CoVant, Madison Dearborn make another deal

Private equity firms Madison Dearborn Partners and CoVant Management have done another deal together with this more recent acquisition being of LinQuest Corp., a provider of space systems technology solutions for defense and intelligence agencies.

Terms of the deal were not disclosed but LinQuest management including CEO Leon Biederman will retain what was called a “significant minority ownership position.” Biederman will continue to lead the company.

This is the second deal that Madison Dearborn and CoVant have done together. In 2014, they jointly acquired LGS Innovations when that business was spun out by Alcatel-Lucent. They continue to own that business together.

LinQuest is no stranger to mergers and acquisitions. The company was founded in 2004 after it was spun out from the former Titan Corp. Titan owned the business through the 2000 acquisition of LinCom Corp.

Titan sold the LinQuest business because of organizational conflict-of-interest concerns that were raised as Lockheed Martin was moving to purchase Titan. Lockheed eventually pulled out of the deal and Titan was later acquired by L3 Technologies, then known as L-3 Communications.

On its own, LinQuest has continued to develop space systems and providing large-scale systems engineering and integration, software and cyber systems development, complex systems modeling and simulation, data analytics and mission solutions.

"LinQuest is a unique, differentiated technology company serving critical national security programs in the growing space market," said Matt Norton, a managing director for Madison Dearborn's business and government software and services team.

Space has seen several deals close recently as acquirers have sought a bolstered footprint in a market seeing growth in both spending and prioritization. Recent examples include Parsons Corp.'s move for Polaris Alpha, the latter of which made space-focused deals of its own before the sale.

There is also KBR's run of three deals over the past two years that added significant NASA work. Northrop Grumman's still pending acquisition of Orbital ATK is the most high-profile example of a buyer seeking to create a true end-to-end space portfolio.

The investment from Madison Dearborn and CoVant will allow LinQuest to expand its research-and-development work and improve business development as a way to drive growth.

"LinQuest is a highly attractive business in the dynamic space situational awareness, [positioning, navigation and timing], and satellite communications sector," said Joseph Kampf, chairman and CEO of CoVant. "We believe LinQuest's differentiated technology capabilities in desirable space end-markets will benefit from our focus on growing businesses through both organic and strategic acquisition initiatives.”

Baird served as LinQuest's financial adviser. Alston & Bird LLP, Squire Patton Boggs, and Drinker Biddle & Reath LLP served as legal advisers.

Kirkland & Ellis LLP and Crowell & Moring LLP served as legal advisers to Madison Dearborn and CoVant. As part of the transaction, Bank of America Merrill Lynch is providing a credit facility to support LinQuest’s continued growth.