KKR & Co. has agreed to sell aerospace and defense manufacturer Novaria Group to fellow private equity firm Arcline Investment Management in a deal valued at $2.2bn, marking one of the year’s largest sponsor-to-sponsor transactions in the industrials sector, according to sources cited by Reuters.

Based in Fort Worth, Texas, Novaria supplies precision components and processes for aircraft, drones, and defense systems. Since acquiring the company in 2020, KKR has expanded it through 13 add-on acquisitions, transforming it into a leading supplier across commercial and military aerospace markets.

The transaction also highlights the rebound in aerospace deal activity, driven by the recovery in aircraft manufacturing and renewed investments in the defense supply chain amid rising geopolitical tensions.

Under KKR’s ownership, Novaria grew into a diversified platform serving both commercial and defense markets. The firm’s employee ownership model will grant cash payouts to Novaria staff following the transaction.

The sale to Arcline comes as private equity exits begin to recover after a period of subdued dealmaking. It follows a string of strategic portfolio sales by KKR, which recently reported record earnings and strong performance from its private equity platform.

If you think we missed any important news, please do not hesitate to contact us at news@pe-insights.com.

Can`t stop reading? Read more.