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Magnaghi Aerospace Group completes transformational acquisition in the U.S. with the support of THCP

24 April 2018 Portfolio Insights

Rome, 24 April 2018 – Magnaghi Aerospace Group (“MAG” or the “Company”), a leading provider of landing gear systems and composite aerostructure components to helicopter and medium-sized aircraft platforms, has completed the acquisition of U.S.-based Blair-HSM (“Blair”) with the support of Three Hills Capital Partners (“THCP”).

MAG was founded in 1936 as a provider of landing gears to the Italian air force, and has diversified significantly over time under current owner and CEO, Paolo Graziano. Today the group manufactures (i) landing gears, hydraulic components and actuators to the rotary and fixed wing markets globally, (ii) composite aerostructure components, and (iii) Sky Arrow, a carbon fiber aircraft with multiple applications across law enforcement, defense and agriculture. In recent years the Company has invested significantly in its technological capabilities and transitioned from a tier 2, build-to-print supplier to tier 1, build-to-spec operator.

Blair is a manufacturer of landing gears and actuators, operating in a similar niche to MAG. Blair’s integration into MAG will allow the Group to expand its production footprint into the U.S. and gain a strong foothold in this market through Blair’s existing customer relationships. Blair will also benefit from MAG’s enhanced technological capabilities, as well as production efficiencies from the enlarged group’s operations across Italy, Brazil and the U.S..

The Group is also delighted to announce further strengthening of its management team with several industry veterans joining in recent months including Giorgio Zappa as Chairman (former General Manager of Leonardo and CEO of Alenia Aeronautica) and Marco Cavazzoni as Chairman of MAG Americas (former Vice President for Global Services and Support at Boeing).

THCP is supporting MAG through a tailored financing solution being a combination of debt and equity. The funds invested by THCP, together with significant further investment from MAG’s management team, will be used to both finance the acquisition of Blair as well as to explore additional growth opportunities (both organic and inorganic).

Paolo Graziano, CEO of Magnaghi Aereospace Group commented: 

I am delighted to welcome Blair to the MAG family. We have built a strong relationship with the team and have several interesting initiatives we are exploring already to improve current group production efficiencies to better serve our existing customers, as well as potential new growth opportunities. I am also very pleased to bring on board Three Hills as a partner for this next phase of growth, whose innovative financing solution has allowed us to align the interests of all stakeholders.

Paolo Graziano, CEO of Magnaghi Aereospace Group

Michele Prencipe, Partner of Three Hills Capital Partners said

We are pleased to support MAG in its expansion into the US market, and are excited to pursue further growth opportunities to accelerate both additional international expansion as well as organic growth initiatives. We look forward to continuing to support MAG’s growth and consolidating its position as the market leader in its niche.

Michele Prencipe, Partner of Three Hills Capital Partners

Mauro Moretti, Managing Partner of Three Hills Capital Partners, commented

Supporting successful entrepreneurs in accelerating their growth plans and providing them with a tailored made financing solution was the rationale behind the launch of our investment strategy ten years ago. MAG represents perfectly what we look for in target companies: innovation, an international footprint and growth opportunity, and a fully committed management team. We are thankful to Paolo and his team for letting us taking part to this journey.

Mauro Moretti, Managing Partner of Three Hills Capital Partners

MAG was advised by Dentons (Legal) and KPMG (Financial). THCP was advised by Gianni Origoni Grippo Cappelli & Partners (Legal), Alix Partners (Commercial), KMPG (Financial), PWC (Tax) and Clifford Chance (Structuring).

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