DLJ Flies Higher With DeCrane Add-On –

DLJ Merchant Banking Partners last month bolstered its avionics platform with the addition of Precision Pattern Inc., a Wichita, Kansas-based supplier of aircraft furnishings.

Earlier this year, the group also acquired PATS, a company that installs supplement fuel tanks in corporate jets, thereby extending their flight range. The total purchase price for Precision Pattern and PATS was more than $100 million, according to Tompson Dean, a managing partner at DLJ Merchant Banking.

The companies were added on to DeCrane Aircraft Holdings Inc., which DLJ Merchant Banking acquired last July for $300 million. (BUYOUTS Dec. 28, 1998, p. 12). DeCrane had been publicly listed, but management decided the company’s stagnant share price did not reflect its profit potential. DLJ Merchant Banking sponsored a public-to-private transaction at $23 per share, giving management an undisclosed minority equity stake.

DeCrane, based in El Segundo, Calif., makes avionics and cabin management products, such as display panels, for commercial and corporate jets.

The firm hopes to expand DeCrane into a company that can fully equip aircraft cabins. According to Mr. Dean, the rise of fractional jet ownership, by which several corporations buy shares in a corporate jet, has increased demand for jets and related products. All the major corporate aircraft producers have backlogged orders, Mr. Dean noted.

DeCrane now has sales approaching $300 million annually, Mr. Dean said.

Financing for all the acquisitions was provided by DLJ Securities Corp. in the form of senior debt.

Mr. Dean said the firm likely will take DeCrane public again, but declined to say when.

Big Wigs Advise DLJ

DLJ Merchant Banking has some high-profile advisers to help it source and evaluate technology sector deals-a year ago the firm teamed up with Global Technology Partners, a group of former public-sector heavyweights, including former Defense Secretary William Perry and former head of the Central Intelligence Agency John Deutch.

In April, the two groups acquired defense electronics contractor Condor Systems for $134 million (BUYOUTS May 3, p. 12). By working with DLJ Merchant Banking, the partners at Global Technology receive an equity stake of undisclosed size in the companies for which they provide advisory services, which includes the DeCrane deal, according to Mr. Dean.

DLJ Merchant Banking has invested approximately 50% of its $3 billion buyout merchant banking fund. Mr. Dean said it was too early to discuss plans for any follow-up fund.