Advanced composites developer and manufacturer Hexcel Corp. [HXL] has agreed to acquire ARC Technologies, which supplies composite materials that absorb electronic signals, for $160 million.
Massachusetts-based ARC’s radio frequency and electromagnetic interference shielding materials are used form military, aerospace and industrial applications. Some of the company’s primary customers are Lockheed Martin [LMT], Northrop Grumman [NOC], Raytheon [RTN] and Britain’s BAE Systems, which are also customers of Hexcel, a spokeswoman for Hexcel told Defense Daily.
“ARC Technologies is a leader in materials science with talented people and a culture that is a strong fit with ours,” Nick Stanage, chairman, president and CEO of Hexcel, said in a statement. “This acquisition will combine two great research and technology teams to further develop next-generation products for both commercial and military aerospace and defense applications.”
Hexcel, which is based in Connecticut, said that in addition to strengthening its capabilities in RF absorbing materials, it expands its portfolio in thermoplastics and specialty composites, and adds capability in dielectric and Magnetic Radar Absorbing Material products.
ARC has about 170 employees and is expected to generate $50 million in sales this year.
Hexcel said the acquisition, which is expected to close in early 2019, will be accretive to its earnings in 2019. The purchase price represents a multiple of 11.9 times adjusted operating earnings for 2018.
ARC’s financial advisor on the deal is Philpott Ball & Werner.