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:
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- M&A Activity Surges Amid Rising Geopolitical Risk: Deal volume in the A&D sector increased ~20% quarter-over-quarter, reaching the highest quarterly total since 2022. The acceleration was driven by heightened global tensions and a growing urgency among nations to secure critical capabilities in anticipation of new conflicts.
- Valuations Continue to Rise on Strategic Demand: M&A precedent multiples rose to 13.2x EBITDA, reflecting strong competition for high-quality defense and aerospace assets. Platforms supporting munitions, space systems, and surveillance technologies saw particularly elevated pricing.
- U.S. Policy Ambiguity Fuels Allied Defense Spending: With the Trump administration signaling a reduced commitment to NATO and Ukraine, many U.S. allies, especially in Western Europe, are ramping up their own military investments, driving M&A across regional defense supply chains as governments seek to boost domestic production and sovereign capabilities.
- Global Stockpile Pressures Drive Reinvestment: U.S. aid to Ukraine and Israel has strained domestic inventories, spurring a renewed focus on replenishment. This has led to increased acquisition activity in production, logistics, and critical component sectors tied to national readiness.
- Defense Electronics Outperforms Broader A&D Sector: The Defense Electronics segment posted the strongest valuation performance in Q1, supported by revenue growth, consistent contract flow, and demand for mission-critical technologies. Investors continued to favor companies exposed to advanced systems and high-integrity sensors.
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 either Dan Shea, Managing Director, or Cody McPherson, Vice President, from our M&D Industry Group.
Manufacturing & Distribution Practice Leadership
Managing Director
Manufacturing & Distribution Practice Leader
Dan Shea has over 25 years of experience advising business owners and executives on complex transactions, strategic initiatives, and growth opportunities. He leads the Manufacturing & Distribution Practice, and helps drive business development and transaction advisory efforts across the broader Investment Banking Group. Prior to joining the firm, Mr. Shea held senior roles at BDO Capital, Hadley Partners, WYCampbell & Company, and Ernst & Young Corporate Finance. He holds an MBA in Finance from Case Western Reserve University and a BA in Economics from the University of Michigan. Dan has been cited for his expertise by various publications including The Wall Street Journal, Dow Jones’ Private Equity Analyst, U.S. News & World Report, and other leading publications.
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.
