El Segundo-based Kellstrom Defense Aerospace Inc. has been sold to a Northern California-based competitor but will keep its ties to Los Angeles County as part of a portfolio managed by Odyssey Investment Partners in Woodland Hills.
Kellstrom specializes in engineering and manufacturing parts used to refurbish older military aircraft and helicopters, as well as distribution and repair of OEM spare parts.
The company has about 400 employees and facilities in Camarillo, Chatsworth and Chula Vista as well as in Georgia, Florida, the United Kingdom, Australia, Singapore and the United Arab Emirates. Its customers include Lockheed Martin Corp., Raytheon Co. and Northrop Grumman Corp.
Kellstrom’s new parent, Livermore-headquartered Aero Precision Holdings, which was acquired by Odyssey in 2016, offers similar parts distribution services, but mainly for international clients. Aero has about 300 employees and finished 2019 with about $175 million in revenue from a client roster that includes Honeywell International Inc., Collins Aerospace, CEF Industries and Eaton.
Kellstrom Chief Executive Chris Celtruda declined to provide financial terms of the deal, which was announced March 2, but said the combined company is “on a path to be a $500 million business by the end of this year.”
Kellstrom’s previous owner, a consortium of private equity groups that included Pittsburgh-based PNC Mezzanine Capital, brought Celtruda on board to run Camarillo-based Merex Group as that company was preparing to acquire Kellstrom in 2014. Since then, he has pursued eight acquisitions that helped Kellstrom reach $200 million in revenue last year.
The growth was spurred in part by the U.S. government’s increased reliance on older airplanes like the F-16, according to Celtruda, because newer aircraft such as the F-35 or the P-8 Poseidon “are so incredibly expensive.”
“There’s so much technology in them that even our Air Force, our Navy, is electing to fly some of the older aircraft longer,” he said, adding that military planes have 40-50 years of usable life, and Kellstrom engineers parts that have become obsolete.
Celtruda and his counterpart at Aero Precision, Darryl Mayhorn, spent the last couple of weeks “standing side-by-side” and talking with employees, customers and suppliers.
“So far, the feedback is very positive,” said Celtruda, who will continue in the role of chief operating officer. “Both companies weren’t small businesses anymore, but they weren’t really large businesses. We were kind of what I would call in-between, and some of the customers worry when you’re in between if you have the financial strength to be there for the long haul.
“Also with the combination of all the products that we can now bring to market, a lot of customers now view us as a one-stop shop where before (they would) have to go to two or three guys to get what they need. That drives some efficiencies in terms of their supply chain management,” he added.
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