In this M&D M&A Industry Update, we explore the M&A activity and projections for the Aerospace & Defense area within the M&D industry. Our Manufacturing & Distribution Practice Group experts share their insights on the current state of the Aerospace & Defense M&A market and look at the factors influencing the broader M&D industry.
Select Insights:
- M&A deal volume in the Aerospace & Defense (“A&D”) area was marginally up by 1.8% in Q2 2024 when compared to the previous four-quarter average. The YTD 2024 volumes are on par with the M&A volume levels of YTD 2023 and 2022. As global military spending increases, we see it start to support the A&D area more than the broader M&A market which has seen a consistent pullback year over year in deal activity since 2021.
- Valuation multiples in the A&D area declined 17.8% in Q2 2024, averaging 11.8x EBITDA during the period (see chart I, page 2). We will see if this trend continues throughout the year as new investments continue to enter the sector or if an increase in M&A volume will increase the average valuation multiple.
- Publicly-traded A&D company performance continues to be mixed with certain sub-areas performing better than others. Aftermarket & MRO companies have seen a strong increase in valuations over the past quarter while Government IT & Services companies have declined. The overall A&D area has traded inline with the overall market as compared with the S&P 500 (see chart III, page 3).
- We continue to see the rearmament of many nations around the world with more meaningful investments in new weapons focused on dealing with Ukraine’s war with Russia and the growing conflict between Taiwan and China. This increased investment in the area, along with other new money flowing into such areas as the commercialization of space and commercial air travel, has helped to support the A&D M&A market.
To read the full Aerospace & Defense Industry Update, download below
If you are interested in discussing any of the analysis from this report, or if you would like to discuss your own transaction goals contact either Dan Shea, Managing Director, or Cody McPherson, Vice President, from our M&D Industry Group, or reach out at (800) 849-7010 or [email protected] to be directed to the appropriate team member.
Disclosure
This news release is for informational purposes only and does not constitute an offer, invitation or recommendation to buy, sell, subscribe for or issue any securities. While the information provided herein is believed to be accurate and reliable, Objective Capital Partners and BA Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person. Securities and investment banking services are offered through BA Securities, LLC Member FINRA, SIPC. Principals of Objective Capital are Registered Representatives of BA Securities. Objective Capital Partners and BA Securities are separate and unaffiliated entities.
