Continental Aerospace Technologies is set to return to US ownership in a $535 million deal with Arcline Investment Management.
Arcline said it has entered into a definitive agreement to acquire the holding company of Continental Aerospace Technologies, the Mobile, Alabama-based piston and turbine aircraft engine manufacturer.
The transaction has the support of Continental’s controlling shareholders Aviation Industry Corporation of China, better known as AVIC.
The companies did not disclose an expected closing date.
Continental is one of the best-known names in general aviation propulsion, supplying piston engines, diesel engines and aftermarket support for aircraft manufacturers, owners and maintenance providers.
“Continental has built an exceptional reputation over its long history as a critical supplier to the general aviation market,” Arcline said in its announcement.
The deal would move Continental out of Chinese ownership at a time of growing US scrutiny of AVIC-linked aviation companies.
The US Department of Defense named AVIC, Cirrus Design Corporation and Continental Aerospace Technologies in its updated Section 1260H list of Chinese military companies operating directly or indirectly in the United States.
The Arcline announcement did not cite the Pentagon designation as a reason for the sale.
Continental has been under AVIC-linked ownership since Teledyne Technologies completed the sale of its piston-engine business to Technify Motor, a subsidiary of AVIC International, in 2011.
Continental’s product line includes avgas piston engines used in a wide range of general aviation aircraft, as well as Jet-A piston engines developed through its diesel engine business. The company also provides replacement parts, engines, maintenance and support for the general aviation fleet.
Arcline is a private equity firm focused on industrial technology, aerospace, defense and other critical-industry suppliers.
The firm has built a growing aerospace and defense portfolio. Arcline already owns Hartzell Aviation, whose brands include Hartzell Propeller, Hartzell Engine Tech, Janitrol Aero, Plane-Power and Sky-Tec. The firm has also built a broader aerospace and defense portfolio that includes helicopter maker Kaman Corporation, Signia Aerospace and Novaria Group.
Arcline says it manages more than $20 billion in capital.