UK mid-market buyout firm ECI has sold Racal Acoustics to Esterline Technologies Corporation for £115m.
Based in Harrow, Racal Acoustics is a provider of hearing protection and communications products for military and avionics applications. Its headsets are used by 120 branches of the military in more than 80 countries and the firm’s latest claim to fame is that Prince Harry used a Racal headset during his recent tour of duty in Afghanistan.
ECI first invested in the business in 2005, backing the management team in a buyout from JF Lehman, a US private equity investor. Under ECI’s stewardship, the business has seen revenues grow by 110% from 2004 to 2008, with profits rising almost 150%. The business has a record order book that will drive continued growth next year and into the medium term.
The MBO team was led by Geof Eeles, CEO of Racal Acoustics, along with sales director Terry Buckley, finance director David Watton and operations director Paul Watson.
Director of ECI, Ken Lindsay, said: “The current climate is clearly more challenging for private equity generally both in buying and selling businesses. However, the sale of Racal Acoustics shows that the private equity model can continue to deliver strong business performance and good investment returns for investors.”
Despite market conditions ECI has had a successful few months. The firm recently closed is ninth fund on £430m, beating its target of £400m, which brings the capital under management to over £880m.
The exit of Racal Acoustics is the first exit ECI has made since December 2007, when it sold Bounty, a UK parenting club aimed at new and expectant mothers, for £70m to Kaboose, a family-focused online media company based in Toronto, Canada.