GCG’s Q3 2020 Aerospace & Defense Industry Update provides an overview of the latest trends in the sector, including recent equity market performance, valuation multiples and transaction activity.
Key findings include the following:
- Q3 2020 initially continued the recovery seen in Q2 for many public equities before ending the quarter near or below where they started as election uncertainty began to weigh on sentiment. Across the indices tracked in this update, the S&P 500 significantly outperformed all others over the past 12 months. All other indices were in negative territory, but Defense Tier 1 (+0.7%) and Defense Component/Systems (+2.3%) had positive performances in Q3. Impacts of the pandemic continue to evolve with respect to global demand for air travel while FY21 defense spending will be subject to a continuing resolution (CR) which runs through December 11. The CR was signed September 30th and keeps agencies running under 2020 funding levels for the next 10 weeks, past the upcoming presidential election.
- There were 52 transactions within the A&D industry involving United States based targets or acquirers, representing a significant rebound of activity from the 28 transactions in the second quarter71% of Q3 transactions involved strategic acquirers with the remaining 29% representing platform acquisitions by financial buyers.
- Categorically, approximately 52% of transactions took place in the Aerospace industry, vs. 19% in the Defense IT/Services, 19% in Defense, and 10% in Space. Representative transactions are further highlighted in the report.
Click here for the full update.