Air travel continues to expand rapidly, leading to the so-called ‘super cycle’ in aerospace manufacturing, and the industries that facilitate this growth, aerospace and aviation, are enjoying sustained high rates of growth. The industry is characterised by long-term supplier relationships as a result of record production backlogs and long in-service times for aircraft and engines.
The military aerospace market is also beginning to grow significantly once more as are the services and technologies that allow crowded airspace and airports to function at maximum capacity, which include passenger management software, air traffic management and passenger screening systems.
The complexity of what is a truly global market with extended international supply chains, unique commercial characteristics and, in some cases, the introduction of new and disruptive technology, makes the challenge of identifying and developing new growth opportunities a complex exercise.
Although primarily focused on defence and security, the Platform Solutions Business Unit had developed significant capability in power management systems for military and civil transport vehicles.
With an eye to the growing civil aerospace market, the business wanted to explore the possibility of using its power management system technology for civil aircraft, an increasingly vital aspect of aircraft design in the C21st.
Victanis consolidated its analysis and provided detailed options and recommendations for a market entry strategy either through partnership or acquisition.
Silverfleet is a leading European mid-market Private Equity fund. Silverfleet was interested in an aerospace engine pipe and ducting company that was part of Avingtrans plc and became known as Sigma Components following the completion of the process.
Victanis delivered a precise and targeted Commercial Due Diligence project in two phases. Phase 1 included modelling the global market and market shares for engine pipes and aircraft ducting and Phase 2 involved a rigorous customer referencing.
The emphasis on Victanis’ initial brief was to build a detailed model that would value the total market across four product areas, identify the demand by engine and aircraft platform as well as to estimate market shares for companies in these areas. This competitive environment analysis was also to form an initial assessment for future potential acquisition targets to further expand the business.
Finally, we undertook a comprehensive customer referencing interview programme, conducting ten face-to-face interviews with key customers such as Rolls Royce, Bombardier, Bombardier and PFW. Our deep sector knowledge and expert judgment helped Silverfleet significantly in their investment process and our ability to answer detailed questions from a variety of prospective debt providers helped accelerate the acquisition process.
Furthermore, the level of detail and insight was such that Victanis’ analysis formed the basis for evaluating the strategic options for the business after the transaction was completed.
Victanis know their sectors inside and out which enabled them, in a very short time frame, to deliver a comprehensive and structured piece of due diligence that made Sigma's positioning, strategy and future prospects easy to understand. Their work was a highly valued part of our investment process, but will also now be a valuable resource for Sigma’s management as the company looks to exploit new opportunities in the future.