ECI Partners has sold its stake in military navigation company Kelvin Hughes to Airbus Defence Electronics spinout Hensoldt.
The sale price has not been disclosed but ECI is reporting a return of 3.3x on its original investment in the company's £52m buyout. This figure includes the carve-out of ChartCo, which was sold to Equistone for £55m in June 2016.
Kelvin Hughes has expand its product portfolio under ECI's stewardship, launching a solid-state radar called Sharpeye, which is used by 25 navies.
Acquirer Hensoldt is a spinout of Airbus that focuses on electronics for security and surveillance. In May, it acquired Euroavionics from Equistone for an undisclosed sum. Hensoldt employs 4,000 people and generates annual revenues of around €1bn.
ECI acquired Kelvin Hughes from Smiths Group in a £52m buyout comprising £48m in cash and a £4m deferred payment. The bid was backed by senior debt from Royal Bank of Scotland and unwarranted mezzanine financing provided by Capital Source Europe.
In June 2016, Equistone carved out digital navigation compliance business ChartCo from Kelvin Hughes.
Founded in 1750, Kelvin Hughes supplies navies with radar and surveillance equipment. It claims to have developed the first commercial radar in 1947. The business is headquartered in Enfield, London, and has sales offices in Washington DC, Singapore, Rotterdam and Copenhagen. The group currently employs 200 people globally and reported revenue growth of 20% over the 2013-2016 period. In 2016, it posted £63.6m in revenues, with EBITDA of £7.5m and gross profit of £28.5m.
ECI Partners – Sean Whelan (managing partner).
Kelvin Hughes – Russel Gould (CEO).
Acquirer – Stephens Europe (corporate finance).
Vendor – Rothschild (corporate finance).
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