Houlihan Lokey Advises Kellstrom Defense Aerospace

Houlihan Lokey is pleased to announce the successful placement of a $65 million financing for Kellstrom Defense Aerospace, Inc. (Kellstrom Defense), majority-owned by affiliates of PNC Mezzanine Capital and Barings. The financing consisted of a $10 million revolver and a $55 million term loan. Proceeds were used to finance the acquisition of Williams Aerospace & Manufacturing, Inc. (WAM), refinance existing senior indebtedness, and pay related fees and expenses. The transaction closed on January 3, 2019.

Kellstrom Defense is a provider of aftermarket parts and sustainment solutions for legacy defense aircraft, with a focus on strategic parts distribution, component repair services, and the manufacturing of engineered products for military transports, fighter, and rotary wing platforms. Kellstrom Defense is headquartered in El Segundo, California and serves the U.S. military and customers in over 60 partnering nations. The company is committed to compliance, with hundreds of active export licenses and dedicated contract, export, and security personnel.

WAM operates as a licensed manufacturer of a variety of complex metal assemblies, integrated sheet metal structures, thermoplastic molded assemblies, and sewn fabric products primarily for the P-3 and C-130 platforms as well as for the F-16, F-22, C-5, and S-3 platforms, selling primarily to licensed Lockheed Martin Corporation distributors and the U.S. government. Over its more than 20 year history, WAM has developed a range of proprietary tooling for the manufacture of complex defense aircraft parts as well as strong capabilities in thermoplastic molding, CNC machining and the integration of aerospace and defense aftermarket components.  

The WAM acquisition represents a high-margin bolt-on acquisition and will be integrated with the company’s existing Engineering & Manufacturing business segment, leveraging shared overhead, supply chain management, and operations post-integration. The combination of Kellstrom Defense’s product design engineering competencies with WAM’s manufacturing expertise is expected to yield increased legacy spare parts solutions for the global operator community. 

Houlihan Lokey served as exclusive financial advisor and placement agent for Kellstrom Defense, assisting the company in arranging, structuring, and negotiating the financing.