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Exit and Growth Strategies for Middle Market Businesses

Archive for the ‘Aviation/Aerospace’ Category

M&A Quarterly News In The Aviation, Aerospace and Defense Industry Sector

By Daniel Sirvent | Jun 17, 2019

The report below gives a good overview of the second quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector. In Q1 2019 the value of global mergers and acquisitions in the Aerospace and Defense sector was $11.0B and the number of M&A deals was 87 (source: Pitchbook).

In a notable deal, Kellstrom Defense, Inc. acquired Williams Aerospace & Manufacturing, Inc., a Spring Valley, CA military aircraft replacement parts manufacturer, for an undisclosed amount in January. The deal was financed with debt from PNC Mezzanine Capital, Barings, and Blue Torch Capital. Chris Celtruda, CEO of Kellstrom Defense, stated the acquisition supports their growth strategy to rapidly integrate the Williams Aerospace & Manufacturing business, while also investing in products and solutions set for military aircraft sustainment.

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M&A Quarterly News In The Aviation, Aerospace and Defense Industry Sector

By Daniel Sirvent | Dec 19, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector. M&A activity for North American target companies in the Aerospace and Defense sector Q3 2018 included 11 closed deals, according to Factset Research.

One of the notable middle market transactions was announced in September when Boeing acquired Millennium Space Systems, Inc. for an undisclosed amount. Following the transaction, Millennium Space Systems Inc will be rebranded as Millennium Space Systems, A Boeing Company. The acquisition expands Boeing’s satellite and space portfolio, talent and capabilities. Founded in 2001, Millennium Space Systems is located in El Segundo, CA and develops high-performance spacecraft parts. It has approximately 260 employees .

Industry Update
  • US corporate profits, which affect airline traffic and demand for new commercial aircraft, rose 7.7% in the second quarter of 2018 compared to the same period in 2017.
  • US steel mill product prices, an indicator of commodity steel costs for aerospace products, rose 18.1% in September 2018 compared to the same month in 2017.

Posted by Daniel Sirvent.

Read the Entire Aviation, Aerospace & Defense M&A 4th Quarter Newsletter Here


M&A Quartely News In The Aviation, Aerospace and Defense Industry Sector

By Daniel Sirvent | Sep 20, 2018

The report below gives a good overview of the third quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector. M&A activity for North American based target companies in the Aerospace and Defense sector for Q2 2018 included 11 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in May when Valiant Integrated Services, LLC acquired Cubic Global Defense, Inc. and Omega Training Group, Inc. from Cubic Corp for $138 Million in cash and contingent payout. Under the terms of transaction, Valiant Integrated Services paid $135 Million in cash and will make additional earnout payments of $3 Million based on certain performance conditions related to the award of certain government contracts over the next 12 to 24 months. The transaction allows Valiant Integrated Services to further expand its business operations. Cubic Global Defense engages in the manufacturing of tactical training and simulation systems while Omega Training Group provides training, testing, analysis, logistics and staffing services for the military industry.
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M&A News In The Aviation, Aerospace and Defense Industry Sector

By Daniel Sirvent | Jun 11, 2018

The report below gives a good overview of the second quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector.  M&A activity for North American based target companies in the Aerospace and Defense sector for Q1 2018 included 17 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in March when a private group led by Hanover Partners, Inc., Greyrock Capital Group LLC, Northstar Capital LLC, and the management of Blast Deflectors, Inc. acquired Blast Deflectors, Inc for. an undisclosed amount. Founded in 1957, Blast Deflectors is located and Reno, Nevada, and manufactures jet blast deflectors, ground run-up enclosures, and end-around taxiway screens. Following the transaction, Christopher Lynn, retiring CEO and Blast Deflectors Inc’s prior owner, will remain a board member.

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M&A News In The Aviation, Aerospace and Defense Industry Sector

By Joe Contaldo | Apr 05, 2018

The report below gives a good overview of the first quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector. M&A activity for North American based target companies in the Aerospace and Defense sector for Q4 2017 included 15 closed deals, according to data published by industry data tracker FactSet.

