Transaction overview
TransDigm Group acquired Raptor Scientific for $655 million on May 28, 2024, after announcing the deal in September 2023. Founded in 2019 by L Squared Capital Partners, Raptor Scientific is a leading provider of complex test and measurement solutions for advanced defense, space, and aerospace applications. The company has grown through both organic expansion and strategic acquisitions, positioning itself as a key player in the industry.
Deal structure and financing
The acquisition was structured as an all-cash deal with no specific equity or debt breakdown provided by the parties involved. Harris Williams served as the financial advisor to TransDigm Group on this transaction, while Janes Capital Partners acted as co-advisor. L Squared Capital Partners retained its role as the sell-side advisor through L Squared’s affiliate L Squared Capital Management. No information was disclosed regarding leverage metrics or lock-up terms for key executives of Raptor Scientific. Additionally, there are no known provisions related to an IPO optionality post-acquisition.
Strategic context
TransDigm Group's acquisition of Raptor Scientific underscores its strategy to expand its portfolio in the defense and aerospace sectors by acquiring specialized companies that offer critical technologies and services. For TransDigm, this deal provides access to Raptor’s extensive test and measurement capabilities for advanced applications, which can bolster its position as a supplier of mission-critical products.
L Squared Capital Partners' rationale for divesting Raptor Scientific is rooted in the company's substantial growth over five years, fueled by strategic acquisitions. The sale aligns with L Squared's goal to achieve significant returns on its investments and to redeploy capital into new opportunities within high-growth sectors like aerospace and defense. This exit also reflects the robust performance of the test and measurement segment, which has seen rising demand driven by government spending and technological advancements.
Regulatory path
The acquisition was reviewed by regulators in the United States due to the significant transaction size and the nature of Raptor Scientific’s business involving advanced technology solutions for defense applications. The deal did not require any specific remedies or divestitures, indicating a smooth regulatory process. TransDigm Group filed HSR (Hart-Scott-Rodino) with the U.S. Federal Trade Commission and Department of Justice as part of standard procedures for large acquisitions in the United States.