Mission control: First-quarter 2015 aerospace and defense industry mergers and acquisitions analysis

May 2015
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Mission control: First-quarter 2015 aerospace and defense industry mergers and acquisitions analysis

At a glance

M&A activity in the aerospace and defense sector is off to a strong start in 2015 with deal value increasing on both a quarter-over-quarter and annual basis. The largest A&D deal since sequestration was recorded in Q1.

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Mission control is PwC's quarterly analysis of merger and acquisition (M&A) activity in the global aerospace & defense sector. It provides an overview of the most recent M&A results and our expectations for future deal activity.

Highlights of what this quarter's analysis revealed:

  • The largest transaction since 2011 occurred in the first quarter of 2015.
  • Divestitures and spin-offs remained popular in 1Q15, accounting for six of the nine deals in the quarter.
  • Increasing supply chain complexities and OEM pressure is spurring activity among mid- and lower- tier players across the supply chain.
  • Defense players continue to look for pockets of strategic growth areas particularly among intelligence, surveillance, and reconnaissance assets as well as electronic warfare.
  • Financial investors favor stability and niche capabilities.
  • Commercial MRO market is likely to see an increase in business and transaction activity.
  • A&D companies continue to announce plans to return capital to shareholders through buybacks, supported by strong cash flows.

Download the analysis to review all the key trends from 1Q15.

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