Chips ahoy: 4 semiconductor deals target aerospace and defense

Behrman Capital, Industrial Growth Partners and Quad-C are among the buyers, while Artemis sold a chip maker.

The shortage of microchips and related technologies, which has been exacerbated by the pandemic and a snarled supply chain, has opened a global race for the semiconductor industry.

Microchips are at the center of electronic advancements, cutting across sectors such as automobiles, household appliances, cellphones, medical, manufacturing equipment, aerospace and defense systems, and many more.

Last year, the US government enacted a multi-billion-dollar CHIPS and Science Act that is meant to spur research and production of semiconductors. Recently, PE Hub has seen deals that show the appetite of private equity firms to invest in this sector.

Here, we are looking at four chip deals that target the aerospace and defense market.

  1. Industrial Growth Partners-backed AEM acquires Central Semiconductor

San Diego headquartered AEM, a portfolio company of Industrial Growth Partners, last month acquired Central Semiconductor, a Long Island, New York-based, company that designs and manufactures semiconductors for a range of end-markets, including industrial, medical, aerospace, defense and commercial. Central Semiconductor was founded in 1974.

Rick Busch, AEM CEO, said the combination of these two companies will go a long way in deepening the broader product offering. “The acquisition of Central Semiconductor provides AEM with a full suite of discrete power-conditioning components, which we view as highly complementary with AEM’s existing portfolio of circuit-protection products,” he said.

  1. Behrman Capital-backed Micross buys Infineon Technology’s DC-DC converters

Behrman Capital’s portfolio company, Micross Components, agreed to acquire the High-Reliability DC-DC converter business of Infineon Technologies AG, a global semiconductor company focusing in power systems and IoT. The deal is expected to close in the first quarter of the calendar year 2023.

The acquired business is headquartered in San Jose, California, with a facility in Copenhagen. Behrman Capital is based in New York while Micross Components is headquartered in Orlando, Florida.

Micross is a provider of microelectronic products and services for aerospace, defense, space, medical and industrial applications. The Micross acquisition of the High-Reliability DC-DC converter business of Infineon Technologies AG is its eighth under Behrman Capital’s ownership.

“This acquisition represents an extremely strong strategic fit for Micross, as the company continues to build out its high-reliability product portfolio to better serve its customer base,” said Simon Lonergan, Behrman Capital managing partner. “Adding Infineon’s DC-DC converter Business to Micross’ platform further differentiates and adds significant IP to the company’s leading position as a one-stop source of supply for high-reliability electronic products and services.”

  1. Artemis sells KCB Solutions to Micross

Artemis Capital Partners, a Boston-based PE firm, completed the sale of KCB Solutions, a manufacturer of specialty high-reliability RF and microwave technologies, to Micross Components.

Among its products, KCB boasts of Gallium nitride (GaN) transistors, a wide bandgap semiconductor used for high-efficiency power transistors and integrated circuits, and power amplifiers, low-noise amplifiers, Hi power pin switches, GaAs Fet Switches, Digital Step Attenuator, among others.

“KCB’s components serve the intersection of two of the most demanding and essential end-markets, defense and space,” said Peter Hunter, Artemis managing director and former KCB board member.

  1. Quad-C buys QED Technologies International

Quad-C Management, a Charlottesville, Virginia-headquartered firm, is expected to close its acquisition of QED Technologies International from Entegris in the first quarter of 2023.

Entegris, a Billerica, Massachusetts-based company, is a supplier of advanced materials and process solutions for the semiconductor and other high-technology industries.

“QED is a leader in precision optics finishing equipment, products and services, providing the most precise technologies to manufacturers in semiconductor, aerospace & defense markets,” said Tom Hickey, partner at Quad-C.

QED offers state-of-the-art MRF polishing and SSI metrology manufacturing solutions that are designed to meet the needs of advanced optics manufacturers by increasing production speed and yield while decreasing costs, noted the company in a press statement, adding that QED systems are utilized by the manufacturers supplying the semiconductor, military, space, R&D, imaging and other industries.