Aerospace, Defense & Government Contracting Q3 2019

Aerospace Defense Government Q3

M&A Transaction Trends

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)

Source S&P Capital IQ as of 10/10/2019 and PCE Proprietary Data

M&A Industry Trends

3D Printing Market Expected to Grow 

The 3D printing market has been identified as a key technology to reduce overall manufacturing time and raw materials, which will result in cost savings for aircraft manufacturing. The global aerospace and defense 3D printing market is currently estimated at $1.56 billion and is expected to grow to $5.9 billion by 2026 at a CAGR of around 15.93%.¹

New Cybersecurity Standards are Coming by 2020

The United States DoD announced a new set of cybersecurity contractor standards to be implemented by January 2020, called the Cybersecurity Maturity Model Certification. Regulatory-compliant software is an important differentiator when bidding for defense contracts; therefore, Cybersecurity Maturity Model Certification will be vital when bidding for the future.²

Raytheon Co. and United Technologies Corp Merger Moving Ahead

After making headlines in June of this year, Raytheon Co. and United Technologies Corp (UTC) have agreed to terms and plan to hold shareholder meetings in Florida and New York on October 11th, 2019, to approve the merger. The combined company will have a value of over $100 billion and is expected to close in early 2020.³

US to Impose $11 Billion in Tarrifs on Imports From Europe

After years of criticism of the European and the American government paying subsidies to Airbus and Boeing respectively, the World Trade Organization (WTO) has ruled that the US may impose tariffs on $11 billion of imports from Europe. The EU has also filed a complaint for $12 billion of tariffs against the US, but this was nine months after the US complaint. The tariffs are expected to go into effect by 2020 and are expected to dent Airbus’ commercial and civil sales.4

Largest M&A Transactions Closed

Target Buyer Value($mm)
Exotic Metals Forming Company LLC Parker-Hannifin Corporation $1,725.00
Hanwha Aerospace USA Hanwha Aerospace Co., Ltd. $295.3

Source S&P Capital IQ as of 10/10/2019 and PCE Proprietary Data

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Contacts

David Jasmund

 

David Jasmund

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Michael Poole

 

Michael Poole

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407-621-2112

mpoole@pcecompanies.com


Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. Wood, J. (2019, September 24). Forbes.com “3D Printing’s Soaring Impact On Aviation And Aerospace. U.S.A.”
  2. Under Secretary of Defense for Acquisition & Sustainment Cybersecurity Maturity Model Certification.”
  3. Singer, S. (2019, September 5). Harrtford Courant. “UTC and Raytheon schedule October shareholder meetings to approve merger.”
  4. Peker, E. (2019, September 16). WSJ.com. “EU Braces for U.S. Tariffs Over Airbus Dispute.”
David Jasmund

 

David Jasmund

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