NP Aerospace: From buyout financial pressures to global defence leader

“The senior lenders dropped us on day one,” he recalls. “He went from thinking the company had a running start to realizing cash flow was a major challenge

Yet, through rigorous management, Kempston managed to turn NP Aerospace into a world-leading defence technology manufacturer that supplies Canada, the U.K., the U.S. and others with body armour plates, ballistic helmets, bomb disposal suits and vehicle armour, in addition to vehicle integrations and upgrades.

Based in London, Ont., but with operations in the U.K., the company employs about 350 people. Revenues have quadrupled in recent years through both organic expansion and strategic acquisitions.

NP Aerospace’s comeback story offers valuable lessons for entrepreneurs—not just those who operate in complex, high-stakes sectors like defence, but anyone navigating the challenges of rapid growth.

A bold buyout—and a reality check

As an engineer and a physicist, Kempston had spent years working in the defence sector, including at NP Aerospace, and understood the business inside out. When he had the opportunity to buy it, he seized it. The fundamentals were solid: deep technical expertise, longstanding relationships with defence departments and differentiated products that save lives.

But the reality of ownership set in quickly. After the company’s senior lender pulled away, cash flow became tight just as the company needed to fund production and fulfill contracts.

“One of the challenges that companies like ours face is the amount of working capital needed to ramp up programs prior to delivering and getting paid for them,” says Kempton. “Having to buy the equipment, space, inventory or raw materials to get into production can be a massive cash burden.”

Kempston was able to regain control of his finances by gradually building up his credit with lenders as the new owner of the company, but he wishes he had known more then about cash management and banking risk.

This early challenge shaped his approach to leadership and risk and reinforced the importance of having financing partners who understand the sector’s unique dynamics.

Patient financing set the stage for future growth

Kempston had originally bought the company with the support of a 50% Indigenous partner, the Pasqua First Nation out of Saskatchewan. By 2021, the company had stabilized, and Pasqua First Nation was ready to exit its investment. NP Aerospace turned to BDC to finance the ownership transfer.

What Kempston noticed immediately was that the Bank took the time to understand his company’s business model: the strategic nature of the contracts, the fact that revenues can be uneven and the need for adequate upfront working capital.

“BDC was creative,” he says. “They gave us a structure that helped us preserve as much cash as possible while continuing to pay down the principle.”

Ultimately, flexible structures with longer timelines and a willingness to understand the nuances of the defence sector were key to the company’s success. The arrangement allowed NP Aerospace to invest in opportunities instead of just fighting fires.

“It meant we didn’t have to choose between survival and growth,” says Kempston.

Kempston and his team also worked with BDC’s Growth Driver Program to clarify the company’s strategic priorities, evaluate acquisition opportunities and strengthen its internal leadership capabilities.

“It put structure around decisions we had been making instinctively,” says Kempston. “If more entrepreneurs in this space knew what BDC offers, I think they’d be lining up.”

Scaling strategically

With stability restored, Kempston focused on building NP Aerospace into a global leader. Growth came from two fronts: operational excellence and strategic acquisitions.

On the operational side, the company doubled its manufacturing footprint and invested in systems to handle larger volumes. It also strengthened its senior leadership and governance, improving decision-making and preparing to accelerate growth.

Acquisitions are also playing an important role in the company’s growth. In 2024, NP Aerospace acquired a European business that added 20% to its revenue. Future acquisitions are expected to boost revenues further.”

The company’s reputation has evolved as well. Thanks to investments in business development, sales and product testing, NP Aerospace eventually found that it no longer needed to go out to customers and convince them to buy. “They were coming to us,” says Kempston.

Advice for entrepreneurs

Although the defence sector is complex and specialized, some of Kempston’s biggest lessons learned are universal. His advice to other entrepreneurs:

• Understand your numbers—especially your cash flow. Even strong businesses can be vulnerable without disciplined cash management.
• Be ready for surprises. Banks may not respond the way you expect, and growth plans can shift quickly.
• Build resilience. Diversify your customers, markets and revenue streams to avoid overdependence.
• Seek out financial partners who will take the time to understand your business. Don’t assume lenders will automatically support you.
• Stay coachable. “Successful leaders value the insight and expertise of others,” Kempston says.
• Choose strategies you can realistically execute. Out of numerous options, the company pursued the ones it best could commit to and achieve—and those decisions paid off.

The early cash-flow challenges—and the work required to recover from it—was stressful and reinforced how unpredictable an entrepreneur’s journey can be, says Kempston. But today, NP Aerospace is building something that will last and is positioned for significant global expansion.

Next step

Find out how BDC’s Growth Driver Program could help your business reach its next level of growth.

You can also contact us if you think you need our support or assistance in securing your place in the defence sector.