Aero Precision Buys Kellstrom Defense To Become Military MRO Powerhouse

Credit: USAF

Private equity investors are combining Aero Precision and Kellstrom Defense, both military aircraft MRO specialists, to become “one of the largest privately owned military aftermarket distribution businesses in the industry,” the companies said March 2.

Aero Precision acquired Kellstrom of El Segundo, California. Financial and operational details were not provided. The combined company will serve a portfolio of military aircraft including the C-130, UH-60, F-15, F-16 and F-18.

Aero Precision Holdings comprises three major brands: DAC International, NASAM and Aero Precision Industries, and is owned by a fund managed by private equity investors Odyssey Investment Partners. Kellstrom Defense was created in 2014 when PE investors Dubin Clark & Co., Barings and PNC Equity teamed to buy out the previous owners of Kellstrom Defense assets. Since then, Kellstrom Defense—headed by CEO Chris Celtruda—has continued to bolt on companies, including nearby Airborne Technologies last November.

Kellstrom Defense was started in the wake of federal budget caps stemming from the 2011 Budget Control Act. As annual defense budgets looked set to be cut—ultimately they were just limited—Kellstrom owners saw an opportunity to roll up military MRO assets. At the same time, the company became a niche provider of parts and sustainment for a swath of legacy military aircraft that prime OEMs no longer were focused on maintaining.

Celtruda has spoken at several past Aviation Week conferences and regularly advised audiences on the importance of making sure the cultures of M&A buyers and sellers matched. He also stressed the importance of hiring and trusting quality executives to run their business units, and making sure the basics of contracting were met, starting with reliable delivery to customers.

“The combination of Aero Precision and Kellstrom Defense’s aftermarket solutions and expanded global channel will ensure our government and military aviation customers worldwide receive improved mission readiness through ample support capabilities,” Celtruda said in the announcement. “We look forward to a rapid integration of the business teams and are working to exceed customer expectations in the coming months.”

Michael Bruno

Based in Washington, Michael Bruno is Aviation Week Network’s Executive Editor for Business. He oversees coverage of aviation, aerospace and defense businesses, supply chains and related issues.