In this M&A Industry Report, 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:
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- Sustained A&D M&A Momentum Into Q3: Deal activity remained elevated in Q3 2025 with 123 transactions, slightly above 121 in Q2 and consistent with the stronger run-rate over the last three quarters. While below the 135-deal peak in Q1, the pace reflects a durable recovery from the Q3 2023 trough and strategic urgency across the sector.
- Valuations Normalize but Remain Resilient: Public-market TEV/EBITDA multiples held at 11.4x in Q3 2025, down from 13.6x in Q1 but still above the 8.9x low in Q3 2024, signaling confidence in long-cycle defense demand and backlog strength. Pricing remains strongest for scarce, mission-critical platforms with multi-year visibility. Steady deal flow alongside modest multiple pullback suggests disciplined underwriting.
- Aircraft & Engine OEMs Lead Recent Valuation Gains: Aircraft & Engine OEMs posted the clearest improvement in trading multiples versus the broader A&D index, supported by strengthening delivery schedules, incremental supply-chain progress despite constraints, and sustained fleet replacement demand. Investors continue to reward OEMs for improved earnings visibility and production stability.
- Components & Systems Continue to Lag: Certain Components & Systems groups trailed other subsectors as procurement timing and award delays weighed on near-term conversion. Budget realignments and contracting frictions across lower-priority spend categories have pushed out order flow, leaving sentiment softer versus mission-critical electronics exposure.
- Sustained A&D M&A Momentum Into Q3: Deal activity remained elevated in Q3 2025 with 123 transactions, slightly above 121 in Q2 and consistent with the stronger run-rate over the last three quarters. While below the 135-deal peak in Q1, the pace reflects a durable recovery from the Q3 2023 trough and strategic urgency across the sector.
To read the full Aerospace & Defense Industry Report, 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 Cody McPherson, Vice President, from our M&D Industry Practice.
Manufacturing & Distribution Practice Leadership
Cody McPherson is a Vice President, focused on the Aerospace & Defense area. He is responsible for business development and deal sourcing, deal analysis and execution, structuring and negotiating transactions, and coordinating closings. Prior to joining Objective, Investment Banking & Valuation, Mr. McPherson was Vice President at Salem Partners, a LA based middle market investment bank and wealth management firm where he advised on middle market sell-side and buy-side merger and acquisition transactions as well as private capital raises. Mr. McPherson holds a Bachelor of Commerce degree with a major in Finance from The Sauder School of Business at the University of British Columbia. He holds FINRA Series 79 and Series 63 licenses and is a Registered Representative of BA Securities LLC, Member FINRA SIPC.
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.
