Industries

Aerospace & Defense

Strong demand for next generation aircrafts, growing passenger traffic, and heightened security threats are a few of the challenges aerospace and defense (A&D) industry leaders face. Moreover, with increased pressure on military spending, departments and ministries of defense have started seeking vendors outside of the core defense industry, particularly technology firms, creating an even more competitive industry environment.

With increasing A&D industry challenges the pressure is on for companies to create realistic & viable business plans to plan for long-term success. We support aerospace, defense manufacturers and service suppliers, as well as prime contractors and subcontractors, in developing and executing their M&A strategies to improve operations and support growth. See how we can help you.

Back to Industries

Case Studies

Aerospace & Defense Team Members

Philip Kaestle

Managing Director

Carl Moore

Managing Director

John Halloran

Senior Director

×
×

Philip Kaestle

Managing Director

BiographyNotable Assignments

View vCard
Next

Industry Expertise

Philip Kaestle is a Managing Director at SierraConstellation Partners where he provides financial and operational advisory services to companies in transition. He has experience with balance sheet restructurings, interim executive management, operational turnarounds, identifying strategic opportunities, debt and equity capital raising, mergers and acquisitions, financial modeling and forecasting. Philip has worked in a variety of industries, including aerospace, apparel, distribution, entertainment, financial services, food and beverage, healthcare, industrial services, manufacturing, marketing, media, real estate and retail.

Philip has served in a variety of senior-level positions including Interim President, Chief Restructuring Officer, Interim Chief Financial Officer, Liquidating Trustee, Financial Advisor and Investment Banker to numerous middle-market companies and is particularly skilled at assisting clients through challenging situations.

Prior to joining SCP, Philip was an associate vice president in OneWest Bank’s Media and Entertainment Finance Group where he was responsible for structuring, underwriting and executing new senior debt transactions and recapitalizations for media and entertainment companies. He was also a senior financial analyst in OneWest Bank’s Commercial Real Estate Group, responsible for managing and liquidating non-performing real estate assets.

Before joining OneWest Bank, Philip was an associate at Arch Bay Capital, a Southern California-based real estate investment fund. He started his career as an investment banking analyst with Imperial Capital, LLC in Los Angeles.

In 2020, Philip received the M&A Advisor’s Emerging Leader Award, which recognizes leading M&A, financial and turnaround professionals who have reached a significant level of success while still under the age of 40. In 2022, Philip was named to the Turnaround Management Association Northwest Chapter Board of Directors.

Philip holds a Bachelor’s degree in Financial Economics from Claremont McKenna College and is one of the co-leaders of the Claremont McKenna College Seattle Alumni Chapter.

  • Liquidating Trustee and Chief Restructuring Officer to a distributor of alcoholic and non-alcoholic beverages where he raised senior debt through a refinancing of the company’s credit facility, then sold the assets of the company through a competitive process and completed the wind down despite ongoing litigation between the two shareholders.
  • Interim President and Chief Financial Officer to a dental laboratory manufacturing company where he rebuilt management and finance teams and significantly reduced operating expenses through a series of strategic initiatives despite a volatile operating environment.
  • Chief Restructuring Officer to a clinical-stage biopharmaceutical company which filed for Chapter 11 as a lawsuit with a former co-development partner was coming to a head. SCP led a settlement negotiation to resolve the litigation and is in the process of effectuating an orderly wind down of the business, which has already resulted in full repayment to the pre and post-petition lenders.
  • Chief Restructuring Officer and Interim Chief Financial Officer to a color marketing manufacturing company where he executed a series of cost reductions and operational improvements to increase profitability despite a challenging operating environment. He also assisted with the sale of the company, resulting in full repayment to the senior lender.
  • Chief Restructuring Officer and Interim Chief Financial Officer to an ethnic grocery store chain. Key responsibilities included cost reductions, vendor relations and cash management. He implemented a $12 million restructuring within a three-month timeframe which stabilized the business and allowed for a sale and subsequent recapitalization.
×

Carl Moore

Managing Director

BiographyNotable Assignments

View vCard
Next

Industry Expertise

Carl Moore, Managing Director and Head of the Dallas region at SierraConstellation Partners, has over 20 years of experience in distressed investing, private equity portfolio management, and the provision of advisory services to underperforming companies and companies in transition.

