GCG’s Q4 2020 A&D 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:
- Q4 2020 witnessed strong public market performance across all A&D sectors as well as the S&P 500 as certainty around the election and the promise of multiple vaccines came into view. Compared to the indices tracked in this update, the S&P 500 significantly outperformed all others over the past 12 months. Besides the S&P 500, all other indices were in negative territory, but all four A&D indices had positive Q4 performances with A&D Components / Systems (+39.6%) and Aircraft / Engine OEM (+38.1%) leading the way. Impacts of the pandemic continue to evolve with respect to global demand for air travel while the $741 billion National Defense Authorization Act (NDAA) for FY21 was enacted on New Year’s Day.
- There were 73 transactions within the A&D industry involving United States based targets or acquirers, representing a robust increase compared to 52 in Q3 and just 28 in Q2. 87% of Q4 transactions involved strategic acquirers with the remaining 13% representing platform acquisitions by financial buyers.
- Categorically, approximately 46.6% of transactions took place in the Aerospace industry, vs. 23.3% in the Defense IT/Services, 20.5% in Defense, and 9.6% in Space. Representative transactions are further highlighted in the report.
Click here for the full update.