Consolidated Aerospace Manufacturing LLC (CAM) is exploring a sale that could value the manufacturer of fasteners and other components for the aerospace industry at around $1 billion, including debt, according to people familiar with the matter.
CAM’s owner, investment firm Tinicum Inc, has hired investment bank Lazard Ltd to run an auction process for the company that is in its early stages, the sources said.
CAM has 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of about $80 million, one of the sources added.
Buyout firm KKR & Co Inc is one the bidders for CAM, the sources said. KKR agreed last month to acquire Novaria Group, a peer of CAM that makes specialty aerospace hardware, for about 12 times that company’s EBITDA, according to the sources. It could realize operational and cost synergies by combining Novaria with CAM.
The sources cautioned that no deal is certain and asked not to be identified because the matter is confidential. Lazard and KKR declined to comment, while CAM and Tinicum did not respond to requests for comment.
Headquartered in Brea, California, CAM was launched by Tinicum in 2012 as a holding company for several manufacturing firms active in aerospace component sector. Among CAM’s holdings are Bristol Industries, E.A. Patten, Aerofit, Voss Industries, 3V Fasteners, QRP and Moeller.
Credit ratings agency Moody’s Investors Service Inc has called CAM’s operational history “mixed,” as the company has struggled to integrate some of its acquisitions.
Moody’s also said in October it expected CAM’s favorable aerospace fundamentals and good execution to support mid-single-digit sales growth along with healthy profitability.
However, CAM is also exposed to the volatility of the cyclical commercial aerospace markets because of its limited scale, Moody’s cautioned.
Source: Reuters.com