Prior to joining SCP, Carl had a 15-year career in the private equity, distressed investment and restructuring groups at Highland Capital Management in Dallas. Most recently, Carl served as the Co-Head of Highland’s Private Equity group managing a portfolio of 7 industrial and healthcare companies with a collective enterprise value of $700M. During and after the financial crisis, Carl co-managed a team of legal and investment professionals that led credit restructuring, amendment and related negotiations for the firm’s $25B+ leveraged loan and high-yield bond portfolio.

Prior to joining Highland, Carl practiced law as an associate with the law firms Brobeck, Phleger and Harrison and Looper, Reed & McGraw with a focus on financing and M&A transactions.

Carl graduated from the University of Texas at Austin with a BA in the Plan II Honors Program and a BBA in Finance, and then received a JD from the University of Houston Law Center. He is a member of the State Bar of Texas, and was licensed as a Certified Public Accountant (currently inactive).

  • Served as CRO of GDC Technics, a Fort Worth aerospace company focused on complex interior modifications and connectivity solutions for wide-body aircraft. SCP helped the client navigate a contentious bankruptcy process during which it completed an expedited transition into two new lines of business, settled a major lawsuit with a former contract counterparty, and sourced exit financing from a sponsor-backed customer that supported its post-emergence business plan.
  • Served as Interim Management for a Dallas-based distributor of fuel and lubricants. The client faced significant pressure from fluctuating commodity prices, customer concentration in oilfield service clients, and a thinly-staffed central management team. SCP improved reporting and internal controls, led communications and negotiations with the client’s main vendor and asset-based lender, and assisted the sourcing and onboarding of a permanent CFO.
  • Served on a SCP team that was the CRO for a Silicon Valley-based digital medicine company. In addition to customary bankruptcy-related matters, oversaw an extensive IP sale and technology transfer process to a former strategic partner.
  • Served as Chairman of the Board of a major chauffeured transportation portfolio company. Took an operational role in efforts related to the transition from an independent operator to employee business model and related litigation in several jurisdictions, as well as a comprehensive strategic and SG&A overhaul resulting in significant EBITDA improvement.
  • Served as Board member and worked with investment professionals and portfolio company management team to prepare a healthcare DME company for sale under an expedited time frame and intensely competitive industry environment. Managed multi-party negotiations with the Seller’s stakeholder group and a foreign strategic buyer. The sale resulted in significant value realization in the face of rapidly deteriorating subsector dynamics.
  • As Chairman of a development stage medical device company, led team that overhauled the finance function as well as provided operational guidance for its commercialization efforts. Led negotiation for distribution agreement with, and ultimate sale to, a major medical device company.
×

John Halloran

Senior Director

BiographyNotable Assignments

View vCard
Next

Industry Expertise

John Halloran, a Senior Director at SierraConstellation Partners, provides interim management and operational and financial advisory services to underperforming companies and companies in transition. He leverages a growing track record at SCP and prior experience as a management consultant and private equity investor to help middle-market companies navigate through difficult business challenges. His experience includes exposure to various industries, such as pharmaceutical/biotechnology developers, consumer-facing brands, retailers, and distributors, media & entertainment providers, and information technology services and platforms.

John’s recent work at SCP has been recognized by industry awards, including:

  • In 2023, John was recognized by the Global M&A Network as an Americas “Rising Star Dealmaker,” which recognizes outstanding young dealmakers from the North and South American private equity, growth investing, lending, M&A and restructuring communities for their achievements in the space.
  • In 2023, John won the M&A Advisor’s Emerging Leader Award, which recognizes leading M&A, financial and turnaround professionals who have reached a significant level of success while still under the age of 40.
  • In 2023, John was recognized with colleagues by the Global M&A Network’s 15th Annual Turnaround Atlas Awards for the SCP team’s leadership of NewAge, Inc. in the category of Chapter 11 Restructuring of the Year (sm).

John has completed relevant professional education including the Chartered Financial Analyst (CFA) and Certified Insolvency & Restructuring Advisor (CIRA) designations. John is also active in several industry associations including the Turnaround Management Association (TMA), the Association of Insolvency and Restructuring Advisors (AIRA), and CFA Society New York.

Prior to joining SCP, John was an investor with Omaha Beach Capital. There, he supported management of private equity investment vehicles, with a focus on underwriting lower- and middle- market transactions. He began his career as a management consultant with Booz Allen Hamilton’s Strategic Innovation Group.

