Case Study

Executive-Led Due Diligence on a $1.5B Defense & Nuclear Carve-Out

$1.49B

HEADLINE DEAL VALUE

05

OPERATING BUSINESSES

03

EXECUTIVE SMES DEPLOYED

CEO & COO

DIRECT-HIRE PLACEMENTS

Project Overview

Deal value	Up to £1.1 billion (about $1.49 billion), all cash
Buyer	Global private equity firm (U.S.-headquartered)
Target	Mechanical engineering businesses carved out of a UK-listed industrial group
Scope	Five operating businesses in the UK and continental Europe
End markets	Naval nuclear submarine programs in the UK and U.S., defense, and critical industrial infrastructure
Structure	Partial divestiture: the seller keeps two other divisions, so the business must stand alone after close
VDS role	Three executive subject-matter experts embedded in operational and commercial due diligence
Outcome	Signed September 2026, with completion expected in Q1 2027; VDS placed the CEO and COO as direct hires

The challenge

The buyer had to value a billion-pound business whose worth depended on things a financial model cannot see. It needed to know whether the plants could run, and whether they could win and keep sole-source defense work.

Mission-critical, hard-to-replicate capacity. The businesses make high-integrity castings and precision-machined components for nuclear submarine programs. Few suppliers in the Western world can meet these specifications, so continuity of production and quality carried the valuation.
Five businesses, several technologies. The perimeter spans heavy steel castings, precision machining and fabrication, specialist valves, radar and antenna systems, and pumps. Each has its own operating model, customers and risks.
Cross-border and carve-out complexity. The assets sit in the UK and continental Europe. They are being separated from a listed parent that keeps other divisions, so the buyer had to plan for standalone leadership, systems and shared services.
National-security scrutiny. Defense and nuclear work draws regulatory review on both sides of the Atlantic, which raises the stakes on customer concentration, program exposure and supply-chain resilience.
Leadership continuity. A carve-out of this size needs an operating team ready to run it independently from day one.

The VDS approach

VDS used its 360° Client Alignment® method to vet candidates across operational excellence, functional and technical depth, geography, industry knowledge and cultural fit. It then assembled a three-person bench of executives who had run businesses like the target. Each expert worked alongside the deal team during operational and commercial due diligence.

Expert	Diligence focus	Outcome
Executive SME 1: general management	Leadership assessment, standalone operating model, value-creation plan and customer relationships	Hired as CEO
Executive SME 2: operations	Plant capacity and capability, quality systems, production risk, capital needs and carve-out readiness	Hired as COO
Executive SME 3: industry and commercial	Defense and nuclear market dynamics, program exposure, competitive position and supply-chain resilience	Diligence engagement

The experts turned site data, management presentations and market evidence into judgments the investment committee could act on. Because they had held these jobs, they could test management’s plan from the operator’s side of the table.

Results

The engagement helped the buyer sign an up-to-£1.1 billion transaction and go into ownership with its top two operating leaders already chosen.

- Deal support. Three executive SMEs gave operator-grade input on operations, market and leadership during diligence. That input helped the deal team reach conviction and bring a complex cross-border transaction to signing.
- CEO placed. One expert moved from diligence adviser to permanent chief executive of the acquired business.
- COO placed. A second expert became permanent chief operating officer, responsible for the plants and operating risks they had assessed in diligence.
- Continuity from thesis to execution. The leaders who helped build the investment case are now the ones delivering it. The buyer avoided a separate post-close executive search and the lost time and learning that come with it.
- Two of three. Two thirds of the diligence bench converted to C-suite direct hires.

Why it matters for deal teams

In complex industrial carve-outs, the people who test the investment thesis are often the best people to deliver it. VDS gives private equity sponsors a vetted bench of sector executives who can join diligence within days. Those executives can then move into leadership roles once the sponsor has seen how they work.

Put a Proven Operator on Your Next Deal

The experts who pressure-test your investment thesis are often the ones best placed to deliver it. VDS gives private equity sponsors a vetted bench of sector executives who can join operational and commercial due diligence within days, then step into CEO, COO, or board roles once you have seen how they work. Tell us about your deal and we will assemble the bench to match.