ECI invests in Racal

ECI Partners backed the MBO of UK-based Racal Acoustics for £52m. The business was acquired from JF Lehman & Co, a US-based private equity investor that acquired Racal from Thales Group in 2004. The transaction was completed within two weeks of ECI being granted exclusivity.

Racal Acoustics is the global market leader in the manufacture and supply of “ruggedised” specialist personal communications equipment for the defence and avionics sectors. Its products are designed to protect hearing and enhance communication in very high ambient noise environments. Its products are used in a wide range of military vehicles, including Humvees, and Chinook, Goshawk and Sea King helicopters.

Following the MBO, Racal expects rapid revenue growth over the medium term as existing military programmes around the world continue to progress and as new programmes come on stream. As well as organic growth, it expects to make substantial acquisitions of businesses selling complementary products into the military, avionics and security markets.

ECI backed the incumbent management team of Racal Acoustics. This team is led by Geoff Eeles, managing director, and includes Terry Buckley, sales director, and David Watton, financial director. The management team have made sizeable personal investments in the MBO and will hold a substantial minority stake in the company going forward.