John holds a B.S. and M.S. degree in Political Science from the Massachusetts Institute of Technology (MIT). He is an alumnus of Chaminade High School in Long Island, New York.

  • Financial Advisor and Deputy Chief Restructuring Officer to a commercial-stage developer of branded OTC pharmaceutical products. As a Financial Advisor, analyzed cash flow assumptions, assisted the board in evaluating strategic alternatives, and conducted out of court negotiations regarding the settlement of liabilities. As Deputy Chief Restructuring Officer, facilitated negotiations to secure a stalking horse bidder, completed a sale of the company's assets through a 363 sale, and coordinated the Chapter 11 case requirements in Delaware.
  • Financial Advisor and Chief Restructuring Officer Support for a national dance events producer. Completed a review of company liquidity and business plan and assisted in negotiating a capital infusion from the senior lender to bridge the company to a sale transaction after events of default. Managed the company's cash flow and implemented cash controls on behalf of CRO and Board during the sale. The company was successfully sold to a private equity buyer in an out-of-court transaction.
  • Chief Restructuring Officer Support for the restructuring and sale of a global, publicly traded multi-level marketer of health and wellness products. Instrumental in ensuring that the company could prepare for and meet bankruptcy case requirements despite the limited budget and timeline. Key contributor on the SCP project team in their coordination of the company's finance function during the Chapter 11 proceedings in Delaware despite significant management turnover.
  • Interim CEO Support to a diversified IT services and solutions provider based in Canada and US. Assisted the CEO in overseeing company operations and communications with lenders regarding the company's capital needs in connection with a potential restructuring transaction. Oversaw the cash flow forecasting and reporting process for two independent operating entities and presented regular updates on behalf of company to lender group.
  • Chief Restructuring Officer and Liquidating Trustee Support to a wholesale distributor of beer, wine, spirits, and non-alcoholic beverages where he facilitated extensive transaction diligence for its acquisition by one of the world’s largest brewing companies and assisted the Liquidating Trustee in managing the satisfaction of all company obligations during its wind down post-close.
×

GDC TECHNICS

SITUATION

  • GDC Technics is a Fort Worth-based aerospace company focused on complex interior modifications and connectivity solutions for wide-body aircraft.
  • In April 2021, Boeing terminated its contract with GDC for the design and installation of the interior of the next Air Force One aircraft, resulting in the loss of approximately 2/3 of the Company’s revenue.
  • As landlord for GDC’s 860,000 square foot hangar facility, the City of Fort Worth declared a default on the Company’s lease and indicated it would initiate a termination and eviction process.
  • The Company’s primary stakeholder was willing to support GDC’s plan to shift its primary focus toward connectivity solutions and passenger-to-freighter conversions but ultimately lacked the financial resources necessary to complete the transition.
  • GDC’s management team was commercially strong but unfamiliar with the bankruptcy process and related considerations.

SCP's Solution

  • Shortly after the termination of the Air Force One project, SCP was hired as the Company’s Chief Restructuring Officer to immediately assist with stakeholder negotiations, cash preservation, and general crisis management.
  • In order to stay the pending litigation with Boeing and retain the lease of its primary hangar facility, the Company declared bankruptcy on April 26, 2021.
  • SCP focused on guiding the Company through the bankruptcy process and related stakeholder disputes, allowing the management team to focus on its fundamental business transformation.
  • SCP worked closely with management to model and review several scenarios for its pro-forma business as well as seek alternative financing to support the business post-emergence.

RESULTS

  • Following an exhaustive review of various business plan alternatives, the Company moved forward with significant commercial counterparties in both its connectivity and passenger-to-freighter conversion businesses.
  • After extensive discovery and litigation activity, the Company entered into a structured settlement with its General Unsecured Creditors, leaving Boeing as the remaining objector to its proposed plan.
  • The Company ultimately settled with Boeing and maintained its relationship with Boeing’s commercial division for its connectivity business.
  • Two months prior to its emergence, the Company entered into an investment agreement with its primary passenger-to-freighter conversion customer to finance the remainder of the bankruptcy as well as its operations post-emergence.
  • The Company emerged from Bankruptcy in October of 2021 with committed financing and a revised ownership structure.
×

Aerospace Supplier

SITUATION

  • A $200 million supplier of aerospace components and assemblies experienced lagging build-rate requirements causing program launches to be behind schedule.
  • Pressure from OEMs to address manufacturing problems across several facilities was mounting.Pressure from OEMs to address manufacturing problems across several facilities was mounting.
  • Accelerated growth rates and new product introductions were not well planned out.
  • Several acquisitions had been made in a short time, and business integration was not yet complete.

