BeBeez’s monthly column dedicated to carve-outs, in collaboration with Newport & Co. – This month’s top global carve-out news
In the European private equity market, the reference model has historically been the closed-end fund. This model has proven highly effective over time in mobilizing capital, professionalizing companies, and generating returns for investors, with a clear objective: maximizing IRR within a defined time horizon. The fund’s structure, based on predefined cycles of raising, investing, and divesting, necessarily implies a predetermined duration of the capital and an exit logic that guides many strategic and operational decisions, including timing, use of leverage, and value creation paths.
Alongside this model, a different approach is gradually gaining ground, inspired by consolidated experiences in Northern Europe, particularly Sweden: that of holding companies with permanent capital, often referred to as perpetual compounders. In this case, there is no vehicle life cycle or forced exit. The holding company operates as a long-term owner, with the objective of systematically reinvesting the cash flows generated by its investee companies to support organic growth and new acquisitions. The focus is not on optimizing returns over a limited period of time, but on maximizing cumulative value over time, i.e., the MOIC, through compounding and recycling the same invested euro multiple times.
The difference between the two models is not a question of “better” or “worse,” but of structure and objectives. A closed-end fund must optimize returns over a defined period, while a perpetual compounder can afford to allocate capital over a multi-decade horizon, accepting more gradual but potentially more sustainable value creation paths. In this context, profits are not extracted to meet investors’ liquidity needs, but are continuously reinvested within the platform.
This distinction becomes particularly relevant in the world of corporate carve-outs, which represent a specific and complex niche in the private equity market. Carve-outs involve assets sold by large groups because they are deemed no longer strategic, often lacking full operational autonomy, and with organizational structures, systems, and processes designed for a multinational context. Creating value requires time, discipline, and a significant investment in building the organization as an independent entity.
In this segment, the closed-end fund model naturally tends to favor rapid restructuring and financial optimization, with the goal of making the asset exit-ready in a relatively short timeframe. This isn’t because it’s the wrong approach, but because it’s consistent with the vehicle’s timeline and performance constraints. It’s no coincidence that many private equity funds don’t engage in carve-outs precisely because of the complexity and time horizon required; when they do, the focus is often on accelerated performance normalization.
The perpetual compounder model fits in seamlessly with this context. The absence of exit pressure allows carve-outs to be approached as a process of industrial transition, not as a short-term project. Acquired companies are not dismantled or forcibly merged, but rather guided toward full autonomy, preserving their identity, skills, and human capital. The goal is not to prepare the company for the next owner, but to build it as an independent champion in its segment, reinvesting the cash flows generated within the holding company over time without extracting value through sales or dividends.
For the corporate finance and M&A advisory community, this structural difference has significant implications. A holding company with perpetual capital does not enter and exit the market based on fundraising cycles, but remains a constant and predictable buyer over time. This allows for the development of long-term relationships, a continuous pipeline, and the ability to evaluate industrial opportunities with a time horizon consistent with the complexity of the assets involved.
In particular, perpetual compounders respond to a common need of both entrepreneurs and industrial groups: obtaining a fair price for what is being sold, but above all, identifying a definitive, credible, and responsible solution, not an intermediate transfer of ownership. Whether it involves the sale of a company or the divestment of a no longer strategic asset, the underlying question is increasingly the same: who will be the long-term owner and what industrial project will be pursued.
In a corporate carve-out environment, permanent capital does not replace traditional private equity, but represents a natural complement. It offers sellers, CEOs, CFOs, boards of directors, and M&A functions of large groups a credible alternative when the goal is not simply to monetize an asset, but to ensure its sustainable industrial trajectory over time. In this sense, the sale does not mark the end of a company’s history, but the beginning of a new phase of development.
Tom Van der Haegen
Founder & CEO of Newport & Co. spa, a Benefit Corporation
This month’s top global carve-out news
Banks are revving up for Nestlé’s mineral water business carve-out.
The sale of Swiss giant Nestlé’s mineral water division, now Nestlé Waters, has further accelerated, with banks preparing a €2-3 billion financing package to support the potential private equity deal, according to Bloomberg. The financing would be equivalent to approximately 4-6 times the division’s estimated €500 million EBITDA, valued at €5 billion. The Swiss food group reportedly launched a first round of offers this month, with Rothschild as advisor (see here a previuos article by BeBeez).
