News & Events

KippsDeSanto & Co. Advises NEK Advanced Securities Group, Inc. on the Sale of its Special Programs Group to Cubic Corporation


KippsDeSanto & Co. is pleased to announce the sale of NEK Special Programs Group (“NEK SPG”), the Special Operations Forces (“SOF”) training business of our client, NEK Advanced Securities Group Inc., to Cubic Corporation (“Cubic”).  The transaction expands Cubic’s national security business with respect to advanced tactical training, surveillance and counter surveillance, mission planning, and personnel recovery, providing access and placement to a coveted and difficult-to-penetrate customer set.

With significant operations in Colorado Springs, CO, and Fayetteville, NC, NEK SPG provides highly specialized, mission-critical training in support of the four component commands of United States Special Operations Command (“USSOCOM”), the Joint Special Operations Command (“JSOC”), select Theater Special Operations Commands (“TSOCs”), and a variety of intelligence community customers.  NEK SPG provides hands-on, practical training, tailored for personnel involved in highly stressful and hostile environments, creating an unparalleled training environment that simulates real-world Unconventional Warfare (“UW”) activities.  The Company delivers comprehensive programs and services that utilize a full spectrum of commercial and government sector assets to address the increasing demand for UW, Counterterrorism, and Counterinsurgency training required by SOF, the Department of Defense (“DoD”), and other elements of the U.S. Government.  NEK SPG’s broad portfolio of capabilities, coupled with extensive operational experience within the key components of USSOCOM, allows for unique visibility and understanding of emerging mission requirements at a tactical, operational, and strategic level.  We believe this transaction demonstrates several key trends in the aerospace/defense and government services M&A environment:

  • Highly specialized solutions providers in mission-critical areas remain in high demand despite overall budget and funding environment concerns
  • Shifting budgetary allocations and pressures continue to prompt companies to supplement growth through strategic acquisitions within priority pockets of budget funding (e.g. SOF)
  • Strategic buyers continue to target M&A opportunities that address strategic gaps or augment an existing presence with specialized solutions that cannot be easily replicated internally

KippsDeSanto & Co. is an investment bank focused on delivering exceptional M&A and financing transaction results for leading technology and aerospace/defense companies. For more information on KippsDeSanto & Co., please visit www.kippsdesanto.com.

We welcome the opportunity to discuss how KippsDeSanto & Co. can help you achieve your strategic objectives. For more information on this particular transaction, please contact one of the deal team leaders below.

KippsDeSanto & Co., member FINRA/SIPC, is not affiliated with other companies mentioned herein.

PRESS RELEASE

Cubic Corporation Acquires Assets of NEK Advanced Securities Group

Purchase will expand company’s national security business 

SAN DIEGO, California – December  17, 2012 Cubic Corporation (NYSE: CUB) has acquired from NEK Advanced Securities Group, Inc. the operating assets of its NEK Special Programs Group, LLC subsidiary, their Special Operation Forces training business based in Fayetteville, NC and Colorado Springs, Colo. The all-cash transaction closed on December 14, 2012 with a total consideration of $52 million subject to the terms of the purchase agreement.

The assets are being acquired by NEK Services, Inc., a wholly owned subsidiary of Cubic Corporation, and will operate under the leadership of Jim Balentine, President of Cubic Mission Support Services.  The more than 200 highly skilled and experienced operational and technical experts of NEK’s Special Operations Forces training business will become employees of Cubic and significantly expand the company’s current knowledge base in advanced tactical training, surveillance /counter surveillance, mission planning, and personnel recovery.

“The NEK acquisition will help solidify and expand Cubic’s highly specialized, mission critical capabilities focused on the national security market,” said Jay Thomas, Senior Vice President of Finance and Corporate Development for Cubic Corporation. “NEK is one of the few private contractors specializing in mission critical training and direct support activities for the United States Special Operations Command, Joint Special Operations Command and Theater Special Operations Command units,” he added.

“NEK is recognized for its record of unmatched experience and achievement in support of the Special Operations Forces community,” Jim Balentine, President of Cubic Mission Support Services said. “We see many synergies associated with Cubic’s breadth of technologies and service offerings, and expect to further expand our business through these combined resources. This acquisition is in line with the Pentagon’s strategic goal of increasing special forces training to meet the needs of reduced military spending,” he said.

NEK is a leading provider of advanced and specialized courses for the United States Special Operations Command.  The leadership team consists of former Special Forces specialists averaging over 20 years of experience. Two key members of NEK’s senior leadership team, Bo Todd and Jeff Keers have been named as executives of the new Cubic subsidiary.  NEK Advanced Securities Group founders and Chief Executive Officers Bruce Parkman and Tony Porterfield will support the continued success of NEK Services, Inc. by serving as consultants to Cubic.

“By selling our NEK Special Programs Group subsidiary to Cubic, NEK has found a great company to carry on our history of providing our country’s elite service personnel with exceptional training and support,” said Tony Porterfield.  “Bruce and I look forward to helping Cubic continue to grow the Special Operations Forces business knowing that our dedicated and unparalleled employees will be well taken care of as part of the Cubic family of companies.”

Cubic’s Mission Support Services business unit employs approximately 4,400 employees worldwide. Mission Support Services employees assist clients in both training and operational environments. Their support of real-world events have helped prepare U.S. and allied forces to meet the full scope of mission requirements from large-scale combat to peacekeeping and humanitarian relief operations. Cubic’s current customers include the U.S. Department of Defense, all U.S. armed services, the Department of Homeland Security and selected allied nations.

Cubic Corporation is the parent company of three major business segments: Defense Systems, Mission Support Services and Transportation Systems. Cubic Defense Systems is a leading provider of realistic combat training systems, cyber technologies, asset tracking solutions, and defense electronics. Mission Support Services is a leading provider of training, operations, maintenance, technical and other support services. Cubic Transportation Systems is the world’s leading provider of automated fare collection systems and services for public transit authorities. For more information about Cubic, see the company’s Web site at www.cubic.com.

Cubic Corporation is the parent company of three major business segments: Defense Systems, Mission Support Services and Transportation Systems. Cubic Defense Systems is a leading provider of realistic combat training systems, cyber technologies, asset tracking solutions, and defense electronics. Mission Support Services is a leading provider of training, operations, maintenance, technical and other support services. Cubic Transportation Systems is the world’s leading provider of automated fare collection systems and services for public transit authorities. For more information about Cubic, see the company’s Web site at www.cubic.com.