Transactions
January 25 2021
KippsDeSanto & Co. Advises Physical Optics Corporation on its Sale to Mercury Systems, Inc.
KippsDeSanto & Co. is pleased to announce the sale of its client, Physical Optics Corporation (“POC” or the “Company”) to Mercury Systems, Inc. (“Mercury”).
Headquartered in Torrance, CA, POC serves as a leading designer, developer, and integrator of advanced technologies primarily focused on mission-critical avionics and subsystems for the most demanding defense applications, supporting airborne solutions broadly transferable to ground, maritime, and unmanned platforms. The Company’s principal expertise in optimizing size, weight, and power (“SWaP”) and enhancing encryption capabilities for the most complex and demanding avionics solutions has produced a robust portfolio of innovative products – much of which was developed leveraging the Small Business Innovation Research (“SBIR”) program – including data transfer systems, flight data recorders, mission computers, high-definition data and video recorders, and advanced encryption devices for well-funded and highly-visible programs of record. The common-use nature of POC’s technologies directly translates into broad adoption across the Navy, Army, and Air Force for newly fielded platforms (including burgeoning positions on future vertical lift, the B-2, and various unmanned platforms), as well as established relationships upgrading legacy aircraft (including the F-18, V-22, the H-60 family, T-45, F-16, F-15, and F-22).
Employing approximately 350 employees, including over 160 multi-disciplinary engineers and a deep bench of PhDs, POC has developed a substantial portfolio of intellectual property (“IP”), including over 160 patents as well as numerous SBIR-oriented technologies covering 60 diverse focus areas spanning avionics, electronic warfare, artificial intelligence, and machine learning. POC’s unique combination of avionics solutions, core IP and engineering expertise, embedded status on well-funded airborne programs, and state-of-the-art facilities uniquely position the Company to complement Mercury’s existing capabilities and accelerate the combined company’s growth via the delivery of pre-integrated avionics subsystems to an increasingly broad customer set.
We believe this transaction demonstrates several key trends in the aerospace and defense mergers and acquisitions (“M&A”) market:
• Defense program modernization continues to be an area of significant interest for buyers given the evolving budgetary environment
• Demand for companies with entrenched positioning on well-funded Programs of Record (“PoRs”) and trusted customer relationships remains strong
• Ongoing M&A focus by strategic buyers on acquisition targets with advanced engineering capabilities, proprietary IP, SBIR-oriented technologies, and robust Research & Development capabilities
• Public strategic buyers continue to aggressively deploy capital in order to accelerate organic growth strategies and gain access to PoRs and customers
LEAD INVESTMENT BANKERS
KippsDeSanto & Co. is pleased to announce the sale of its client, Physical Optics Corporation (“POC” or the “Company”) to Mercury Systems, Inc. (“Mercury”).
Headquartered in Torrance, CA, POC serves as a leading designer, developer, and integrator of advanced technologies primarily focused on mission-critical avionics and subsystems for the most demanding defense applications, supporting airborne solutions broadly transferable to ground, maritime, and unmanned platforms. The Company’s principal expertise in optimizing size, weight, and power (“SWaP”) and enhancing encryption capabilities for the most complex and demanding avionics solutions has produced a robust portfolio of innovative products – much of which was developed leveraging the Small Business Innovation Research (“SBIR”) program – including data transfer systems, flight data recorders, mission computers, high-definition data and video recorders, and advanced encryption devices for well-funded and highly-visible programs of record. The common-use nature of POC’s technologies directly translates into broad adoption across the Navy, Army, and Air Force for newly fielded platforms (including burgeoning positions on future vertical lift, the B-2, and various unmanned platforms), as well as established relationships upgrading legacy aircraft (including the F-18, V-22, the H-60 family, T-45, F-16, F-15, and F-22).
Employing approximately 350 employees, including over 160 multi-disciplinary engineers and a deep bench of PhDs, POC has developed a substantial portfolio of intellectual property (“IP”), including over 160 patents as well as numerous SBIR-oriented technologies covering 60 diverse focus areas spanning avionics, electronic warfare, artificial intelligence, and machine learning. POC’s unique combination of avionics solutions, core IP and engineering expertise, embedded status on well-funded airborne programs, and state-of-the-art facilities uniquely position the Company to complement Mercury’s existing capabilities and accelerate the combined company’s growth via the delivery of pre-integrated avionics subsystems to an increasingly broad customer set.
We believe this transaction demonstrates several key trends in the aerospace and defense mergers and acquisitions (“M&A”) market:
• Defense program modernization continues to be an area of significant interest for buyers given the evolving budgetary environment
• Demand for companies with entrenched positioning on well-funded Programs of Record (“PoRs”) and trusted customer relationships remains strong
• Ongoing M&A focus by strategic buyers on acquisition targets with advanced engineering capabilities, proprietary IP, SBIR-oriented technologies, and robust Research & Development capabilities
• Public strategic buyers continue to aggressively deploy capital in order to accelerate organic growth strategies and gain access to PoRs and customers
LEAD INVESTMENT BANKERS
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