Warburg sells Survitec to Onex

The US-based firm will net a return of between 1.5x and 2x on the sale

Warburg Pincus has agreed to sell Survitec Group, a provider of mission-critical marine, defence and aerospace survival equipment, for £450 million (€576 million, $680 million) to Toronto-listed Onex Corporation, according to a statement.

The sale of the business, which is expected to close in the first quarter of the year, will net Warburg a return of between 1.5x and 2x, according to a market source. Warburg declined to comment beyond the statement.

Based in Southampton, UK, Survitec’s key products include inflatable lifesaving equipment designed to withstand harsh marine environments and survival suits designed for extreme thermal and pressure conditions. The company has more than 2,000 employees and operates seven manufacturing facilities around the world. For its most recent fiscal year, ended March 31, 2014, Survitec generated approximately £234 million in revenues.

Warburg Pincus acquired Survitec in 2010 for £278 million, using its Warburg Pincus Private Equity X, a $15 billion 2007-vintage. Under Warburg’s ownership, the company has strengthened the management team and operations. It also completed a number of strategic acquisitions which have increased the company’s product, service and geographic offering.

“Survitec is a pioneer in the survival technology industry, evidenced by its strong relationships with blue chip customers in the marine and aerospace segments, as well as defence departments around the world. We look forward to… continue to build on the company’s leadership position through continued service line expansion and strategic acquisitions,” Tony Morgan, a managing director in Onex’ London office, said in a separate statement.

Onex will use capital from its Onex Partners IV, a $5.15 billion vehicle which it closed above its $4.5 billion target in May 2013. The fund invest approximately $320 million of equity.

Onex, which has offices in Toronto, New York and London, has approximately $20 billion of assets under management. Since inception, the firm has built more than 75 businesses, completing approximately 465 acquisitions with a total value of approximately $51 billion.