KKR to buy Circor in $1.6bn take-private deal; AEI has landed Yingling Aviation

Happy Monday, dealmakers. MK Flynn here on the Wire.

It’s a deal-packed morning, with transactions unveiled by KKR, AE Industrial Partners, and Warburg Pincus and Great Hill Partners, among others.

Let’s cut to the chase and go straight to the deals.

Flow control
Hoping to repeat the success it had with Gardner Denver and others, KKR has agreed to buy Circor International, a Burlington, Massachusetts-based maker of pumps, valves and other flow control products and services for the industrials and aerospace and defense markets, in a $1.6 billion take-private transaction.

Circor launched a strategic review last March and “engaged in extensive dialogue with a number of parties that expressed interest in acquiring all or parts of the company,” said Helmuth Ludwig, Circor’s board chair.

“Circor stands out as an innovative and trusted solution provider, manufacturing mission-critical flow control products for industrials, aerospace and defense customers,” said Josh Weisenbeck, a KKR partner who leads the New York firm’s industrials investment team. “We believe the company is in a strong position to grow and benefit from the attractive tailwinds in those markets.”

KKR is investing through its North America Fund XIII.

The firm’s track record in flow control is impressive. In 2013, KKR bought Gardner Denver for $3.74 billion, took it public in 2017 and merged it with a division of Ingersoll-Rand. Today Ingersoll Rand has a market cap of $25 billion.

KKR has invested in other flow control technologies and aerospace and defense industry suppliers, including Flow Control Group (acquired in 2021), Novaria Group (acquired in 2019) and Hensoldt (exited in Ap2022 via public market).

After the deal closes, KKR will support Circor expand its equity ownership program to allow all employees to participate in company ownership, in keeping with the PE firm’s “belief that employee engagement is a key driver in building stronger companies,” according to the deal announcement. Since 2011, KKR portfolio companies have awarded billions of dollars of total equity value to over 50,000 non-management employees across nearly 30 companies, KKR said.

Business aviation
AE Industrial Partners has acquired a majority interest in Yingling Aviation, a Wichita, Kansas-based provider of maintenance, repair and overhaul and fixed-base operator services to business aviation and government customers throughout the US.

“This investment represents the beginning of our strategic vision of creating a unique, independent platform of scale providing best-in-class services within this growing market,” said Jon Nemo, senior partner at AEI, in the deal announcement.

Based in Boca Raton, Florida, AEI has considerable experience investing and operating in business aviation, which represents one of its six core target markets. Other investments include Alpine Air, Global Jet Capital, Landmark Aviation, Solairus Aviation and StandardAero.

Employee benefits
Warburg Pincus has made a significant investment in ParetoHealth, a Philadelphia-based employee benefits provider. Great Hill Partners, which invested the target in 2019, will retain an equal stake to Warburg Pincus, alongside a significant continuing investment from the current management team.

“Employers are facing rising costs, increased volatility from things like specialty drugs and gene therapies, and claims that now extend for years,” said T.J. Carella, managing director and head of healthcare, Warburg Pincus, in a statement. “This triple threat combines to make health insurance one of the most vexing challenges for employers. ParetoHealth’s unique platform addresses these challenges and puts the employer back in control.”
This investment from Warburg Pincus aims to support ParetoHealth’s mission to make self-insurance accessible for small and midsized employers, reduce volatility, and drive down the overall cost of healthcare, according to the deal announcement.

For ongoing coverage of deals today and every day, check out the News in Brief section of PE Hub.

That’ll do it for today. I’ll be back with more tomorrow.

Until then, happy dealmaking,

MK