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As of 09/30/2016




Notable Acquisitions and Consolidations

Industry Trends (Aerospace)

In the last three months, there have been eleven completed transactions in

the Aircraft Components sector, ranging from manufacturers of specialized

machined parts for gas turbines to producers of precision injection molded

parts. These acquisitions were fueled by the strong demand from OEM’s

for specialized and proprietary manufactured components needed to

complete the record number of orders for new aircraft. Additionally, the

recent slump in raw materials prices has helped to increase the margins of

these firms making them highly sought after acquisitions for companies

looking to vertically integrate in the market. However, as demand for new

commercial aircraft from lessors begins to slow, the market for component

manufacturers could be facing significant headwinds.

Over the last year, new large commercial aircraft supply appears to be

outpacing demand as evidenced by a meaningful number of new and used

leased aircraft available in the marketplace. In recent years, lessors have

typically purchased an average of 500 aircraft annually. Through the third

quarter of 2016, orders from lessors have decreased to less than 100

aircraft. In addition to declining orders, lessors are retiring fewer aircraft as

airlines are beginning to demand older aircraft given that fuel economy is

less of a concern in the current market environment.

Excess supply of lessor aircraft combined with declining new aircraft orders

could begin to place downward pricing pressure on OEMs which in turn

could result in a squeeze on the rest of the supply chain. If this scenario

plays out the business models of aircraft component manufacturers could

seem less attractive to potential buyers.



Coatings Business

Newport News

Portfolio Company of Blackstone


Source: Public Filings, Industry Newswires