2
First Quarter 2014
42
48
29
35
46
45
30
?
43
52
32
51
74
38
2011
2012
2013
2014 YTD
Q1 Q2 Q3 Q4
43
36
29
31
28
40
28
32
29
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Q4
2012
Q3
2012
Q2
2012
Q1
2012
Quarterly Aerospace Transaction Activity
M&A Analysis
The McLean Group tracked 35 announced Defense and Government
Services sector transactions during Q1 2014. Transaction activity in the
sector rebounded considerably after a slow 2013. While Q1 historically has
been the quietest quarter based on transaction volume, Q1 2014 volume
exceeded every quarter of last year, with the exception of Q4. Perhaps the
most encouraging Q1 trend was increased activity by public buyers.
Publicly traded buyers accounted for 17 announced transactions, or 49% of
total volume. This is a substantial increase from Q1 2013, when publicly
traded companies made only seven acquisitions and from 2013 cumulative
volume, when public buyers accounted for 29% of all activity. Notable
publicly traded companies that announced transaction during Q1 2014
include ManTech, Ultra Electronics, Cubic, L-3, Lockheed Martin, and ICF
International. Meanwhile, financial buyers accounted for 20% of Q1
acquisitions compared to 42% of total 2013 transactions, indicating that
increased strategic activity may be hampering private equity deal flow.
Aerospace transactions took off in Q1 with 43 total transactions
announced. Precision Castparts continued its acquisition streak with three
announced transactions, which included a $625 million purchase of
Aerospace Dynamics International from The Marvin Group. Both Safran
and Thales grew their positions in the US. Safran purchased Eaton’s
Aerospace Power Distribution Management Solutions and Integrated
Cockpit Solutions Businesses for $270 million and Thales paid $400
million to acquire LiveTV, LLC from JetBlue Airways Corporation. Wesco
Aircraft acquired Haas Group, a primary provider of chemical supply chain
management solutions to aerospace customers, from the Jordan
Company for $550 million. Also of note was Lockheed Martin’s continued
expansion into the commercial sector with its purchase of Beontra AG and
TransDigm’s acquisition of yet another dynamic system provider, Elektro-
Metall Export. Overall, Q1 transaction activity was heavily dominated by
strategic buyers with private equity acquisitions representing only 14% of
Q1 announced transactions, down from 20% in 2013.
Defense and Government Services Transaction Activity
Source: InfoBase; Capital IQ as of 03/31/14
