People with knowledge of the matter have disclosed that Veritas Capital is considering selling off two high-tech portfolio companies, which have a valuation of about $3 billion in total. The private equity firm based in New York is trying to raise cash for funding new deals this fall. The US aerospace and the M&A landscape related to defense will see a major boost with the potential sales of radar component maker Anaren Inc. and electronics component maker Excelitas Technologies Corp. The industry has only seen deals worth $1 billion so far, which is about 46% less than deals made in the same period last year.
Investment bank Goldman Sachs Group Inc. has been hired by Veritas for pursuing a so-called dual track sales procedure for Excelitas. The people said that this meant that the Massachusetts-based firm could be floated through an initial public offering or may also be sold outright. They also added that if they were successful, Veritas would actually be able to make about $2 billion from Excelitas alone. Having investments in numerous tech-sector assets and a number of national security assets, the private equity firm has also hired bankers for offloading Anaren in a different deal. The people said that this company could fetch them about $800 million.
The sources revealed this information on the condition of anonymity as they were not authorized to disclose it. All the companies in question did not comment. Products such as flash lamps and light-emitting diodes (LEDs) are made by Excelitas, which are used in a number of applications ranging from aerospace to medical lighting and defense equipment. As far as Anaren is concerned, it produces microwave components for space, wireless and defense electronic providers and its customers include names such as Northrop Grumman Corp, Lockheed Martin Corp and Raytheon Co.
The microwave assemblies of the New York-based firm are utilized in the United States’ Long Range Discrimination Radar (LRDR). This is the system that’s being developed by the US military for tracking intercontinental ballistic missiles that are launched from countries such as North Korea. This year, there has been a slowdown in deals in the defense and aerospace industry after asset prices soared when President Donald Trump won the election. Therefore, buyers had decided to put off deals. However, there is a mega-deal in the works worth $20 billion between two aircraft parts-makers Rockwell Collins Inc. and United Technologies Corp, which had been reported on August 4th.
Veritas may fare better in the barren landscape as there are a numerous cash-rich buyers who are on the lookout for assets. But, bankers have said that there may also be intense scrutiny by the US regulators due to the sensitive nature of the technology. Excelitas was created by Veritas in 2010 when it acquired the former detection and illumination solutions business of PerkinElmer Inc. It purchased the scientific equipment maker for $500 million. Previously, Veritas had attempted to sell Excelitas once before in 2014, but hadn’t been able to reach a deal with anyone.