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Acorn to Lead Investment of $50 Million in Aerospace Sector
Receives support from the Oklahoma Capital Investment Board
Acorn Growth Companies. November 12, 2007
Oklahoma City - Acorn Growth Companies today announced plans to deploy $50 million in private equity capital within the aerospace and defense composite manufacturing segment. Together with its equity and debt partners, the firm expects a total capital outlay exceeding $150 million over the next two years. The announcement comes on the heels of the formal closing of the firm’s third aerospace private equity fund.
Acorn’s plan is to leverage equity capital to acquire between 10 and 12 firms with combined top line revenue exceeding $200 million and annualized EBITDA exceeding $35 million.
“We are very excited about the opportunities associated with this strategy,” said Rick Nagel, a Partner in Acorn. “The composite sector is highly fragmented and ripe for a thoughtful and strategic approach designed to increase top line revenue growth, maximize value and create operating efficiencies,” he said.
According to aerospace market research firm Aerostrategy, the aerospace composite market is expected to double during the next decade and then double again a decade later, making the sector a $30 billion market opportunity by 2026.
“The market for composites is being driven by the need to reduce weight, fuel consumption and maintenance costs for aircraft. The Boeing 787 and Airbus A380 and their use of composites are the primary market influencers today. The sector has definitely reached an inflection point and will continue to grow at an amazing pace,” according to Jeff Davis, also a Partner in Acorn.
“We believe we have the relationships and expertise in these sectors that will allow us to identify opportunities that might go unnoticed by those less familiar with these industries, said Jeff Davis. “We are appreciative of the help and encouragement we received from the state of Oklahoma through the Oklahoma Capital Investment Board (OCIB) who made a $1 million commitment to Acorn.”
“Acorn has strong ties within the Oklahoma aerospace industry,” said Devon Sauzek, Oklahoma Capital Investment Board President. “The fund’s investment strategy once, executed, should strengthen this burgeoning industry with the end result being more jobs and economic growth in our state.”
According to Nagel and Davis, Acorn’s Oklahoma base is an ideal location for the execution of the strategy, citing the strong aerospace sector and robust composite activity already in the State.
Acorn Growth Companies, based in Midwest City, Oklahoma, is an investor in aerospace and defense businesses across the United States. Acorn has positioned itself as a gateway for the strategic deployment of capital within these niche investment areas by aligning itself to co-invest with larger private equity firms from both coasts seeking to diversify their holdings and enter the aerospace sector.
Jeff Davis, Partner