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2015 Year in Review
2015 ADG M&A Overview
Source: InfoBase; Capital IQ, Public Filings, TMG Proprietary Research as of 12/31/15
Quarterly Aerospace Transaction Activity
TMG recorded 33 announced Defense and Government Services
transactions and 36 announced Aerospace transactions during Q4
2015.
During 2015, TMG recorded 134 transactions in the Defense and
Government Services sectors, a modest increase from 2014. Public
company buyers accounted for 40% of transaction volume, down from
48% of all deals in 2014. Transactions involving a private equity firm
increased from 22% of all deals in 2014 to almost 35% of all deals in
2015. Additionally, private equity firms were active as both sellers and
buyers. For example private equity played dual roles in The Carlyle
Group’s acquisition of Novetta Solutions from Arlington Capital. Like
2014, mega-deals (transactions greater than $1.0 billion) were
prevalent throughout 2015, including Harris’ acquisition of Exelis, CSC’s
spin out and subsequent merger of its Government Solutions business
with SRA International, and the planned re-organization of Lockheed’s
IS & GS business unit, to name a few.
North American based aerospace acquisition activity was relatively flat
year-over-year with 156 announced transactions in 2014 and 161 in
2015. Growth was fueled by private buyer transactions which expanded
nearly 30%, and represented 32% of all transaction activity, up from
25% in 2014. Acquisitions by public companies fell by 12% while private
equity activity decreased by 6%. Reported aerospace multiples in 2015
remained steady with average EV/EBITDA and EV/Revenue multiples
of 10.5x and 2.0x, respectively. Of the transactions with reported
enterprise valuations, 26 were in excess of $100.0 million, and eight in
excess of $1.0 billion. Berkshire Hathaway’s acquisition of Precision
Castparts for $37.9 billion represented one of the largest deals of the
year. Landmark Aviation (The Carlyle Group) was the most active buyer
with four acquisitions, while Heico Corp., Meggitt PLC, and TransDigm
Group each made three acquisitions.
Defense and Government Services Transaction Activity
28
45
40
31
40
52
29
36
33
37
35
36
125
156
161
2013
2014
2015
Q1 Q2 Q3 Q4
28
35
31
29
33
43
32
32
27
35
30
33
124
130
134
2013
2014
2015
Q1 Q2 Q3 Q4