Volkswagen courted by funds for its subsidiary Everllence SE. Deal worth €5-6 billion
Major international funds are revving up their engines to acquire Everllence SE (formerly MAN Energy Solutions), Volkswagen’s heavy-duty diesel engine division, which the German automaker has decided to sell as part of its strategy to recover profitability. Bloomberg reports. The first names circulating among the potential interested funds include Sweden’s EQT, which is reportedly evaluating an offer together with Singapore’s sovereign wealth fund GIC, as well as CVC Capital Partners, Advent International, Bain Capital, KPS Capital Partners, and Clayton Dubilier & Rice. Japan’s Mitsui & Co. may also be considering the deal (see here a previuos article by BeBeez).
AE Industrial Partners acquires control of L3Harris Technologies’ space division
L3Harris Technologies has agreed to sell 60% of its space propulsion and fuel systems division to AE Industrial Partners in a transaction valued at $845 million. L3Harris aims to reduce its exposure to space activities and focus resources on defense, amid rising government military spending due to geopolitical tensions (see the press release here).
Prodotti Baumann becomes Itasprings
Prodotti Baumann srl, the Brescia-based company acquired at the end of November 2025 by the Italian company Newport&Co (see here a previuos article by BeBeez International), has been renamed Itasprings (see the Linkedin post here). This operation marks the beginning of a new identity for the company, which definitively separates itself from its Swiss parent company to establish itself as an independent entity. The company, with 80 employees, targets revenues of 14 million euros and an EBITDA of more than one million euros for 2026. The new name, Itasprings, with the tagline “engineered performance in motion,” combines the company’s Italian roots with its specialization in engineering and technical excellence in the springs sector.
Stahl Completes the Carve-Out of its Leather Processing Chemicals Division
Stahl, a global leader in specialty coatings for flexible materials, has successfully completed the spin-off of its wet-end leather processing chemicals business. Effective January 1, 2026, the wet-end leather processing chemicals division will operate as a fully independent company named Muno, under the control of Wendels, a French investment group. The intention to divest the business was announced in November 2024 (see the press release here).
Sullivan Street Closes Deal for Zenix Aerospace, the Former Aerostructures Division of Senior plc
Street Partners, a UK-based mid-market buyout firm, has completed the acquisition of Senior plc’s Aerostructures business, which it has renamed Zenix Aerospace and will establish as a new, independent group focused exclusively on aerostructures and aircraft engines. The transaction was originally announced in July 2025 and represents Sullivan Street’s largest transaction to date, with a total consideration of £200 million. Zenix Aerospace comprises seven companies: AMT, Damar, Jet Products, and Ketema in the United States; Weston in the United Kingdom; UPECA in Malaysia; and the group’s subsidiary in Thailand (see the press release here).
Annual Aurelius Survey: Carve-Outs on the Rise in 2026
The eighth annual Aurelius Carve-Out Survey predicts that corporate carve-outs will continue to grow in 2026, with nearly 80% of respondents expecting an increase in the number of companies globally planning to divest from non-core assets, consistent with the 2025 survey. A return to strategic assets is the primary driver of corporate divestment plans for 2026, cited by 73% of respondents (up from 70% last year). Conversely, deleveraging has fallen dramatically to the bottom of the agenda: only 5% cite debt reduction this year, compared to 9% last year and 52% two years ago (see the press release here).
KKR, Here’s Why the Number of Carve-Outs Is Growing Worldwide
We’re seeing a surge in corporate carve-outs, as multinationals seek to reduce their exposure to cyclical or low-return sectors to instead focus on more sustainable, higher-margin opportunities. This is reflected in KKR’s 2026 outlook, which notes, for example, that in Europe, the most recent Pitchbook data suggests carve-outs will approach €60 billion in 2025, a substantial portion of the total value of private equity deals. Carve-outs can help simplify complexity and provide clearer governance, more targeted incentives, and operational separation that can foster increased margins and stable cash flow (see the KKR report here).
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