GCG’s Q2 2019 Aerospace & Defense M&A Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples and the state of the middle-market M&A environment.
Key findings include the following:
- In Q2 2019, the Aerospace & Defense (“A&D”) industry maintained strong overall performance, outpacing the broader U.S. equity market for the second straight quarter. On a 3-year period ending June 30, the S&P 500 returned 39.9%, underperforming overall gains by various segments of the A&D industry. Headlines regarding Boeing’s 737 MAX aircraft continued during the quarter, weighing on Boeing’s share price, however, strong momentum in commercial air travel continues. Within defense, the FY2020 federal budget proposal reflects the Trump administration’s plan to increase Pentagon spending.
- There were 55 transactions within the A&D industry involving United States based targets or acquirers. 82% of Q2 transactions involved strategic acquirers with the remaining 18% representing platform acquisitions by financial buyers. Acquisitions by strategic buyers who are already backed by private equity firms blur the line between the two categories and represent a meaningful driver to industry activity.
- Categorically, approximately 64% of transactions took place in the Aerospace industry, vs. 14% in the Defense IT/Services, 18% in Defense, and 4% in Space. Representative transactions are further highlighted in the report.
Click here for the full update.