Financial Pressure on Aerospace Suppliers Creates Opportunities for Private Equity
Demand from aircraft manufacturer giants soared after the global air travel slump during the pandemic. As a result, aerospace suppliers attempting to keep up with the demand face tighter lending standards from regional banks following the collapse of Silicon Valley Bank and First Republic Bank. Armed with record levels of cash, private equity firms have stepped in to fill the gap, providing liquidity to suppliers struggling to meet production demand for more planes and parts.1
Satellite Operators Continue to Merge
SES and Intelsat are the two latest examples of companies attempting to merge and grow market share to remain competitive in the industry. The merger between SES and Intelsat would be valued at more than $10 billion, including debt. The combined company would be better positioned to compete with Starlink, the fast-growing satellite-internet service operated by Elon Musk’s SpaceX.2
The Pentagon Seeks Help from Startups to Keep Pace with China’s Military
The Pentagon is attempting to encourage private capital into the defense sector amid concern that consolidation in the industry has stifled innovation and made companies in the space too reliant on government funding. The initiative aims to produce new weapon defense technologies from more efficient and agile suppliers. This past year, an estimated $6 billion of private capital flowed into the U.S. defense and aerospace sector.3
Department of Defense to Increase Small Businesses in the Defense Industry
The U.S. Department of Defense has announced increased efforts to attract small businesses to join the defense industrial industry, providing opportunities for them to contribute to national security and creating a more diverse and innovative landscape. The measures include simplifying procurement processes and increasing outreach efforts to small businesses.4
Largest Transactions Closed
- Aviation & Missile Solutions, LLC
- Undisclosed Investors
- Global Technology And Management Resources, Inc.
- Castellum, Inc.
- ZIN Technologies, Inc.
- Voyager Space Holdings, Inc.
- Herley Industries, Inc.
- Cobham Advanced Electronic Solutions Inc.
- Constant Aviation, LLC
- Flexjet, LLC.
- Launcher Inc.
- Western Jet Aviation, Inc.
- StandardAero, Inc.
- Compendium Federal Technology, LLC
- Boathouse Capital
- IF Armor International, LLC
- The Armored Group, LLC
- Dzyne Technologies Incorporated
- Highlander Partners, L.P.
Other Financial Buyer Transactions Closed
- Frontgrade Technologies
- Veritas Capital Fund Management, L.L.C
Other Strategic Buyer Transactions Closed
- Blackhawk Modifications, Inc.
- AVEX, Inc.
Source S&P Capital IQ as of 4/10/2023 and PCE Proprietary Data