Private equity firm L Squared Capital Partners says it will step up investment in aerospace, space and defense, and it’s hired Air Force combat veteran Philip Gunn to lead the effort.
L Squared says it wants to take advantage of various “macro tailwinds,” including expanding defense and space budgets and President Donald Trump’s planned Golden Dome missile defense system.
The Newport Beach-based firm said it is creating a “purpose-built buy-and-build platform targeting the future of national security and defense.”
The investments will have an “emphasis on strategic programs, component technology for critical systems and modeling, simulation, test and training.”
Gunn, whose title is “operating executive, most recently led business development efforts in both strategic partnerships and M&A as a vice president at Raptor Scientific of Berlin, Ct.
“We anticipate acquiring several complementary ASD (aerospace, space and defense) suppliers as part of this strategy, with an initial focus on companies generating $3 million-30 million of EBITDA,” the firm said on May 6.
Looking to Acquisitions
“The national security environment has shifted decisively, with modern defense requirements moving insatiably towards speed of delivery and cost-effective solutions,” Gunn said in the May 6 statement announcing his appointment.
He sees a “generational opportunity to assemble a differentiated portfolio of specialized businesses at the intersection of modeling, simulation, test & training, and mission-critical component technology,”
More details will be released in the future.
Sean Barrette, an L Squared Capital managing partner, told the Business Journal on May 9 that the company is not providing any more details for now beyond its press release. “We will have more to say as we complete acquisitions and announce additional team members.”
Focused Acquisitions Seen
L Squared said its investment framework will pursue focused acquisitions of middle-market suppliers to key government and commercial customers in the aerospace, space and defense (ASD) market.
“We view ASD as an under-invested sector today with significant opportunity to consolidate fragmented suppliers and build a scaled platform with enhanced cross-functional engineering, supply chain resiliency, and manufacturing capacity,” the firm said.
L Squared says its general criteria call for investing in companies with an enterprise value of $50 million to more than $500 million.
The firm says it has approximately $5.3 billion of historical cumulative capital commitments.
L Squared seeks to make long-term investments in leading growth companies operating in targeted sectors: education technology, technology-enabled services and software, and industrial technology and services.
