PE eyes aerospace, defense; LPs cite performance as key to re-ups

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

In 2021, private equity has been active in the aerospace and defense sector, racking up $9.76 billion in disclosed deal value globally through mid-June, according to S&P Global Market Intelligence data.

The largest transaction of the year so far, which is expected to close in the fourth quarter, involves KKR & Co. Inc.'s roughly $4.48 billion purchase of Atlantic Aviation Corp. from Macquarie Infrastructure Corp.

Venture capital firms have also been attracted to the sector, investing $6.94 billion globally across 73 rounds of funding since the start of 2021.

There will likely be more to come. Analysts see the aerospace and defense sector at a turning point, driven by geopolitical forces, technological advances and the impact of the global pandemic. The result will be corporate restructuring and M&A, which private equity is well-positioned to tackle given ample dry powder. Read about PE involvement in the sector here.

CHART OF THE WEEK: LPs globally are cautious on re-ups

➤ A Coller Capital survey shows 59% of 111 global limited partners surveyed were more likely to refuse a re-up over the next year or two, mainly due to weak PE performance.

➤ If re-ups have become highly performance-dependent, LPs may turn toward more new and emerging managers with specialized expertise.

➤ Read the full story here.

FUNDRAISING AND DEALS

* Brookfield Business Partners LP, together with its institutional partners, agreed to acquire TDR Capital LLP-backed modular leasing service provider Modulaire Group. in a roughly $5 billion deal.

* Warburg Pincus LLC is exploring a sale and other options for food processing and packaging equipment company Duravant LLC, which could get a valuation of over $4 billion, Bloomberg News reported, citing people with knowledge of the matter. The private equity firm is also leading a consortium to buy auto finance firm Exeter Finance Corp. from The Blackstone Group Inc.-managed funds.

* Funds managed by Blackstone will make an undisclosed amount of investment in workflow software developer Simpli.fi, joining existing investor and peer GTCR LLC.

* Thoma Bravo LLC will add enterprise software developer QAD Inc. to its portfolio through an all-cash transaction with an equity value of about $2 billion. Thoma Bravo Advantage, a blank-check company sponsored by the firm, completed its take-public merger with ironSource Ltd.

ELSEWHERE IN THE INDUSTRY

* Accel Partners collected an aggregate $3.05 billion in capital commitments across three new funds.

* Financial services company OpenInvest Co., which is backed by private equity firms such as Andreessen Horowitz LLC and Y Combinator, will be sold to JPMorgan Chase & Co.

* A joint venture between Oaktree Capital Management LP-managed funds and Sixth Street Partners affiliates was formed to manage an approximately $3 billion energy loan portfolio purchased from ABN AMRO Bank NV, a source familiar with the transaction told S&P Global Market Intelligence's LCD.

* Shamrock Capital Advisors LLC is selling its ownership interest in wireless infrastructure firm Mobilitie LLC to BAI Communications Pty. Ltd.

FOCUS ON: PHARMACEUTICALS, BIOTECHNOLOGY AND LIFE SCIENCES

* Foresite Capital Management LLC-backed special purpose acquisition company FS Development Corp. II will take biopharmaceutical company Pardes Biosciences Inc. public in a merger deal expected to be finalized by October.

* Ampersand Management LLC wrapped up the sale of image cytometry company Nexcelom Bioscience LLC to life sciences tools and services provider PerkinElmer Inc. for $260 million.

* Phoenix Equity Partners Ltd. will exit its investment in outsourced drug discovery service company Sygnature Discovery Ltd. in a deal with Five Arrows Principal Investments, Rothschild & Co. SCA's European private equity unit.

* Venture capital firm Koch Disruptive Technologies LLC led a $150 million series C-5 financing round for medical-device maker Shine Medical Technologies LLC.