SCP'S SOLUTION

  • Assessed the operating challenges at each manufacturing facility and led the business day to day.
  • Developed management teams for each facility location and created a small team of senior managers at headquarters.
  • Teams led the turnaround from assessment through plan execution.

RESULTs

  • Manufacturing facilities and capacities were rationalized and consolidated.
  • One new greenfield location was developed for a state-of-the-art technology roll-out.
  • Short- and long-term commercial agreements were negotiated with customers.
  • Build-rates improved, and new business contracts were awarded as a result of the recovery.
×

Complex Aerospace Parts Manufacturer

SITUATION

  • A $75 million manufacturer of complex aerospace assemblies, forgings, and machined parts for Boeing, Airbus, Lockheed, and other OEMs, had aggressively bid for new Boeing and Airbus work in the interest of filling out internal volume targets.
  • Additionally, new program start-up costs plus under-performance in legacy product lines put serious bottom-line pressure on the company.
  • Expanding losses discouraged both debt and equity holders and the Board moved to a sale-of-assets scenario.

SCP's Solution

  • In the role of the Chief Restructuring Officer, SCP professionals directed cash and working capital decision-making around a shortened sale timeline to minimize stakeholder exposure to further cash contributions.
  • SCP directed the sale activities and identified a short-list of buyer candidates that could close in a matter of a few weeks..
  • SCP tightly managed cash and working capital while managing an aggressive sale timeline and while a Chapter 11 process was planned, a private foreclosure sale was ultimately consummated.

RESULTs

  • The company sold in 6 weeks through an asset sale process that SCP designed and executed.
  • Through aggressive cash management, SCP eliminated the need for further cash contributions from stakeholders during the sale process.
  • Key customers supported the sale outcome through – and after – the sale process, due to proactive communication with them by SCP.
×

Confidential Aerospace/Defense Metal Fabrication Company

SITUATION

  • Privately-owned precision metal fabrication company that manufactures components for aerospace, defense, and energy industries with customers including Boeing, Sikorsky, SpaceX, and Solar Turbines. The company had a stalled sales process aftermarket challenges and management inexperience with forecasting and comprehensive due diligence process with sophisticated buyers.
  • Company had ~$35 million of revenue and consistent ~20% EBITDA margins in 2019. In late 2020, the Company initiated a sales process after its major shareholder and chairman passed away. The Company’s management team consisted of lifelong employees that worked their way up from the factory floor to the C-suite. While this instilled significant tribal knowledge essential to the company’s success, the record-keeping and business analytics lacked the sophistication necessary to make it through the rigorous due diligence process required to achieve a successful sale.

SCP'S SOLUTION

  • SCP was brought in to support the Company’s management team through a complex due diligence and sale process.
  • Working closely with the Chief Executive Officer, Chief Financial Officer, and VP of Operations, SCP developed forecasting tools and metrics to help the Company stay on track during the sales process and provide interested parties with appropriately detailed insights into the company’s performance. This included a comprehensive forecast model with weekly, monthly and quarterly tracking. SCP also provided in-depth analysis revenue recognition, job costing, WIP, expense timing, and inventory as part of its due diligence materials to potential buyers. SCP represented the company and management through the due diligence process, including management presentations, Q&A and exclusivity diligence with the final buyer.

RESULTs

  • The Company is expected to close on a successful sale to a publicly-traded strategic buyer for $44 million.
  • The board, management team, investment banker, and buyer all stated that the transaction could not have occurred without SCP’s efforts throughout the sale process.
  • Throughout the process, SCP enabled the Company’s management team to focus on operating the company while SCP led the due diligence responses, while also providing tools and insights to improve performance which resulted in a successful sale.
  • Moreover, through the development of tools and providing guidance in business planning and forecasting, SCP catalyzed growth through proactive, informed decision-making through the unpredictable shifts caused by the pandemic.