Boeing gave a strong forecast for 2018 and expects to deliver 810 to 815 commercial aircraft this year. That’s an increase of at least 47 from 2017, when it set a company record of 763. In the quarter ended Dec. 31, Boeing’s net income nearly doubled to $3.13 billion, or $5.18 per share, from $1.63 billion, or $2.59 per share, a year ago. Fourth-quarter revenue grew to $25.37 billion in 2017, a 9 percent increase from the same period the year prior.

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M&A News In The Aviation, Aerospace and Defense Industry Sector

By Joe Contaldo | Dec 13, 2017

The report below gives a good overview of the fourth quarter M&A activity in the Aviation, Aerospace and Defense Industry Sector. M&A activity for North American based target companies in the Retail and Consumer sector for Q3 2017 included 18 closed deals, according to data published by industry data tracker FactSet.
Private equity has been active in defense of late as evidenced by Odyssey Investment Partners LLC acquiring CPI International LLC, a portfolio company of Veritas Capital Fund Management LLC, for a reported value of US$800 million. The acquisition enhances the growth strategies of CPI International. CPI International manufactures and designs satellite communications. Its defense applications include radar, electronic warfare and communications end markets.
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M&A News From the Aviation, Aerospace & Defense Industry

By Joe Contaldo | Nov 18, 2016

Aviation, Aerospace & Defense IndustryWorldwide shipments of general aviation airplanes, a key demand driver for manufacturers of aerospace products and parts, fell 4.5% in the first half of 2016 compared to the same period in 2015, according to the General Aviation Manufacturers Association (GAMA). Among airplane types, turboprops saw the biggest decline in shipments, with a drop of 4.9%, followed by piston planes (off 4.5%), and business jets (down 4.3%). Global rotorcraft shipments declined by 16.1%, led by an 18.3% reduction in turbine helicopter shipments. Piston helicopter shipments decreased by 10.1%. Demand for general aviation aircraft has been dampened by sluggish global economic growth, according to GAMA. The association has also criticized Congress for not moving to streamline the general aviation product certification process as part of the FAA Extension bill in July 2016. GAMA argues that a reformed regulatory environment would bring safer, more innovative products to market faster and reduce manufacturer costs.

  • US durable goods manufacturers’ shipments of military aircraft and parts, an indicator of demand for aerospace products and parts for military use, fell 11.6% year-to-date in August 2016 compared to the same period in 2015.
  • US durable goods manufacturers’ shipments of nondefense aircraft and parts, an indicator of demand for aerospace products and parts, fell 3.9% year-to-date in August 2016 compared to the same period in 2015.
  • US steel mill product prices, an indicator of commodity steel costs for aerospace products, rose 1.1% in September 2016 compared to the same month in 2015.

Posted by Joe Contaldo.

Read the Entire Aviation, Aerospace & Defense M&A 4th Quarter Newsletter Here


M&A News – Aviation, Aerospace and Defense Industry

By Joe Contaldo | Jul 14, 2016

Aviation, Aerospace and Defense IndustryIllustrating increased competition in a key market segment in the aviation, aerospace and defense industry, Boeing, in March 2016, struck a deal for United Airlines to order 25 737-700 single-aisle jets, beating out smaller rivals Bombardier and Embraer. The agreement followed a similar deal in January, when United agreed to buy 40 737-700s. The airline is working to replace its aging fleet of smaller, 50-seat aircraft. The competition for the United orders was fierce as Bombardier hoped a win would help boost demand for its CSeries narrow-body jets, the company’s first product that aims to compete directly with Boeing. Executives at other airlines were said to watch the United decision closely, and are expected to weigh the outcome when considering the Bombardier CSeries as a potential part of their own narrow-body strategies, according to The Wall Street Journal. Single-aisle jets are expected to account for more than 70% of global new aircraft deliveries through 2034, according to a recent Airbus market report. 

