NEW YORK – December 23, 2020 – Cerberus Capital Management, L.P. (“Cerberus”), a global leader in alternative investing, today announced that one of its affiliates has signed a definitive agreement to sell Sparton Corporation (“Sparton”) to Elbit Systems of America, LLC (“Elbit Systems of America”).
Headquartered in De Leon Springs, Florida, Sparton is a leading defense supplier, providing a range of advanced proprietary products for domestic and foreign defense, and commercial needs. With decades of experience, Sparton has become the partner of choice to domestic and allied governments, as well as leading defense contractors.
Based in Fort Worth, Texas, Elbit Systems of America is a provider of high-performance products, system solutions, and support services to customers in the defense, homeland security, law enforcement, commercial aviation, and medical instrumentation markets.
“In partnership with Cerberus, we have taken significant steps to strengthen our platform and expand our capabilities,” said Bill Toti, Chief Executive Officer of Sparton. “As we begin our next chapter of growth, we look forward to the strategic combination with Elbit Systems of America and leveraging our combined expertise to further elevate Sparton’s market-leading position. Together, we will be able to deepen our relationships and deliver innovative solutions to meet our customers’ needs.”
Dev Kapadia, Senior Managing Director of Cerberus, added, “We are proud of all that we have accomplished together with Sparton, including the transformative separation of its two business segments. Now, as a pure-play defense supplier, Sparton is well-positioned to build on its strong foundation and drive the platform’s long-term growth. We are pleased that Sparton has found a strategic partner in the next phase of its journey and wish Bill and the entire Sparton team continued success.”
Cerberus acquired Sparton in 2019, and since that time, has partnered with the company to execute on several operational and strategic initiatives, including the recent separation of its defense products and contract manufacturing segments. The separation enabled each business, which operated in distinct industries with tailored strategies, to focus on its core strengths and respective opportunities. Following the divesture of the contract manufacturing segment, Sparton became a standalone, pure-play defense supplier, well-positioned to build on its track record of providing innovative products to the U.S. Navy, allied governments, and leading defense contractors.
The transaction will require customary closing conditions, including receipt of regulatory approvals.
Moelis & Company LLC and Evercore served as the financial advisors and Kirkland & Ellis LLP served as the legal advisor to Sparton. Covington & Burling LLP served as the legal advisor to Elbit Systems of America.
Founded in 1992, Cerberus is a global leader in alternative investing with over $48 billion in assets across complementary credit, private equity, and real estate strategies. We invest across the capital structure where our integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Our tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors. For more information about our people and platforms, visit us at www.cerberus.com.
Sparton designs, develops, and produces a range of advanced proprietary products for domestic and foreign defense, and commercial needs. The company is comprised of three divisions: Undersea Warfare Solutions, Aydin Displays, and Stealth. Sparton Undersea Warfare Solutions (“UWS”) division is a world leader in the design, development, testing and production of complex maritime systems, including mission-critical sonobuoys, in support of Anti-Submarine Warfare. Additionally, UWS manufactures other cutting-edge submarine deployed products supporting ASW and depth-rated encapsulated systems to support Subsea and Seabed Warfare. Sparton Aydin division is the industry leader in the design development, testing and production of ruggedized displays for military and industrial use. Sparton Stealth division is a leading manufacturer and supplier of industrial computer components, and industrial-grade small form factor PCs. Sparton’s website may be accessed at www.sparton.com.