ECI to generate 3.3x on radar company sale

The deal follows ECI 8’s divestment of Kelvin Hughes’ navigation arm last year.

London-based ECI Partners entered an agreement on Thursday to sell its investment in radar solutions business Kelvin Hughes for a 3.3x return, according to a statement.

The firm’s 2005-vintage ECI 8 fund originally acquired the Enfield-based company from Smiths Group for at least £48 million ($62 million; €55 million) in November 2007, according to a statement from Kelvin Hughes at the time.

ECI 8, a £255 million vehicle, attracted commitments from Greater Manchester Pension Fund and Schroders Investment Management, according to PEI data.

ECI will sell the holding to military sensor provider HENSOLDT, formerly Airbus Defence Electronics, for an undisclosed sum. The deal marks the firm’s second sale from the Kelvin Hughes Group, having divested its digital navigation division, ChartCo, for £55 million in June 2016.

“With the support of ECI, we have developed cutting-edge technologies, introduced new solutions and expanded our global reach across 60 countries,” Russell Gould, chief executive of Kelvin Hughes, said in the statement.

Kelvin Hughes employs around 200 staff globally, with sales offices in Washington, DC, Singapore and Copenhagen. The company delivered a 20 percent compound annual growth rate in surveillance systems and security between 2013 and 2016.

It has launched a radar system which is used by more than 25 of the world’s navies.

“Our portfolios and market access are highly complementary and we will see significant growth from this transaction,” Thomas Muller, chief executive of HENSOLDT, added.

In December ECI sold its stake in catering group Rhubarb for £75 million. The sale generated a 3x return to investors in its £430 million ECI 9.

The firm is investing its ECI 10 fund, a 2015-vintage that closed on £512 million, according to PEI data.