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:
- Q3 2024 M&A Performance: M&A deal volume in the Aerospace & Defense (A&D) sector dropped by 11.8% compared to the prior four-quarter average, reflecting the market’s hesitancy ahead of the federal election. Valuations followed the same downward trend, decreasing by 37.9%, with EBITDA multiples falling to 8.9x.
- Post-Election Optimism for M&A Activity: Following the Republican sweep and Trump’s election, M&A activity is expected to rebound in Q4 and Q1 2025. Pro-business policies, including lower corporate taxes, deregulation, and protectionist measures like tariffs (targeting China), are likely to stimulate growth in the US A&D sector.
- Growth Opportunities in the Space Sector: Deregulation under Trump’s administration is anticipated to reduce bureaucratic hurdles in the heavily regulated space industry. Additionally, Elon Musk’s role as a presidential advisor is seen as a significant advantage, likely to accelerate innovation and investment in the space sector.
- Risks for Government Contractors from the Department of Government and Efficiency (DOGE): The newly formed DOGE, led by Elon Musk, aims to streamline government processes and improve efficiency. While Musk’s influence is positive for the space sector, the department’s potential budget cuts and reduced spending on government contractors may lower earnings across the sector. This could result in less capital for M&A initiatives and create uncertainty for companies heavily reliant on government contracts. All said, we believe that deregulation and lower taxes will outweigh budget cuts and spur M&A activity.
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.
Cody McPherson Selected for ACG Los Angeles’ 2025 Rising Stars Program
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.
