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US Veritas Capital sells Vertex Aerospace for $650m

US private equity firm, Veritas Capital, has agreed to sell Vertex Aerospace to L-3 Communications for $650m. The transaction is expected to be completed in December 2003.

Vertex is a leading provider of aerospace and other technical services to the Department of Defence and other government agencies including the Air Force, Navy, Army, Department of Homeland Security, Drug Enforcement Agency and NASA. Veritas acquired Vertex from Raytheon Company in April 2001 in a deal that valued the company at $270m.

‘Our investment in Vertex Aerospace and the agreement of its sale to L-3 are reflective of Veritas Capital's investment strategy of partnering with quality companies to create value for our investors and partners,' said Robert McKeon, chairman of Veritas Capital. ‘Since we acquired Vertex from Raytheon Company in 2001, we have grown sales and earnings at the company by 40 per cent and 66 per cent respectively. In the last two months alone we have won over $3bn in new business.'

This is Veritas Capital's second sale of a defence company in the past three months. The firm sold Integrated Defence Technologies to DRS Technologies for $550m in August.

‘We felt in both cases that we had added as much value as we could,' said McKeon. ‘At IDT, we grew a $37m company to a company with about $400m in sales. We grew Vertex fairly dramatically as well.'

Veritas Capital was founded in 1992 and invests in a broad range of companies through middle-market buy-outs, growth capital investments and leveraged recapitalisations. Other portfolio companies include TRAK Communications, CrossLink and Baltimore Marine Industries.

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