Buyout firms are supposed to sell their companies, because that's how they hand cash back to the investors who funded them in the first place.
Sometimes the company is too good to let go, and that's the case Bain Capital is making to a fresh round of investors.
Bloomberg reported Thursday that Bain Capital is talking to new investors about a continuation vehicle for one of its aerospace holdings. In a continuation deal, the buyout firm sells the company to a new fund it controls, raising fresh capital from a different set of investors.
Original investors get their cash back, new investors take their place, and the asset stays inside Bain under a different umbrella.
The structure has gone from niche to standard, with continuation vehicles growing 62% year over year and roughly 37% per year since 2022, according to Bain & Company's 2026 outlook. They've become the default move when a buyout firm runs out of fund life but doesn't want to give up the company.
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Bain Capital has been busy in aerospace for years, owning or having owned MRO Holdings, ITP Aero, Aerospace Technologies Group, APP Jet Center, and Jamco. Defense budgets are climbing and commercial travel is back near record levels, so the cash flows underneath those companies have been strong.
Aerospace is a continuation vehicle's dream sector, with long product cycles, multi-year backlogs, and predictable revenue - the exact recipe for a fund that wants to hold longer.
Bain has run multi-asset secondary deals before, including a $1 billion-plus transaction spanning five portfolio companies, so the playbook is familiar.
The big question is pricing, since continuation vehicles need a fair-market valuation that satisfies both the original investors cashing out and the new ones buying in.
Deal structure matters too, as some continuation vehicles include extra capital for acquisitions or growth spending while others are pure rollovers.
The next signal will be the name of the aerospace firm and the dollar size of the vehicle.
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