Bain Capital invests in KP Aviation; Toshiba board gives green light to shareholders on take-private

Good morning Hubsters, Craig McGlashan here, filling in on the Wire.

We’re taking off today with a look at aviation, as Bain Capital Special Situations invests in a supplier of aftermarket material and services, and I take the opportunity to plug some of our recent coverage of the sector on PE Hub Europe.

Next we have an update on the attempted take-private of Toshiba by Japan Industrial Partners, before we look at an investment by Braemont in the insurance sector.

PSG buying a stake in an analytics provider for health systems and life sciences organizations rounds out today’s deal coverage, and then we finish with a survey that asked whether asset managers are using AI in their day-to-day business.
Aviation

Bain Capital Special Situations has invested in Mesa, Arizona-based KP Aviation, a supplier of essential aftermarket materials and services.

Proceeds will be used to purchase the interests of Balmoral Funds LLC, KP Aviation’s investment partner since 2015.

KP Aviation was founded in 2001. The company’s existing management team, led by founder and CEO Kim Schulze, will stay in charge.

“KP Aviation fills a critical role in the aerospace supply chain, providing customers with mid-life, lower-cost aftermarket assets relative to original equipment manufacturer solutions, and we believe the business is well-positioned to capitalize on attractive sector tailwinds,” said Matt Evans, a partner at Bain Capital Special Situations, in a statement.

We’ve also seen some action in the aviation sector over on PE Hub Europe, including Blackstone planning to sell MB Aerospace to Barnes Group for an enterprise value of around $740 million.

Talking Toshiba
The board of Japanese conglomerate Toshiba has recommended shareholders accept a 4,620 yen per share – valuing the company at 2 trillion yen ($14.3 billion) – from a group led by Tokyo-based investment fund Japan Industrial Partners.

The board had supported the tender back in March, but had refrained from deciding whether to recommend the offer to shareholders.

So what’s changed since then? Well, according to a statement released today, the Toshiba management team had had positive feedback about the possible deal from customers, business partners and employees, while CEO Taro Shimada had stated concerns that the company’s projections for the financial years 2024 and 2025 would be “difficult to achieve if the company’s management base continues to be unstable, which may in turn result in customer attrition and employee resignations.”

“In such circumstances, it is believed that the Tender Offer Price, which has been obtained through the fully competitive and fair Process, is fair and reasonable and capable of recommendation to the shareholders to tender their shares in the Tender Offer,” the statement added.

Insurance
Braemont has invested $125 million in Austin-based Incline P&C Group, an insurance program market services firm.

Incline’s current programs cover lines including private passenger auto, cargo, commercial auto, flood, homeowners, motorcycle, pet and workers’ compensation insurance.

“The company has experienced incredible growth in premium volume and program acquisition and through this investment, we are excited to join Incline on their mission to continue to be the premier insurance program market services firm,” said Robert Covington, managing partner of Braemont, in a statement.

Health systems
PSG has made an investment in Dallas-based Loopback Analytics, a provider of analytics and data-enabled services for health systems and life sciences organizations. No financial terms were disclosed.

Loopback founder Neil Smiley will continue to serve as CEO alongside the current leadership team.

The investment will be used by Loopback to accelerate its growth.

ESG
We’ve been looking into whether the private equity industry is adopting generative AI – check out this great piece from Rafael Canton for more on that – but we’ve now got some figures on the subject.

Some 32 percent of asset managers are using AI for investment research and 30 percent for portfolio analysis, according to Linedata’s 2023 Global Asset Management Survey, in which private equity firms were among the 265 respondents.

Other figures from the report found that 57 percent of respondents said that increasing automation to drive operational efficiency was their top priority for the next year.
There also seems to be a split geographically between asset managers’ needs. While 63 percent of European managers said that further ESG integration was a high priority, up from 41 percent in 2021, in North America and APAC that figure fell to 22 percent and 32 percent respectively.

That’s it from me – Obey Martin Manayiti will be with you tomorrow.

Cheers,

Craig