CDPQ, SMBC Aviation Capital, Rcapital in aerospace deals

Advent mulls options for Evri, reports say.

Rising geopolitical challenges paired with the travel sector returning to normal following the pandemic are among the reasons private equity is keen on the aerospace and defence segments. We have two deals within the sector this morning, as Caisse de dépôt et placement du Québec and SMBC Aviation Capital have agreed to create an aircraft financing and leasing platform, and Rcapital has completed the acquisition of an aerospace and defence engineering business.

We then take a look at a potential exit, as Advent International is reportedly considering options for Evri, a UK parcel delivery company.

Teaming up

Aerospace and defence should experience “robust growth”, driven by increasing geopolitical complexities and the demand for cutting-edge technologies, Roberto Quagliuolo, deputy head of private equity and co-head of Italy at Tikehau Capital, told PE Hub Europe as part of our outlook Q&A series. It’s only January, but we’re seeing some activity already.

Caisse de dépôt et placement du Québec (CDPQ) and SMBC Aviation Capital have agreed to create a $1.5 billion global aircraft financing and leasing platform, which will operate under the banner Maple Aircraft Company Holdings.

Maple will target an initial deployment of $500 million annually over three years, according to a release. It will operate globally and focus on the latest models of aircraft. SMBC Aviation Capital will service the platform, source transactions for it and also invest alongside it.

“Building on CDPQ’s experience in the aircraft financing industry, through this new platform we will continue to provide flexible financing solutions for airlines to meet their future fleet requirements,” said Marc Cormier, executive vice president and head of fixed income at CDPQ.

The firm will look “to find the best opportunities in the commercial aircraft industry and to achieve attractive risk-adjusted returns over the long term”.

Dublin-based SMBC Aviation Capital is a global aircraft operating lease company with an owned, managed and committed fleet of more than 900 aircraft.

Ground crew

Sticking with the same sector for a little while longer, Rcapital has completed the acquisition of FGP Group, an aerospace and defence engineering business.

The group comprises FGP Systems and FGP Lufton and includes Ramp Surface Coatings. FGP Systems and FGP Lufton are based in Weymouth and Yeovil in England, respectively.

Rcapital acquired the business from 126 individual shareholders who were participants in the Cyrus Secured Loans Precision Engineering EIS Fund.

The transaction was delivered via a solvent sale of the shares in FGP Systems and Heartland Engineering.

FGP’s blue chip customers include Honeywell, Collins Aerospace, Martin Baker and Curtis Wright. It also participates in several flagship aerospace programmes including Airbus A350 and A320, Boeing 737 and 787, as well as defence platforms including the Eurofighter and F35.

These aren’t the only aerospace deals PE Hub Europe has seen in January. Earlier in the month, we reported on Synova’s exit from Vistair to Insight Partners and Liberty Hall Capital Partners. Vistair provides data management software to the aviation and defence sectors, focusing on flight operations, engineering and safety.

Delivering

Finally, we take a look at a potential exit. Advent International is considering options, including a potential sale, for parcel delivery service Evri, two sources familiar with the matter told Reuters.

Advent holds a 75 percent stake in the business, which could be valued at around £2 billion (€2.3 billion; $2.5 billion) and is working with advisers on its options, the Reuters report said.

Advent invested in Evri, formerly known as Hermes UK, in 2020. German mail order company Otto Group holds a 25 percent stake in the company.

Advent International declined to comment when approached by PE Hub Europe.