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 Activity Rebounds Post-Election: Deal volume in the A&D sector remained flat compared to the prior four-quarter average but increased 10% quarter over quarter, reflecting renewed confidence following the federal elections. The Republican administration’s pro-business policies and deregulation have strengthened M&A appetite, leading to a pickup across key industry segments.
- Valuation Surge Driven by Market Optimism: M&A valuations rose 46.1% to 13.0x EBITDA, reversing the Q3 downturn. Increased competition for high-growth assets in space, defense electronics, and aerospace supply chains contributed to the rebound, as buyers moved forward with delayed acquisitions.
- Government-Dependent Sectors See Valuation Declines: While commercial and private-sector valuations surged, Prime Defense and Government IT & Services underperformed, reflecting concerns over budget reductions from the newly formed DOGE. The Musk-led initiative to streamline government spending has created uncertainty for contractors reliant on federal funding, leading to lower valuations and more selective dealmaking.
- Aftermarket & MRO Lead Industry Gains: The Aftermarket & MRO sector outperformed the broader A&D market, benefiting from strong demand for commercial aviation recovery. As airlines and defense agencies extend the lifecycle of aging aircraft fleets, buyers are actively pursuing acquisitions in this segment.
- Space Sector Positioned for Growth: Deregulation and Musk’s federal influence are expected to fuel M&A in launch systems, satellites, and space infrastructure heading into 2025.
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 Practice.
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.
