Mission control: Q1 2010

Global aerospace & defense industry M&A analysis: Q1 2010

This quarter, the Mission control report takes a deeper look at performing better M&A due diligence in a recovering economy and the ever increasing importance of considering how cultures will mesh and function financially, technologically, and operationally. The discussion includes emerging and existing areas that might call for more careful attention in today’s due diligence process, such as healthcare, climate change, changing tax laws, information technology, and human resources.

In the first quarter 2010, the global A&D sector experienced its strongest performance in the past five quarters with regards to total deal value, which was approximately 4.5 times that of the lows experienced in the first quarter of 2009. Average transaction value was approximately 3.5 times that of the lows experienced in the first quarter of 2009. On the flip side, there was a 10.5 percent sequential decrease in the total number of deals. However, it is worth noting that the 68 deals witnessed in the first quarter still falls comfortably in the range of historical norms.

As reported in our third quarter 2009 edition of Mission control, historically, M&A activity within the A&D sector has been strong in post-recessionary environments, and, while many unknowns exist, we believe there are numerous catalysts in place that support continued strength in the A&D mergers and acquisitions market.