Defense sector draws private equity to Europe; take-private deal value soars

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

In 2025, private equity investment in Europe's aerospace and defense sectors reached its highest total value since 2022, the year Russia's invasion of Ukraine spurred European defense spending.

The value of private equity and venture capital aerospace and defense deals in Europe and the UK rose about 4.8 times year over year to $658.8 million in 2025, according to S&P Global Market Intelligence data. This growth stood out even as the value of global aerospace and defense deals more than doubled to $10.63 billion in 2025 from $4.88 billion in 2024.

In the UK, where fund rules and regulations have prevented some private equity funds from investing in defense, new funds are being launched to take advantage of the opportunity, said Dafydd Evans, a London-based managing director in Kroll LLC's investment banking practice.

US managers will not be left behind. Alongside healthcare and infrastructure, the defense sector was a top target in 2025 as the value of US-based private equity and venture capital firms' investments in Europe rose to a four-year high.

Read more about the doubling of global private equity investment in defense and aerospace in 2025.

CHART OF THE WEEK: Take-private deal value hits 4-year high

⮞ The value of take-private deals backed with private equity and venture capital increased 46.1% year over year to $238.15 billion in 2025, according to Market Intelligence data.

⮞ Powering the rise was the largest sponsor-backed take-private in history: the pending $55 billion acquisition of video game company Electronic Arts Inc. by Public Investment Fund, Silver Lake Technology Management LLC and A Fin Management LLC, announced in September 2025.

⮞ Abundant private equity dry powder, public market volatility and, notably, the availability of private credit are all factoring into the surge in take-private value.

TOP DEALS

– An investor group including private equity firms Blackstone Inc., General Atlantic Service Co. LP and Liberty 77 Capital LP agreed to acquire a 24% stake in Mexico-based bank Grupo Financiero Banamex SA de CV from Citigroup Inc. for about 43 billion Mexican pesos. Citi's banking group was Citi's financial adviser on the transaction. Skadden Arps Slate Meagher & Flom LLP, Creel García-Cuéllar, Aiza y Enríquez SC and White & Case SC are Citi's legal advisers.

– Kinderhook Industries LLC agreed to buy home health and hospice provider Enhabit Inc. in an all-cash transaction valued at about $1.1 billion. Goldman Sachs & Co. LLC is financial adviser and Jones Day is legal counsel to Enhabit. Guggenheim Securities LLC is financial adviser and Kirkland & Ellis LLP is legal counsel to Kinderhook. Wilkinson Brimmer Katcher is strategic communications adviser to Enhabit.

– Wynnchurch Capital LP agreed to purchase Arcosa Marine Products Inc., the barge business of Arcosa Inc., in a $450 million cash transaction. Wells Fargo was financial adviser to Arcosa and Gibson Dunn & Crutcher LLP was legal adviser. Paul Hastings was legal adviser to Wynnchurch.

TOP FUNDRAISING

– Novacap Management Inc. secured nearly $3.8 billion in capital commitments at the final close of Novacap Technologies Fund VII, exceeding the vehicle's target of $2.7 billion. The firm focuses on technology company buyouts.

– Updata Management LLC raised $875 million for Updata Partners VIII LP at final close. The fund seeks to invest in software businesses.

– Ascend Capital Partners Manager LP held the final close for Ascend Capital Partners Fund II LP and parallel vehicles with commitments totaling $791 million. The fund invests in healthcare companies.

MIDDLE-MARKET HIGHLIGHTS

– Arcline Investment Management LP agreed to buy Hydraulics International Inc., which manufactures military and commercial aircraft ground support equipment.

– The Vistria Group LP added commercial property underwriter Lumen Holdings LLC to its portfolio. Piper Sandler & Co. was financial adviser and Choate Hall & Stewart LLP was legal adviser to Lumen. MarshBerry was financial adviser and Winston & Strawn LLP was legal adviser to Vistria.

– Gemspring Capital LLC sold security company Security 101 to Morgan Stanley Private Equity. Security 101 designs and installs access control, video surveillance and intrusion detection systems. William Blair was financial adviser to Gemspring and Security 101 on the deal, while McDermott Will & Schulte LLP was legal counsel.

FOCUS ON: POTENTIAL PRIVATE EQUITY ASSET MARKDOWN

Private equity firms may need to mark down the valuation of their assets that are expected to be disrupted by the release of new AI models, law firm White & Case LLP said.

"There are also a lot of funds that are at the point in the cycle where they need to raise capital and make distributions to their investors. That will be another moment of truth as they're going to have to crystallize gains or losses on some of these assets," said Ken Barry, head of Europe private equity at White & Case.

Software stocks declined due to investor concerns that powerful new AI coding tools from Anthropic PBC and OpenAI LLC could disrupt the industry.

However, private equity managers are expected to assess the valuation of their assets gradually.

"It is simply not the case that entire industries and businesses are all susceptible to AI disruption," Barry said.

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For further private equity deals, read our latest "In Play" report , which looks at potential private equity-backed M&A, including rumored transactions, each week.

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