Aeroflex Eyes a $500 Million IPO

Posted Apr 7th 2010 3:45PM by Tom Taulli
Filed under: Private Equity, Initial Public Offerings

Before going private in 2007, Aeroflex Holding had been a public company for 46 years. Well, now the company has filed for an IPO, planning to raise up to $500 million.

Aeroflex develops radio frequency and microwave circuits and components. The primary focus is on demanding applications, such as for space, avionics, defense and medical. As a result, the margins are fairly high.

Interestingly enough, Aeroflex often collaborates with its customers when developing technologies. The result is improved customization and performance. More important, it helps with ongoing innovation.

Aeroflex has also benefited from financial discipline, which has been critical during the recession. With the help of its private equity sponsors -- which include Veritas Capital, Golden Gate Capital and GS Direct -- the company has expanded its adjusted EBITDA margins from 20.3% to 24.2% over the past three years. In fact, the increased cash flow has allowed Aeroflex to invest in other high growth markets as well as pull-off acquisitions.

As for the customer base, it is top-notch. Aeroflex has long-term relationships with companies like BAE Systems, Boeing (BA), Cisco Systems (CSCO), Nokia (NOK), Northrop Grumman (NOC) and United Technologies (UTX).

The lead underwriters on the deal include Goldman Sachs (GS) and Credit Suisse (CS).

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: Aeroflex, Aeroflex IPO, inthenews