US-based aerospace company Kaman Corporation has agreed to sell its distribution unit to affiliates of private equity firm Littlejohn for $700m in cash.

Under the definitive agreement signed between the parties, Kaman will receive $600m in net proceeds from the transaction.

Kaman will continue to design and develop critical components, structures, and systems for commercial and military customers after closing of the deal.

According to the company, the divestiture will enable it to expand its aerospace segment, which currently employs nearly 3,000 people at 14 facilities worldwide. The business is expected to generate $730m to $760m in revenue this fiscal year.

Kaman chairman, president, and CEO Neal J Keating said: “For Kaman, this transaction represents an important milestone in our portfolio transformation and the culmination of a thorough strategic review undertaken by our board of directors.

“Our strengthened balance sheet will better position the company to invest in and build our higher margin, higher growth aerospace and engineered products businesses to enhance shareholder value.”

Proceeds will be used to clear around $100m in debt and the remaining funds will be used to advance internal development efforts.

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Kaman’s distribution segment generated $1.1bn net revenue in 2018 and is a distributor of more than six million items, including electro-mechanical, bearings, power transmission, and electrical and fluid power components to customers in all industries.

Expected to close in the third quarter of this year, the transaction is subject to customary closing conditions, working capital adjustments, and other necessary consents and approvals.

Robert W Baird and JP Morgan Securities are acting as financial advisors to Kaman for this transaction, while K&L Gates is serving as the lead legal advisor.

Gibson, Dunn and Crutcher is the legal advisor to Littlejohn on this deal.