Arlington Capital Partners has formed Keel Holdings LLC: A new force in naval and industrial manufacturing

Arlington Capital Partners, a private investment firm based in Washington, D.C., has launched Keel Holdings, LLC, a new company that combines three leading manufacturers of complex structures for the U.S. military and other customers.

Keel Holdings, LLC was formed by merging Pegasus Steel, a portfolio company of Arlington Capital Partners, with Metal Trades and Merrill Technologies Group, both acquired by Arlington recently.

Keel Holdings, LLC will operate nine facilities in Michigan and South Carolina, with more than one million square feet of manufacturing space and about 700 employees.

The company will offer a range of design, engineering, fabrication, machining, integration, assembly, finishing, and surface treatment services, as well as the ability to deliver large modules by barge to submarine and aircraft carrier customers from its waterfront facility.

The company will be led by CEO Brian Carter, who said that Keel Holdings, LLC is “ready to meet the growing demands of the nuclear Navy and critical programs within the Department of Defense, industrial and commercial end markets.”

Metal Trades, founded in 1962 by J.E. Corbin and owned by his family until the acquisition, is a provider of metal fabrication and ship repair services to the Navy, Army, and commercial customers.

The company has a long history of collaboration with Pegasus Steel, founded in 2007 by Tony Deering and acquired by Arlington Capital Partners in June 2023. Pegasus Steel is a provider of fabricated steel structures for submarine, aircraft carrier, and other naval and industrial systems.

The formation of Keel Holdings, LLC was advised by DLA Piper and Morrison Foerster as legal counsel and Houlihan Lokey as financial advisor for Arlington and Keel. Merrill Technologies Group was advised by Charter Capital Partners as financial advisor and Butzel Long as legal counsel. Metal Trades was advised by Mensura Capital, LLC and Mensura Securities, LLC as financial advisors and Sheppard, Mullin, Richter & Hampton LLP as legal counsel.

Brian Carter, CEO of Keel, said, “Keel will play a pivotal role in delivering significant capability growth to the U.S. defense industrial base. Our efficient and effective approach positions us to increase the speed of delivery and production for the country’s highest priority defense programs. I look forward to working alongside the talented teams from Pegasus, Metal Trades, and Merrill, whose hard work and expertise have laid the foundation for Keel’s emergence as a formidable and positive force in the defense industry.”

Peter Manos, a Managing Partner at Arlington, said, “Keel is becoming the leading Tier 1 provider of large, fabricated structures to its OEM customers that serve the critical needs of the Navy, Army, Air Force, and DoD. By achieving vertical integration through significant investments in facilities, equipment, and human capital, the Company is prepared for the large increase in activity that it expects across its entire DoD and industrial customer base.”

Ben Ramundo, a Principal at Arlington, added, “Keel is supporting the steep production ramp of the Columbia and Virginia class submarine programs by positioning itself to deliver turnkey structures and modules to its customers, empowering them to use valuable shipyard space more effectively. We are excited to support the entire management team as the industrial logic of these transactions yields measurable benefits to Keel’s customers and the national security community.”

Merrill Technologies Group is a leading manufacturer of large metal parts and structures, providing design, engineering, machining, fabrication, and integration solutions for the defense, aerospace, and industrial markets. Founded in 1968 by Gary and Mary Kay Yackel near Saginaw, MI, Merrill was most recently owned and operated by Bob and Jeff Yackel, who together stated, “We are extremely proud of the legacy we have built at Merrill. After over 50 years as a family-owned company, we are excited for the partnership between Merrill, Pegasus, and Metal Trades, which is going to bring a unique strength to the market. Together as Keel, our design and engineering expertise, culture of manufacturing excellence, and diverse set of capabilities will continue to help support the Navy, Army, and Air Force, as well as the commercial sector. We are especially thankful for our employees, customers, and vendors that helped grow and support Merrill over the years.”

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