Kester, a business unit of Northrop Grumman Corp., has been sold to American Capital Strategies Ltd. for an undisclosed amount.

At a press conference on Tuesday during APEX, Dave Torp, Kester's vice president of marketing and business development, announced that the company has just one announcement to make at the show this year--they have been acquired. The acquisition allows Kester to break from the defense arena and return to their roots of supplying to the assembly, component, electrical and industrial marketplace.

According to Torp, the acquisition allows Kester more freedom. "We have increased flexibility and agility within the marketplace, and can generate more buiness, especially in foreign entities," he siad. "With them [American Capital], we are free to market globally, manufacture and support customers, especially in China."

Kester was sold to American Capital "lock, stock and barrel," said Torp. He added that Kester's management team remains intact.

Torp also said that Kester comprises a large portion of American Capital's holding portfolio, allowing Kester to keep up with this constantly changing industry and new technologies. Kester also has implemented a "phase-gate system" which will allow them 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.

www.kester.com

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