ECI sells Kelvin Hughes to HENSOLDT

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ECI Partners today announces the sale of our investment in Kelvin Hughes to HENSOLDT (formerly Airbus Defence Electronics), generating an above 3x return on its investmentCompletion of the transaction remains subject to regulatory clearances.

“Following the buyout from Smiths Group, ECI has been a consistent and supportive partner as we have consolidated our position as a global leader in surveillance and security radar solutions,” said Russell Gould, CEO of Kelvin Hughes“With the support of ECI, we have developed cutting-edge technologies, introduced new solutions and expanded our global reach across 60 countries.  We are excited to partner with HENSOLDT on the next phase of Kelvin Hughes’ growth, benefiting from its expertise and capabilities in sensors to offer additional services to our clients and further opportunities to our employees.”

“It has been a great pleasure working with Russell and the management team at Kelvin Hughes,” said Sean Whelan, Managing Partner at ECI. “They are a very experienced management team with deep sector knowledge and have done a fantastic job growing Kelvin Hughes in the surveillance and security markets, while strengthening the company’s leadership in state-of-the-art radar technology. Today Kelvin Hughes is well positioned for the future and we wish the team every success as they continue to grow the business with HENSOLDT.”

Kelvin Hughes provides navigation, radar and surveillance solutions to some of the world’s foremost navies and coastguards, as well as to civil infrastructure and commercial marine clients. With a heritage dating back over 250 years, Kelvin Hughes has an unprecedented list of technology firsts: the Company developed the world’s first commercial radar in 1947; and more recently has developed SharpEye™, the world’s first commercially available solid-state radar (which provides smaller target detection and improved power efficiency). Kelvin Hughes’s client roster includes the UK Ministry of Defence, the US Department of Defense and the Royal Australian Navy, among others.

Since ECI’s investment, Kelvin Hughes has focused its operations on Surveillance Systems (solid-state radars used by navies and coastal surveillance systems) and Security (land-based radar systems primarily for border security and critical infrastructure protection). Proprietary innovation in signal processing technology has enabled Kelvin Hughes to continuously evolve its radar products and their applications.

Kelvin Hughes has successfully expanded its product portfolio and accelerated revenue growth in recent years. Highlights over the period include:

  • Delivering a 2013-16 revenue CAGR of c. 20% in Surveillance Systems and Security; 
  • Launching SharpEye™, the world’s first affordable and commercially available solid-state radar, which is used by more than 25 of the world’s navies;
  • Winning a contract to supply the Royal Navy with modern solid-state radar equipment for much of its fleet;
  • Selling ChartCo, a leading supplier of digital navigation and voyage compliance services to the marine industry, in 2016 for £55 million; and
  • Establishing a new state-of-the-art design and manufacturing facility in Enfield, North London, spanning more than 69,000 square feet.

The business is headquartered in Enfield and has sales offices in Washington DC, Singapore, Rotterdam and Copenhagen. The group currently employs c.200 globally with a dedicated engineering and R&D team of 55 with significant technical expertise.

Other ECI investments in the industrials space include Clarke Energy, a global leader in engines and power generation systems which ECI sold in February 2017. and Nuaire a leading manufacturer and UK-market leader in energy-efficient domestic and commercial ventilation solutions, which was sold in 2007. 

Rothschild acted as financial adviser to ECI and Kelvin Hughes