Global shipments of general aviation aircraft fell more than 6% in the first nine months of 2015 compared to the same period in 2014, according to the General Aviation Manufacturers Association (GAMA). Industry watchers suggest demand for US-made general aviation aircraft may have been harmed when Congressional authorization for the US Export-Import Bank lapsed in July 2015. The Export-Import bank provides financing to US export manufacturers who are unable to secure financing in the private sector. The Export-Import Bank was reauthorized in December 2015. Worldwide shipments of business jets were a bright spot, which increased more than 4%. However, shipments of piston aircraft in the first nine months of 2015 dropped nearly 11% and turboprop aircraft deliveries were off more than 9%. Overall, rotorcraft shipments were down nearly 6%; a 1% rise in piston rotorcraft shipments was more than offset by an 8% fall in turbine rotorcraft deliveries.

Posted by Joe Contaldo.

Read the Entire Aviation, Aerospace & Defense M&A 2nd Quarter Newsletter Here


BREXIT on Display at the Farnborough International Airshow

By Daniel Sirvent | Jun 30, 2016

Commercial Aerospace “Supercycle”?Front Row Seats for the End of the Commercial Aerospace “Supercycle”?

It goes without saying that Britain’s vote to exit the European Union, or the now familiar BREXIT, has had the media buying ink by the containership as opposed to the proverbial barrel.  Wall Street analysts, corporate forecasters and a fresh wave of armchair economists are all weighing in on what BREXIT will mean for global trade, U.S. interest rates and their retirement portfolios.

The Economics of Commercial Aircraft Orders

While it may appear overly simplistic the principle remains fundamental; a stronger dollar drives dollar-denominated commodity prices lower. The aerospace industry is aware not only of the sharp contraction in crude oil prices since the Thanksgiving Massacre in 2014 (who could miss the relentless media attention), but also of the nearly silent decline in jet fuel prices which has gone virtually unnoticed in the headlines.  As those lower prices have eased a major cost pressure, operators have drawn back the throttle and next generation aircraft and engine acquisitions driving slowdown in new order velocities. Read more »


Aviation, Aerospace and Defense M&A Industry News

By Joe Contaldo | Feb 25, 2016

Aviation, Aerospace and Defense M&AGlobal shipments of general aviation aircraft fell more than 6% in the first nine months of 2015 compared to the same period in 2014, according to the General Aviation Manufacturers Association (GAMA). Industry watchers suggest demand for US-made general aviation aircraft may have been harmed when Congressional authorization for the US Export-Import Bank lapsed in July 2015. The Export-Import bank provides financing to US export manufacturers who are unable to secure financing in the private sector. The Export-Import Bank was reauthorized in December 2015. Worldwide shipments of business jets were a bright spot, which increased more than 4%. However, shipments of piston aircraft in the first nine months of 2015 dropped nearly 11% and turboprop aircraft deliveries were off more than 9%. Overall, rotorcraft shipments were down nearly 6%; a 1% rise in piston rotorcraft shipments was more than offset by an 8% fall in turbine rotorcraft deliveries.

Boeing Forecasts Fewer 2016 Commercial Aircraft Deliveries – Potentially indicating reduced demand for aircraft engine and parts manufacturers, industry leader Boeing expects lower earnings and aircraft deliveries in 2016 compared to 2015 levels, according to the company’s fourth-quarter 2015 earnings report released in late January 2016. The company said it would deliver between 740 and 745 planes in 2016, compared to the 762 delivered in 2015. Days before Boeing’s earnings announcement, the company said it would cut 2016 747-8 production in half amid lower-than-expected demand for new cargo-hauling aircraft.  Aviation industry  watchers note that a slowing global economy has reduced demand for freight aircraft and more cargo has shifted to being shipped by sea. November 2015 air cargo traffic was down 1.2% compared to a year earlier, according to the International Air Transport Association. In contrast, November 2015 passenger traffic increased nearly 6%.

  • US durable goods manufacturers’ shipments of military aircraft and parts, an indicator of demand for aerospace products and parts for military use, rose 3.1% year-to-date in November 2015 compared to the same period in 2014.
  • US durable goods manufacturers’ shipments of nondefense aircraft and parts, an indicator of demand for aerospace products and parts, rose 14.2% year-to-date in November 2015 compared to the same period in 2014.
  • US steel mill product prices, an indicator of commodity steel costs for aerospace products, fell 19.8% in December 2015 compared to the same month in 2014.

Posted by Joe Contaldo.

Read the Entire Aviation, Aerospace & Defense M&A 1st Quarter Newsletter Here