Preferential cleavage: (Ac)2-L-Lys-D-Ala-|-D-Ala. Also transpeptidation of peptidyl-alanyl moieties that are N-acyl substituents of D-alanine. The presence of this gene in the chloroplast genome suggests there may be an unsuspected vestigal peptidoglycan layer in this organism's chloroplasts. Belongs to the transpeptidase family.