BOSTON, May 29, 2024
/PRNewswire/ -- Capstone Partners, a leading middle market
investment banking firm, released its Aerospace, Defense,
Government, & Security (ADGS) Annual Report, which
features insights into the current environment as well as a review
of last year including merger and acquisition (M&A)
activity.
U.S. Aerospace & Defense (A&D) sector earnings and
shipments improved in 2023, surpassing pre-pandemic peaks while
M&A activity fell, mirroring the broader market with knock-on
effects of higher interest rates. Strong sector fundamentals and a
stabilizing financing environment point to future M&A activity
being more likely up than down.
U.S. A&D sector shipments returned to 2018 peaks, rising 17%
year-over-year (YOY) in 2023. A&D sector public company EBITDA
earnings increased 10% YOY in 2023 (after adjusting for one-off
charges at defense primes) outperforming flat S&P 500
earnings.
The number of A&D sector M&A transactions fell 12% YOY
in 2023 and were 24% below pre-pandemic 2019 levels. Similar trends
were seen across most industries in North
America. The decline in transaction activity was among
private equity buyers (who were integral to the sector) and
highlights the impact of interest rate increases. Valuation metrics
remained relatively stable as size and sector continue to be
significant drivers of M&A transaction multiples. Founders
comprised the majority of sellers, driven by economic and personal
factors.
The report, available for download below, provides in-depth
analysis and commentary on the overall health and outlook of the
ADGS industry and discusses topics including:
- How demand for commercial air travel and aircraft returned,
while production constrained supply.
- Defense spending being capped at 1% by Fiscal Responsibility
Act.
- Government Information Technology (IT) Services activity has
continued but has been increasingly selective.
- Security Solutions & Cybersecurity strong fundamentals and
outlook.
- Training & Simulation services have offered safety amid
chaos.
- Reasons for cautious optimism in M&A activity.
To access to full report, click here.
To learn more about Capstone's Aerospace, Defense,
Government & Security Group or to discuss the content of
this report, please do not hesitate to get in touch.
ABOUT CAPSTONE PARTNERS
For over 20 years, the firm has been a trusted advisor to
leading middle market companies, offering a fully integrated range
of investment banking and financial advisory services uniquely
tailored to help owners, investors, and creditors through each
stage of the company's lifecycle. Capstone's services include
M&A advisory, debt and equity placement, corporate
restructuring, special situations, valuation and fairness opinions
and financial advisory services. Headquartered in
Boston, the firm has 175+
professionals in multiple offices across the U.S. With 12 dedicated
industry groups, Capstone delivers sector-specific expertise
through large, cross-functional teams. Capstone is a
subsidiary of Huntington Bancshares Incorporated
(NASDAQ:HBAN). For more information, visit
www.capstonepartners.com.
For More Information Contact:
Ian Cookson
Managing Director, Aerospace, Defense, Government & Security
Group
617-470-9330
icookson@capstonepartners.com
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SOURCE Capstone Partners