However, since then, Pattonair has secured a number of deals including an enhanced contract with Rolls-Royce, the renewal of its contract with Siemens Canada and Industrial Turbine Company for 10 years, and a new contract with All Nippon Airways.

People
Exponent Private Equity – Tim Easingwood (partner).
Platinum Equity – Louis Samson (partner).
Pattonair Group – Wayne Hollinshead (CEO).

Advisers
Vendor – Jefferies International (corporate finance); Ropes & Gray (legal).
Equity – Rothschild (corporate finance); Latham & Watkins (legal).