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First Quarter 2016
M&A Analysis
Source: Public Filings, InfoBase; Capital IQ as of 3/31/2016
Quarterly Transactions by Buyer Type
Recent Transaction Activity by Quarter
Aerospace
Defense & Gov. Services
The McLean Group tracked 33 announced Defense and Government Services sector transactions during Q1 2016, up from Q1 2015 and in line
with Q4 2015. Public buyer presence, which was evident throughout 2015, diminished slightly in Q1 2016 as buyers digested recent purchases
and shaped portfolios with continued divestitures. Lockheed Martin announced it will merge its realigned Information Systems & Global
Solutions business (“IS&GS”) with Leidos, forming the largest government services firm in the space with combined revenue in excess of $10
billion. CACI’s UK business unit, CACI Ltd., acquired two smaller private IT companies – one for its analytics qualifications and the other for its
cybersecurity subject matter expertise. Private equity companies represented the most active buyer category in the first quarter. Notable deals
include Platinum Equity’s acquisition of PAE from private equity firm Lindsay Goldberg, CM Equity’s portfolio company PSS’ add on of Tetra
Concepts, and Arlington Capital Partners’ purchase iRobot’s Defense & Security Business.
North American Aerospace M&A activity receded in Q1, falling to 32 announced transactions. Private equity buyers took advantage of this lull of
activity by filling the the void in Q1. KKR announced it will acquire Airbus’ Defense and Electronics business unit, which is comprised of airborne
platforms and ground systems, for $1.2 billion. The acquisition is expected to close in Q1 2017. Airbus continued to shed non-core assets and
divested its US satellite communications business to Satcom Direct. Enlightenment Capital made a strategic investment in Aurora Flight
Sciences, a manufacturer of unmanned systems and aerospace vehicles for military and commercial customers. Lastly, Berkshire Hathaway
completed its previously announced acquisition of Precision Castparts in January for $37.2 billion.
31
43
27
34
33
40
52
33
36
32
71
95
60
70
65
0
10
20
30
40
50
60
70
80
90
100
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Defense & Government Services
Aerospace
20%
35%
27% 31%
41%
45% 40% 37%
21%
39%
43%
31% 48% 42%
34%
58%
30% 37%
50%
30%
38% 35%
24% 28% 25%
16%
30% 26%
29%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Financial
Public Private