ESCO Announces Acquisition of Navy Submarine Supplier

July 9, 2019 – ESCO Technologies Inc. today announced that it has acquired Globe Composite Solutions, LLC (Globe), a well-established, vertically integrated supplier of mission-critical composite-based products and solutions for navy, defense, and industrial customers.

Globe works directly with the U.S. Navy and also through prime contractors to cost-effectively and efficiently produce parts that meet rigid military-grade specifications through its internally developed expertise. Its products are utilized for acoustic, signature-reduction, communications, sealing, vibration-reducing, surface control, and hydrodynamic-related applications.

Significant capital investments in recent years have enabled the company to secure multi-year contracts to supply stealth components on the growing fleet of U.S. Navy submarines. As an industry leader, the company is solidly positioned for future growth.

Globe supplies over 140 different parts on the Virginia and Columbia class submarines, including special hull treatments (SHT), large aperture bow (LAB) array acoustic panels, missile hatch gaskets, transducer covers, propulsor fairings and propeller shaft snubbers.

The company operates a state-of-the-art 72,000 square foot research, design, machining and production facility in Stoughton, Massachusetts (near Boston) along with a 30,000 square foot logistics support facility located nearby. The facilities are located less than 90 minutes from the three major navy shipyards.

Globe, which will become part of ESCO’s Filtration operating segment, projects 2019 calendar year sales of approximately $37 million with operating margins consistent with the segment in total.

Vic Richey, ESCO’s Chairman and Chief Executive Officer, commented, “I’m excited to welcome the outstanding and dedicated employees of Globe to our team. We are continually looking to expand our product offerings and gain more content on our existing submarine and defense-related platforms, and by adding the proven capabilities of Globe to our existing product portfolio, we’ve created an additional avenue for meaningful growth across our existing customer base.

“Globe produces a wide range of mission-critical products by employing proprietary manufacturing processes. Their level of design, development and manufacturing excellence has resulted in the company being recognized by its customers as a preferred supplier, which positions the company for continued growth with current and future product requirements.

“The U.S. Navy must continually increase the stealth capabilities of its submarines in order to reduce detection of its fleet through the deployment of its Acoustics Superiority (AS) program. The goal of this program is to insert this technology into new construction as well as to add it to existing boats already in service. Globe’s R&D efforts focused on stealth technologies led to a multi-year award to produce SHT materials for the Block V and VI series of Virginia Class submarines. The U.S. Navy is also planning to back-fit certain existing subs with this technology and equip the new Columbia Class with this protection when they enter production.”

Carl Forsythe, Chief Executive Officer of Globe, commented, “I’m very pleased to have Globe become a part of ESCO, and I’m certain that we will complement their growth strategy surrounding its investments in the growing submarine and defense markets. Adding Globe to the solid capabilities and strong market presence of VACCO and Westland will create additional opportunities to further strengthen our joint customer relationships.

“Combining with ESCO is a natural fit, given our shared philosophies and values. Both companies possess a skilled and dedicated workforce, high degree of specialization, a history of investing ahead of customer demand, and a relentless approach to innovation which drives customer loyalty, deeper relationships, and creates an opportunity to secure recurring revenue and to expand our operations as new opportunities arise.”

The seller was represented by Nutter McClennen & Fish LLP as sole legal advisor and Houlihan Lokey acted as financial advisor on the transaction.