KAL Capital Q2 Quarter in Review

We are extremely pleased to have represented Valence Surface Technology, a portfolio company of Trive Capital, in their sale to ATL Partners this past quarter. The transaction marked another sale in an important sub-vertical for us (metal finishing). It was terrific to see the completion of a successful investment for both Trive Capital and several former clients of ours who made up some of the early constituents in the roll-up that eventually became Valence.

In addition, the previous quarter marked the singular most important industry networking event of the year, the Paris Air Show. Conversations at this year’s show were focused on two primary topics. The first centered around the future of the MAX; will Boeing be able to get the aircraft flying again and if so, will airlines honor existing orders. By now, no one credible is predicting with certainty when the MAX will finally fly again. Concern about the sustainability of the current build-rate is growing in a linear direction to the number of planes parked throughout the greater Seattle area. Rumors of a Boeing narrow-body MAX replacement are rampant though no definitive time line has emerged.

The second topic of conversation centered around M&A activity. The headline grabbing transaction announcements are always fun, especially the idea of two behemoths like UTC and Raytheon doing a “merger of equals.” For us and our clients in the lower tiers of the supply-chain, the M&A market remains seller-friendly primarily driven by institutional private equity deploying capital aggressively into growing businesses with clear barriers to entry.

In a continuation of what seems to be the “new normal,” we do not anticipate the months of July or August to offer any break in the action as deal activity remains high.

As always, we encourage your thoughts and questions and hope to hear from you soon.

Please see our review here…KAL Capital AD Newsletter Q2 2019