AEROSPACE & DEFENSE MARKET INSIGHTS
- Growing Defense Budget Provides Industry Tailwinds
- Defense M&A Remains Strong Driven by Investments in Technology
- Corporate Divestitures Offer Investors Attractive Acquisition Assets and Sellers with Liquidity
- Increasing Use of Advanced Manufacturing Technologies Across the Defense Supply Chain
- Strong SPAC Interest in Innovative Technologies Surrounding the A&D Industry
The defense market has proven resilient and weathered the disruptions caused by the COVID-19 pandemic, largely driven by the U.S. government’s continued execution and funding of military programs.
Transactions in the Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (“C4ISR”) are expected to increase as firms seek further access into the enabling technology markets in military air, land, sea and space platforms following the Department of Defense’s first enterprise data strategy.
Following the consolidation experienced in the defense industry in recent years, 2021 has seen several major strategic players divest business divisions in order to reshape their portfolios and focus on their respective core business strategies. These divested assets have created attractive assets for both private equity platform investments and strategics’ portfolio expansion.
The defense industry is well positioned to benefit from advancements in additive manufacturing and advanced materials as participants continue to seek light-weight, stronger materials. Additive manufacturing and advanced materials has been an active space for start-ups and early-stage companies seeking to disrupt the manufacturing supply chain with new technology.
Sectors operating tangential to defense, providing innovative technologies with defense applications have drawn strong interest from Special Purpose Acquisition Companies (“SPACs”) including the space, satellites, and additive manufacturing sectors over the past several months.