Watch out, world. The PE bros are making some pond-hopping money moves.
DC-based defense private equity firm Arlington Capital Partners has completed its £345.6M ($460.6M) acquisition of British photonics company Gooch & Housego, the two parties announced exclusively to Tectonic this morning.
With the deal wrapped up, Arlington is eyeing major investments to expand G&H’s presence and production capacity in the US, where, ICYMI, demand is booming for lasers, drone optics, and guidance systems.
- Arlington has plenty of money to put behind that push, after raising a $6B Fund VII last October. Over the past 27 years, the firm has raised over $14B and seen some big-time exits, most notably BlueHalo’s $4.1B sale to AeroVironment (AV) last May.
“We’ve spent a fair amount of time looking at the optics and photonics components and subsystems sector and have looked at a number of different opportunities over the years,” Arlington Managing Director Ben Ramundo told Tectonic. “G&H just kept coming up as a well-regarded and respected company in that area, even though at the time we weren’t necessarily looking at the business.”
“The company has an exceptional history and heritage dating back to the Blitz. They provide extremely high-spec photonics and optics components—the building blocks of major weapon systems and other defense systems [like] laser weapon systems, subsea cables, targeting systems, inertial guidance, nuclear fusion, and all of that’s within aerospace and defense,” he added.
Old hand: Founded in 1948, G&H’s product portfolio and customer base span medical, semiconductor, telecommunications, and industrial tech, but defense has quickly become the company’s bread and butter.
- In the first half of 2026, G&H’s defense biz saw revenue rise 51.7 percent year-over-year, making up 43 percent of the company’s £81.9M ($109M) in total revenue. Their order book also increased to a record £167.3M ($223M) in that period.
- Those technologies include infrared imaging and optical systems for counter-drone systems, targeting systems, gyroscopes used in inertial navigation, and laser weapon components.
Suffering from success: Now, if you read Tectonic, you’ll know that those areas are pretty hot right now, and it’s only going to get hotter. Going private, especially with a major player in the defense PE world, gives them the capital to invest in capacity expansion without taking the hit on those annoying quarterly reports. You’ve gotta spend money to make money, as they say.
“Demand is growing very, very rapidly for these types of things, and G&H, as a smaller listed UK public company, didn’t quite have the flexibility to make the long-term investments that it needed to make to service that demand from customers,” Ramundo said. “Companies are beholden to quarterly, biannual, or annual targets, and it’s hard to sometimes find the balance of, ‘What investments do we make for the long term that hurt us and the public perception of our stock in the near term, and what investments do we hold off on?’”
“Our view was, well, let’s just take that issue off the table,” he added. “Let’s give [them] the resources and the long-term trajectory and vision to make those investments that are right for the employees, right for the customer, right for the warfighter.”
That’s a good deal for G&H, which was “starting to bump our head on the ability to actually meet the real requirements of our customers to bring our technology to bear,” CEO Charlie Peppiatt told Tectonic. “Even though we’re seeing all areas grow, we expect to see our aerospace and defense activity double again in the next few years, but part of the success that we’ve had has almost now become the limiting factor.”
Private plays: Now, as a private company, Arlington is looking to put some serious money behind G&H’s expansion in the UK, Europe, and especially the US, where the company has already set up shop in Ohio, California, Florida, New Hampshire, and New York.
- Overall, Peppiatt said G&H’s sales are split roughly 40 percent in North America, 40 percent in Europe, and 20 percent in the Asian market, but “without question, we see the largest growth opportunity in the North American market.”
“The very clear message from our customers in North America is that [they] want these products made in North America, and G&H has the ability to do that, but obviously there’s an investment that’s required to make that happen,” Peppiatt said, and Arlington is the right firm to take them to the next level. “When I’ve been talking to our main customers, particularly in aerospace and defense, Arlington is an absolutely known entity, and this increases the opportunity by which we can deliver what they’re asking for.”
