Kaman Corp., Bloomfield, CT, entered into a definitive agreement to sell its Distribution segment to affiliates of investment firm Littlejohn & Co., LLC, Greenwich, CT, for total cash consideration of $700 million, subject to customary closing conditions and working capital adjustments.
Kaman’s Distribution Segment is a distributor of electro-mechanical, bearings, power transmission, motion control and electrical and fluid power components, as well as automation and MRO supplies. The business provides engineering, design and support for automation, electrical, linear, hydraulic and pneumatic systems as well as belting and rubber fabrication, customized mechanical services, hose assemblies, repair, fluid analysis and motor management. With approximately 220 locations across the U.S. and Puerto Rico, Kaman Distribution’s 2,200 employees generated $1.1 billion in net revenue in 2018.
“Kaman Distribution builds upon Littlejohn’s deep expertise investing in the distribution and industrial sectors,” said Tony Miranda, Managing Director of Littlejohn. “We have long admired Kaman Distribution, a market-leading provider of products and solutions to its customers as well as a trusted partner to its suppliers, and look forward to working closely with management to further invest in the business and drive growth, both organically and via acquisition."
The transaction value represents a multiple of 10.4 times trailing twelve-month (TTM) Segment Adjusted EBITDA* for the Distribution segment.
“For Kaman this transaction represents an important milestone in our portfolio transformation and the culmination of a thorough strategic review undertaken by our Board of Directors,” said Neal Keating, chairman, president and CEO. “Our strengthened balance sheet will better position the company to invest in and build our higher margin, higher growth aerospace and engineered products businesses to enhance shareholder value.”
Following the completion of the transaction, Kaman will continue to design and manufacture critical components, structures, and systems for commercial and military customers. The Aerospace Segment currently operates out of fourteen facilities around the world with almost 3,000 employees and is expected to generate between $730 and $760 million of revenue in 2019.