Kanders & Co., has acquired a controlling interest in DHS Technologies LLC, a firm that makes deployable shelters for the United States government and armed forces and for international customers, a deal that marks the company’s return to the defense industry.
Terms of the deal were not disclosed.
DHS Technologies makes mobile infrastructure systems under its DRASH product line, including 64 models of quick-erect, strike soft-walled shelters, over 20 support trailer systems with multiple integrated utility packages and accessories to support these systems. The company’s products are used in tactical operations centers, vehicle maintenance and workshops, medical and life support, hangars for unmanned aircraft systems and control, satellite support systems and more.
Warren Kanders, who leads Kanders & Co., will become chairman of DHS Technologies while Jon Prusmack will continue to serve as president and CEO of the company. Kanders at one time was the chief of up-armored Humvee supplier Armor Holdings, which was sold to Britain’s BAE Systems.
In May Kanders & Co. acquired a tactical accessories business from BAE called Safariland, which sells body armor, less lethal products and munitions, holsters and other duty gear to various law enforcement customers. Safariland previously had been a business unit of Armor Holdings.
Safariland is a commercial oriented business while DHS Technologies is squarely in the defense market, Kanders told Defense Daily. DHS Technologies provides a platform for additional growth, primarily through acquisitions but also organically, he said.
Kanders said that going forward he will be “opportunistic” when it comes to acquisitions. The focus will be on companies with products, not services, he said.
DHS Technologies has “excellent free cash flow” and “provides the right platform to grow in various defense markets,” Kanders said in a statement. “Similar to our recent acquisition of Safariland, we partnered with GSO Security Capital Partners to finance the transaction, and we begin with a strong balance sheet and the ability to execute quickly on various growth opportunities without raising any additional capital.
Kanders said that DHS Technologies is off its revenue peak during the height of the wars in Iraq and Afghanistan but that the company’s products fit well with the Pentagon’s strategy that emphasizes light, flexible and responsive forces. There may also be opportunities in the business for emergency services as part of disaster response but the question of who will pay for the products is an issue, he said.
In addition to the shelters, DHS Technologies also provides the related systems such as power generation and energy management products and heating, ventilation and air conditioning.
Kanders acquired the controlling interest from DHS management and the private equity firm The Carlyle Group. DHS is based in New York and has manufacturing facilities there and in Alabama.