The Carlyle Group has agreed to buy ARINC, a transportation communications and systems engineering company, for an undisclosed amount. The company is primarily owned by major airlines.
Carlyle has been at the forefront of private equity activity this week. The firm agreed to pay $4.9 billion for healthcare services provider Manor Care and is reportedly planning a $22 billion bid for UK cable and mobile phone business Virgin Media. Carlyle also completed its float of a specialised debt fund on Amsterdam’s Euronext exchange, raising $300 million.
Annapolis, Maryland-based ARINC, which has 100 offices and 3,300 employees worldwide, had annual revenues of around $900 million last year.
Carlyle’s Ian Fujiyama, a managing director, led the transaction, which is expected to close in the third quarter of 2007.
“We believe that ARINC is well positioned to capitalise on several favorable macro trends in both its commercial and government market segments,” Peter Clare, managing director and head of Carlyle’s global aerospace and defence sector team, said in a statement.
The US firm currently holds nine companies in its aerospace and defence portfolio, and earlier this year Carlyle and UK aerospace group BAE Systems announced that they were preparing a bid for a UK nuclear submarine base.
The defence sector has been increasingly popular among private equity firms since the World Trade Center attacks dramatically furthered demand for defence-related products and services. This June alone, UK-based BC Partners purchased US satellite operator Intelsat for $16 billion, and UK-based Dunedin Capital Partners invested £8 million in a £16 million management buyout of Fernau Avionics, a maker of navigational equipment for civil and military action.
A number of firms focus entirely on defence investment, including GF Private Equity Group and New York-based JF Lehman.