Blackstone has announced a significant investment to launch Falcata, a defense technology company being formed through the acquisition and combination of TSC and Applied Systems Engineering, Inc. under a single platform.
Funds managed by Blackstone will acquire the two companies and combine their complementary technologies across the interceptor guidance chain. The announcement did not disclose financial terms.
Falcata is being created to expand U.S. industrial capacity for technologies used in missile defense and other national security missions as governments respond to the increasing use of inexpensive drones, missiles and other weapons at scale.
Blackstone said recent conflicts have demonstrated a growing need for defensive systems that can combine effectiveness with the production volumes required to counter large numbers of comparatively low-cost threats.
The strategy goes beyond producing additional interceptors. Falcata will focus on increasing capacity for the sensing, guidance, navigation and control technologies that form critical components inside those systems.
The combined company will bring together capabilities spanning advanced seekers and radar technologies, guidance electronics, control actuation systems, GPS-denied navigation, intelligence, surveillance and reconnaissance, launchers and other technologies used in missile defense and national security applications.
Falcata plans to build on the existing customer relationships, programs and technologies of TSC and ASEI while investing additional capital in technology development, manufacturing capacity and talent.
By bringing the businesses together, Blackstone and Falcata intend to create a larger engineering and manufacturing platform capable of moving defense technologies from development into production more quickly.
The companies are also positioning Falcata to address potential bottlenecks in the defense supply chain as the U.S. and allied governments seek to increase interceptor production and expand the industrial base supporting air and missile defense.
Brandon Wolfson will serve as CEO of Falcata, while Jonathan Moneymaker will serve as Chairman.
Goldman Sachs & Co. served as exclusive financial adviser to Blackstone, while Simpson Thacher & Bartlett served as legal counsel.
Blackstone manages more than $1.3 trillion in assets across investment strategies including private equity, real estate, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds.
KEY QUOTES:
“The United States needs a defense industrial base capable of combating the evolving threats facing our warfighters. Recent conflicts have demonstrated that lower-cost interceptors are a cornerstone of our national security strategy. Producing more interceptors requires greater capacity across critical sensing, guidance, navigation and control technologies inside them. We are building Falcata to deliver the technology America and its allies need, at the scale the mission demands.”
Jonathan Moneymaker, Chairman of Falcata
“Falcata answers a critical national security challenge. With deeper resources, expanded manufacturing capacity and a unified engineering base, Falcata will help ensure our industrial base is ready to advance capability faster and break the supply chain chokepoints that our national defense increasingly requires.”
David Kaden, Senior Managing Director at Blackstone
“Partnered with Blackstone, we have the resources to build and scale to dramatically expand what we can offer our customers. We can now pursue bigger challenges, invest ahead of their needs and move critical technologies from development into production faster, while maintaining the technical rigor, agility and customer focus that have made both companies successful.”
Brandon Wolfson, CEO of Falcata
