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KKR took control of Fort Worth, Texas-based Novaria in early 2020, and since then the group has added 13 new companies, KKR partner Joshua Weisenbeck told Reuters. Sign up here. Novaria's companies provide parts and processes for aircraft as well as drones and submersibles. "You've seen reinvestment in the defense supply chain globally and in certain cases the percentage of GDP spent on defense growing," Weisenbeck said. The war in Ukraine and doubts about the U.S. commitment to NATO have pushed up military spending around the world. Arcline declined to comment. Novaria Group CEO Bryan Perkins said the transaction represented "the success of our long-standing partnership with KKR and the dedication of the Novaria team." Many private equity firms have been struggling to profitably sell companies they bought during a long period of lower interest rates, slowing returns of capital to investors. The number of exit deals - where private equity and venture capital firms cash out on their investments through a public listing, selling to another investor, or rolling an asset into a new vehicle - rose in the third quarter from the second, according to data provider S&P Global Market Intelligence, but the total value of those deals was much lower than in the previous three months. KKR executives played down concerns about private markets' fundraising and deals last week as they reported quarterly earnings that showed rising performance income from the private equity business. The Novaria deal is an example of a revival of transactions between private equity firms, Weisenbeck said. "We're seeing a reopening of the sponsor-to-sponsor M&A trade." KKR offers equity to rank-and-file employees in its portfolio companies, meaning Novaria's employees will get cash when the deal closes. The company says the program has led to higher revenue, improved productivity and lower turnover at its portfolio companies. Reporting by Isla Binnie and Sabrina Valle in New York; Editing by David French and Kate Mayberry Our Standards: The Thomson Reuters Trust Principles., opens new tab Isla Binnie reports on how company directors and executives manage stakeholder and shareholder interests, with a focus on compensation, corporate crises, dealmaking and succession. She also covers how politics, regulation, environmental issues and the broader economy affect boardroom discussions. Isla previously covered business, politics and general news in Spain and Italy. She trained with Reuters in London and covered emerging markets debt for the International Financing Review (IFR). NY-based correspondent reporting on some of the largest deals in Healthcare and Industrials. Previously based in Houston, covering global operations of U.S. oil majors. Sabrina has a two-decade career in Business reporting, with a strong background in source-based enterprise and investigations. She previously worked at Bloomberg, Washington Post and has been based in Rio and D.C. covering large corporations, including finance, corruption and geopolitics.
