Valuation appetite held firm into Q3 2025. The last twelve months saw 122 transactions (24 in Q3) with median multiples of 17.82× TEV/EBITDA and 3.22× TEV/Revenue, reflecting persistent competition for IP-rich, defense-electronics and space-adjacent assets.
Commercial demand stayed resilient on international traffic strength and OEM ramp plans, while defense visibility benefited from sustained modernization priorities (hypersonics, C5ISR, space architectures).¹ ³ ⁶
Policy and budget narratives continued to shape market sentiment. However uncertainty abounds as, the Federal Government was shut down after Congress failed to pass a budget.
Mid-year outlooks highlighted robust funding pipelines and strong procurement tailwinds, with the “Golden Dome” missile-defense initiative emerging as a multi-year catalyst reshaping supply chains and portfolio strategies.¹ ² ⁴
At the same time, elevated defense spending and heightened activity across UAS, AAM, and space platforms reinforced deal momentum, even as labor shortages and supply-chain constraints persisted.⁶
Deals: 24 in Q3; LTM 122 (vs. 131 a year ago). Valuations: LTM medians 17.82× EBITDA / 3.22× revenue. Strategics leaned into vertical integration (sensors, avionics, thermal/structural) and space-ISR payloads; financial sponsors favored precision components/MRO roll-ups with sticky aftermarket. AAM remained thematically relevant, though near-term public-market exuberance cooled vs. H1; diligence increasingly weighs certification and unit-economics realism.¹ ³ ⁴ ⁵ ⁶
Strategic Acquirers: 100 of 122 LTM deals (81.97%), plus 4 PE-backed strategics (3.28%)—activity concentrated in EW/autonomy, propulsion, avionics, and space hardware/services.
Financial Buyers: 18 of 122 LTM (14.75%)—focus on precision machining, avionics MRO, and cyber/mission-engineering platforms positioned for bolt-on scale.
Despite a lower LTM count vs. 2024, ADG valuation medians continued to outpace broader industrial cohorts, supported by backlogs, modernization funding, and resilient aftermarket. Mid-year credit and industry outlooks point to improving interest-coverage and easing rate headwinds—supportive for deal underwriting—though supply/labor constraints still elongate integration timelines.³ ⁴ ⁷ ⁸
Top U.S. states by seller count (LTM): California (20), Florida (19), New York (6), Ohio (6), then Virginia (4), Washington (4), Texas (4). Cross-border participation remained healthy with buyers from India, Israel and the UK active in U.S. ISR/propulsion assets seeking NATO-compliant tech—consistent with mid-year outlooks.¹ ²
| Target | Buyer | Value ($mm) |
| Triumph Group, Inc. | Berkshire Partners LLC; Warburg Pincus LLC | $3,035.00 |
| Capella Space Corp. | IonQ, Inc. | $314.00 |
| VACCO Industries, Inc. | Roller Bearing Company of America, Inc. | $275.00 |
| Integrated Launcher Solutions Defense, Inc. | Next Dynamics Inc. | $6.00 |
| Target | Buyer | Value ($mm) |
| Aerospace Technologies Group, Inc. | Bain Capital, LP | n/a |
| Brazos Safety Systems, LLC | Altaline Capital Management, LLC | n/a |
| Target | Buyer | Value ($mm) |
| Attollo Engineering, LLC | Safran Defense & Space, Inc. | n/a |
| Aeroservicios USA, Inc. | CSI Leasing, Inc. | n/a |
| Landing Gear Technologies, LLC | Setna iO, LLC | n/a |
| Optical Sciences Corporation | Valkyrie Enterprises, LLC | n/a |
| Cal-Draulics, Inc | Advanced Manufacturing Company of America, Inc. | n/a |
| Precise Flight, Inc. | Signia Aerospace, LLC | n/a |
| ElectroMagnetic Systems, Inc. | Voyager Technologies, Inc. | n/a |
| Sheltair Aviation Services LLC | Aero Centers | n/a |
| VK Integrated Systems, Inc. | EOTECH, LLC | n/a |
| S4 Inc. | Knexus Research LLC | n/a |
Source S&P Capital IQ as of 10/2/2025 and PCE Proprietary Data
Opportunities: Commercial traffic strength and OEM production normalizations should keep civil aero assets bid; defense platforms (C5ISR, hypersonics, space) retain multi-year demand signals.¹ ³
Risks: Labor/talent scarcity, materials tightness (e.g., titanium sponge), and the Federal Budget process, policies and tariff uncertainty can extend diligence and integration timelines; AAM certification slippage would temper euphoria.² ³ ⁵ ⁹
Predicted Activity: Continued cross-border bolt-ons in precision tooling, ISR payloads, and space electronics; sponsor-backed strategics to accelerate roll-ups to capture synergies into 2026.¹ ²
David Jasmund |
Michael Rosendahl |
Eric Zaleski |
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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 Sources:
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