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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Blue Skies and Sunshine as Airline Stocks Soar in the Summer

U.S. airline stocks are on track to achieve their strongest monthly performance since 2021, driven by a surge in travel demand during the summer months and favorable fuel prices. Despite concerns about inflation and an economic slowdown, the post-pandemic rebound in travel spending remains robust. Experts predict a record number of passengers traveling between June and August, signaling a promising outlook for the airline industry. While some analysts remain cautious about a potential slowdown in demand, the current rally in airline stocks has drawn significant interest from investors.1

Technology Continues to Revolutionize the Aerospace & Defense Industry

The aerospace and defense industry is experiencing transformative advancements through cutting-edge technologies. According to The Business Research Company, 3D printing, artificial intelligence (A.I.), and blockchain are the top three technologies shaping this sector. Major companies are utilizing 3D printing to enhance the design and resistance of drones and machines. A.I. is driving efficiency improvements, from enhancing urban air mobility to predictive maintenance. Additionally, blockchain is adopted to monitor aircraft part performance during manufacturing. Substantial growth in the global aerospace and defense market is expected to continue as these technologies evolve.2

Munitions Shortages Remain a Key Issue for the U.S. in the War in Ukraine

The U.S. faces challenges in restocking munitions amidst the prolonged Ukraine war, hindering efforts to increase the production of critical weaponry. Shortages of chips, machinery, and skilled workers have hampered plans to replenish stockpiles, leaving the Pentagon and defense industry concerned about deterrence against enemies. More than a year after Russia invaded Ukraine, the constraints on vital munitions have emerged, highlighting the complexities of maintaining sufficient supplies during ongoing global conflicts.3

US and India Team Up on Defense to Counter China's Aggressiveness

The U.S. and India have pledged to enhance their defense-industry ties, sharing cutting-edge technology to address China's increasing assertiveness in the region. The partnership will focus on intelligence, reconnaissance, surveillance, aircraft engines, and munitions. India is set to become a logistics hub for U.S. and allied craft. The joint roadmap aims to revolutionize cooperation between their defense industries and grant India access to advanced technologies through co-production. This initiative reflects a broader U.S.-India strategy on critical and emerging technologies to strengthen partnerships in Asia.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Maxar Technologies Inc.
  • Advent International Corporation; British Columbia Investment Management Corporation
  • $6,570.00
  • BLR Aerospace, LLC
  • Ducommun LaBarge Technologies, Inc.
  • $115.00
  • BBA Logistics
  • Grupo Traxión, S.A.B. de C.V.
  • $10.00
  • Pinnacle Solutions, Inc.
  • Akima, LLC
  • n/a
  • 3B Aviation, Inc.
  • FlyUSA, LLC
  • n/a
  • Adranos, Inc.
  • Anduril Industries, Inc.
  • n/a
  • Spaceflight, Inc.
  • Firefly Aerospace Inc.
  • n/a
  • Yingling Aircraft, Inc.
  • AE Industrial Partners, LP
  • n/a
  • VDL-5 Technologies, Inc.
  • Trident Development Corporation
  • n/a
  • SpinLaunch Inc.
  • Undisclosed
  • n/a

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Duotech Services, Inc.
  • Bernhard Capital Partners Management
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Epps Air Service, Inc.
  • SAR Trilogy Management, LLC
  • n/a

 

Source S&P Capital IQ as of 7/7/2023 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Eric Zaleski

Chicago Office

847-239-2466 |

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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. 1. Medha Singh. “Airline Stocks Set for Best Month in Two Years on Summer Rush, Lower Fuel Prices” Reuters, June 30, 2023.
  2. 2. The Business Research Company. “The Aerospace And Defense Market In 2023-2032” Bloomberg, May 30, 2023.
  3. 3. Doug Cameron. “U.S. Struggles to Replenish Munitions Stockpiles as Ukraine War Drags On” The Wall Street Journal, April 29, 2023.
  4. 4. Nick Wadhams & Peter Martin. “US and India Renew Push to Deepen Defense Industry Ties” Bloomberg, June 5, 2023.
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