It’s no longer just Uncle Sam calling for support of the U.S. military; it’s the stock markets, too. Yet another aerospace/defense company has filed for an initial public offering, and another buyout firm is in on the deal. The filing of Vertex Aerospace Inc. (dba Raytheon Aerospace Inc. until the offering) is the fourth so far this year, following the trend started last year when four other aerospace/defense companies filed in the fourth quarter. Five of those filings have resulted in a flotation so far, with the largest being United Defense Industries Inc.’s (NYSE:UDI) $402.8 million offering.
Vertex, which filed its S-1 last month, anticipates an offering of $150 million. The transaction is lead managed by Credit Suisse First Boston and Goldman Sachs & Co. Lehman Brothers and CIBC World Markets are co-managers. Vertex, based in Madison, Miss., proposed the symbol VRT for its offering on the Nasdaq. The pricing date has yet to be named.
Vertex, which reported revenue of $500.4 million in 2001, provides aerospace and other technical services to U.S. government agencies including the Air Force, Army, Navy, Marine Corps, Customs Service, Drug Enforcement Administration and NASA. Those services include logistics support, maintenance, repair and overhaul, supply chain management and pilot training, as well as worldwide mission critical support for such aircraft and defense-related platforms as the Apache helicopter, B-2 Spirit stealth bomber, and the Patriot missile system.
Like Integrated Defense Technologies (NYSE:IDE), which held a $154 million offering in February, Vertex is a portfolio company of New York-based buyout firm Veritas Capital. Vertex and Integrated Defense Technologies received mezzanine financing from private equity firms Albion Alliance LLC and Whitney & Co., respectively. Private equity firms also backed almost all of the other aerospace companies that hit the market in the last eight months. The Carlyle Group, a Washington, D.C.-based buyout firm that has been seeking defense acquisitions for some time counted two among its portfolio: United Defense Industries Inc., which floated in December 2001, and U.S. Marine Repair Inc. (NYSE:UMX), which filed in March 2002 and withdrew its offering last week to sell to United Defense. New York-based Caxton-Iseman Capital Inc. took public Anteon International Corp. (NYSE: ANT) in March for $270 million, and Australian private equity firm NBC Capital Pty. Ltd. floated ManTech International Corp. (NNM:MANT) in February for $115.2 million. Verint Systems (NNM:VRNT) and MTC Technologies (NNM:MTCT) are the only two of these companies that floated without private equity backing.
According its S-1, Vertex has achieved a 100% success rate in retaining its contracts that have become subject to recompetition and won approximately one-third of contracts for which it competed against an incumbent.
Performance of the other aerospace/defense companies that went public recently bodes well for Vertex. All but Verint, which provides analytic software for communication interception, video surveillance and business intelligence, are trading at least 6% above their opening price and at least 28% above their IPO price.
Contact Christa Fanelli at:
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