Deal activity in the global aerospace and defense sector has been driven by an increased focus on emerging technologies, intensified competition, and rise in government spending to modernize the defense IT infrastructure.
A&D companies are focusing on acquisitions beyond portfolio reorganization and adding capabilities in high-growth emerging technologies, such as cybersecurity, cloud computing and C4ISR. Both strategic and financial investments continue to increase steadily in these technologies.
The Asia Pacific region remains a strong driver for commercial aerospace transactions due to fleet expansion and continued capital inflows to aircraft leasing. Consolidation continues among suppliers in fragmented segments, such as aero-structures, and repair and overhaul (MRO) providers.
Further, a higher focus to improve technology infrastructure is pushing a wider number of non-traditional and financial buyers to target more diversified IT service organizations.
These factors along with positive macro trends, such as a strong US economy and higher global defense spending, are expected to drive M&A activity for the rest of 2018 and 2019.
“…emerging technologies, intensified competition, and rises in government spending…. These factors along with positive macro trends, such as a strong US economy and higher global defense spending, are expected to drive M&A activity for the rest of 2018 and 2019.”