CBPE Capital Exec ‘Actively’ Exploring Acquisitions to Build on ETL Investment

Jolyon Latimer, Partner, CBPE Capital. Photo: Latimer

In January, CBPE Capital announced that it had invested in satellite technology vendor ETL Systems, and is open to making further investments in the satellite arena. Jolyon Latimer a CBPE Capital partner, told Via Satellite that the company, “will be actively reviewing complementary acquisitions for ETL and would therefore expect to invest further capital in this sector.”

“The satellite industry is an attractive, high growth sector underpinned by the increasing volumes of data being transmitted and the evolution of technology. The satcom market is forecast to grow at up to 12% per annum over the next 5 years making it an attractive sector to invest in. The satellite industry benefits from being a global market and therefore should be insulated from an economic slowdown in an individual country/region,” he said.

CBPE Capital is a private equity firm in the United Kingdom with nine funds raised over 30 years. Investments are typically made in companies seeking growth or development capital, with an enterprise value of up to $198 million. ETL, which is also based in the U.K., designs and manufactures professional RF distribution equipment for satellite ground stations and other microwave users. The product range includes L-band routers, switches, splitters, combiners and amplifiers covering DC-40GHz.

Speaking after the U.K. left the European Union (EU) after a tumultuous Brexit process, Latimer said he sees satellite communications as a growing, global market. “Brexit notwithstanding, we believe that U.K. and European satellite companies will continue to have a strong position in the sector. One of the key attractions of U.K. and European-based satellite companies are their global customer bases which should provide insulation from a slowdown in the economy of any individual country or region. The sector is being driven by the growth in the volume of data being transmitted and the resulting advancements in technology and these trends will continue for the immediate future,” Latimer said.

As to what attracted CBPE Capital to ETL, Latimer said CBPE Capital sees ETL as having strong and consistent track record of growth and benefits from serving an international, blue chip customer base. He said the company has an excellent reputation for designing and manufacturing high quality and reliable products from its well invested, wholly owned facilities in the UK. He also talks about in recent years that ETL has developed complementary new product offerings such as RF over fiber which has helped to boost its growth and the business is well positioned to continue this expansion into adjacent markets, organically or by acquisition.

“The global satellite market is forecast to experience strong growth driven by the increasing volumes of data being transmitted and ETL is well positioned to capitalize on this trend. There are some very exciting technological evolutions in the satellite ground segment and ETL Systems has the technical expertise and product development agility to take advantage of these. The growth opportunities that these offer, combined with a proven historical ability to penetrate new markets and develop strong customer relationships, are what attracted CBPE to ETL,” he added.

Latimer says CBPE Capital will support ETL’s management team in delivering their ambition to continue to grow the business organically and also in identifying and reviewing potential bolt on acquisitions. ETL has expanded through M&A in the past with the acquisition of Atlantic Microwave early last year. Atlantic Microwave provides a complementary suite of products in the satellite simulation, test loop translators and satcom RF testing field and enabled ETL to expand into an adjacent market.

The company aims to be “supportive” investors. “CBPE Capital are supportive investors and we are backing the incumbent management team to continue to grow the business. The leadership of the company and day-to-day culture will remain the same. We are most excited by the opportunity to provide the business with support and investment to develop new products and make strategic acquisitions,” Latimer said.

With the satellite industry looking to play in many verticals, Latimer hinted at some areas outside of space where CBPE Capital may focus other investments. “Healthcare driven by an aging population and advancements in technology (is one focus). Tech enabled business services which combine software/technology with people to deliver a more consistent and efficient service proposition (is another). Industrial technology, particularly businesses with high levels of know how and/or intellectual property and have the ability to access a global market, such as ETL, are also of interest,” he said.