Kester sold to American Capital

Circuits Assembly, April, 2004

Kester (Des Plaines, IL, www.kester.com), a business unit of Northrop Grumman Corp., has been sold to American Capital Strategies Ltd. (Bethesda, MD, www.americancapital.com) for an undisclosed amount. The acquisition, announced during a press conference at APEX, allows Kester to break from the defense arena and return to supplying the assembly, component, electrical and industrial marketplace.

Kester comprises a large portion of American Capital's holding portfolio. Kester's management will remain intact, and the company has initiated a phase-gate system that will allow it to accelerate new product development from years to months.

American Capital's investment takes the form of a revolving credit facility, senior term loans, senior and junior subordinated debt and preferred common equity. Post-closing, American Capital will own 84% of Kester on a fully diluted basis. The remaining ownership in the acquiring company represents amounts under the employee options program, as well as equity co-investors.