FARSOUND
Founded in 1986, headquartered in Romford, UK, Farsound consisted of two divisions, a Distribution division and a Manufacturing division, both serving the commercial aerospace and defence sectors from a single facility in the UK.It had over 125 customers including many of the world’s largest MROs, airlines and international OEMs.
Entry Date
July 2011
Deal Status
- Realised
- July 2019, December 2019
Sector
Aerospace & Defence
Geography
- UK Headquartered
- International Business
complexities
- Owner/Management Transition
- Fixable Underperformance
- Carve-out
rubicon origination
Rubicon established a direct relationship with the vendor and Founder’s family in advance of a sale process in 2010. Rubicon had significant experience in the Aerospace industry, and were comfortable with the lack of a CEO in the business. Our credentials and relationship were key to establishing trust and acquiring the Company.
Rubicon angle
Rubicon viewed the two divisions as separate and separable businesses, even though these were managed by a single Management Team out of one facility. The divisions had different business models with completely different drivers, a complexity Rubicon are experienced in solving. Moreover, the Company also needed assistance in appointing a CEO to oversee the Management Team.
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Rubicon identified that the Distribution division, which was rebranded Farsound Aviation, had a highly differentiated and sustainable model, creating tremendous value to its MRO customers. This provided an opportunity to expand its customer relationships and build a global presence, making it an attractive growth platform.
By contrast, the Manufacturing division, rebranded XCEL Aerospace, was a loss-making, relatively undifferentiated build-to-print manufacturer, facing the threat of customers moving work to suppliers in lower labour-cost geographies and required cost reduction and a new Management Team.
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Following its Founder and CEO passing away, Farsound became an orphaned Company in need for Rubicon to facilitate an Owner/Management transition, whilst also separating the Company into two completely separate businesses and appointing a new CEO.
Growth opportunityOwner/management transition -
Farsound
VALUE CREATION STRATEGY
Rubicon worked on consolidating, optimising and fully separating Farsound into two completely separate businesses. We helped secure and expand global market presence and customers relationships for Farsound Aviation while effecting a turnaround of XCEL Aerospace.
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Successful physical, legal and management separation of the two businesses, including the transfer of approvals.
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Internationalised the business by placing Farsound people and consignment inventory into China, Europe and Japan.
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Creation of a highly attractive pure-play C-class component supply chain business.
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Diversified the target market from engines powering wide-body aircraft to narrow-body aircraft.
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Enhanced Management Team, including new CEO, Purchasing and Sales.
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Initiated and executed the acquisition of Sterling Aircraft Products.
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Rigorous strategic planning processes including meeting industry experts, customers, competitors and recruiting specialist advisors to penetrate new customers (MTU).
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Implementation of KPIs and improved financial reporting.
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