IK Partners in exclusivity to sell Exxelia to US trade

IK Partners has entered into a put option agreement to sell its stake in Paris-based Exxelia to US-based aerospace business HEICO Corporation.

HEICO is expected to pay EUR 453m in cash plus the assumption of approximately EUR 14m of liabilities at closing, which is expected by the end of 1Q23, subject to approvals, according to a statement from the buyer.

Exxelia's management and team members are expected to continue to own a minority interest of around 5% of the business, the statement said.

Exxelia was acquired by IK VII Fund, which closed at EUR 1.4bn in 2013. The European private equity firm is currently fundraising for IK X, which was launched in February. Since IK investment in 2015, Exxelia executed its operational transformation plan and expanding its product portfolio and geographical reach through M&A.

HEICO said that the transaction would be its largest-ever acquisition in terms of purchase price and revenues. Exxelia is expected to generate approximately EUR 190m in 2022, of which approximately 60% is expected to be generated in European markets, with the remaining sales occurring in the United States and other international markets, it said.

The French manufacturer in high-performance complex passive components and subsystems was marketed off at an EBITDA range of EUR 40m-EUR 50m range, according to Mergermarket. Rothschild was appointed to run the sale process in late H1, the report noted.

The sale process was IK’s second attempt to exit the business. In early 2020, private equity peer HLD signed a deal to acquire Exxelia but subsequently pulled out as it became clear how severely the aviation sector, which Exxelia serves, was going to be hit by the COVID-19 pandemic, as reported. The deal fell through given that the HLD failed to secure sufficient financing.

Company
Founded in 2009 from the merger of five companies and headquartered in Paris, France, Exxelia is a manufacturer of complex passive components and precision subsystems for defence, space, aviation, energy, transport, medical and telecommunications.

The Company operates from 11 manufacturing sites with more than 2,100 employees, manufacturing products including capacitors, inductors, resistors, filters, position sensors and rotary joints.

People
Exxelia – Paul Maisonnier (CEO).
IK Partners – Dan Soudry (managing partner).
HEICO – Laurans A. Mendelson (chairman and CEO) and Victor H. Mendelson (co-president and CEO of Electronic Technologies Group).

Advisors
Vendor – Rothschild (M&A) and Willkie Farr & Gallagher (legal).
Buyer – Canaccord Genuity (M&A) Squire Patton Bogg (legal).

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