Key Takeaways
- • H.I.G. Capital completed the acquisition of International Aerospace Coatings, a California and Ireland-based aircraft painting solutions provider for original equipment manufacturers, signaling continued PE appetite in aerospace and defense subsectors.
- • Kinderhook Industries took Enhabit private at $13.80 per share, expanding healthcare platform presence in home health and hospice care services within the middle-market PE landscape.
- • Private equity deal activity in aerospace and defense has accelerated dramatically, with 2025 marking a record-breaking year for transaction volume as buyers deploy capital amid strong industry fundamentals and robust defense spending.
- • Multiple platform companies added bolt-on acquisitions across industrial, healthcare, and consumer sectors: Wynnchurch's EMS acquired American Metals Supply; Yellow Wood's Scholl's Wellness acquired VKTRY; Thompson Street's PestCo acquired University Termite; and Marlin Equity's Learning Pool acquired Confirm HR.
- • Institutional investors are targeting aerospace and defense subsectors—including defense technology, space, munitions, and corporate carve-outs—as portfolio reshaping and geopolitical factors drive valuations and deal structures.
Summary
Private equity activity in aerospace and defense continued its upward trajectory this week, with H.I.G. Capital completing its acquisition of International Aerospace Coatings (IAC), a provider of aircraft painting solutions to original equipment manufacturers. The California and Ireland-based company represents a strategic platform investment in a subsector benefiting from elevated defense spending and commercial aviation recovery dynamics.
The broader trend reflects sustained investor appetite for aerospace and defense M&A. Industry data indicates that deal activity has risen dramatically over the past five years, with 2025 marking a record-breaking year as transaction volumes surpassed the previous peak set in 2021. This acceleration is driven by strong market fundamentals, buyers' eagerness to deploy dry powder, and geopolitical factors reshaping defense technology, space, munitions, and corporate carve-out opportunities. Valuations in the sector continue to reflect competitive bidding dynamics, with strategic buyers and financial sponsors employing capacity, sales force, and cost absorption strategies to compete for assets.
Beyond aerospace and defense, PE platforms executed a series of complementary add-on acquisitions during the period. Kinderhook Industries completed a take-private transaction for Enhabit at $13.80 per share, strengthening its healthcare platform in home health and hospice care. Simultaneously, several sponsor-backed companies expanded through bolt-on acquisitions: Wynnchurch Capital's EMS acquired American Metals Supply to expand aluminum products distribution; Yellow Wood Partners' Scholl's Wellness acquired VKTRY to enhance its performance insole offerings; Thompson Street Capital Partners' PestCo acquired University Termite & Pest Control; and Marlin Equity Partners' Learning Pool acquired Confirm HR, an AI-powered performance management platform. These add-on strategies reflect sustained operational optimization and cross-selling opportunities within established portfolio companies.
Private credit activity also gained prominence this week, with Citi and BlackRock debuting a private credit initiative in Europe, underscoring the strategic importance of alternative financing channels for PE-backed acquisitions and refinancings in the region.
The broader trend reflects sustained investor appetite for aerospace and defense M&A. Industry data indicates that deal activity has risen dramatically over the past five years, with 2025 marking a record-breaking year as transaction volumes surpassed the previous peak set in 2021. This acceleration is driven by strong market fundamentals, buyers' eagerness to deploy dry powder, and geopolitical factors reshaping defense technology, space, munitions, and corporate carve-out opportunities. Valuations in the sector continue to reflect competitive bidding dynamics, with strategic buyers and financial sponsors employing capacity, sales force, and cost absorption strategies to compete for assets.
Beyond aerospace and defense, PE platforms executed a series of complementary add-on acquisitions during the period. Kinderhook Industries completed a take-private transaction for Enhabit at $13.80 per share, strengthening its healthcare platform in home health and hospice care. Simultaneously, several sponsor-backed companies expanded through bolt-on acquisitions: Wynnchurch Capital's EMS acquired American Metals Supply to expand aluminum products distribution; Yellow Wood Partners' Scholl's Wellness acquired VKTRY to enhance its performance insole offerings; Thompson Street Capital Partners' PestCo acquired University Termite & Pest Control; and Marlin Equity Partners' Learning Pool acquired Confirm HR, an AI-powered performance management platform. These add-on strategies reflect sustained operational optimization and cross-selling opportunities within established portfolio companies.
Private credit activity also gained prominence this week, with Citi and BlackRock debuting a private credit initiative in Europe, underscoring the strategic importance of alternative financing channels for PE-backed acquisitions and refinancings in the region.
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