Deal activity peaked in 2021, with Carlyle‘s $4 billion acquisition of Ireland’s aircraft leasing company AMCK being the largest deal announced that year. But deal value fell by more than half in 2022, and has been similarly slow in 2023.
Over the past five years, however, the largest deal was Advent‘s $5 billion take-private of UK-listed Cobham, which was followed by its purchase of sector peer Ultra Electronics by Advent-backed Cobham for $3.6 billion in a bolt-on deal. The deal was completed in 2022 after Ultra Electronic made concessions in response to security concerns raised by the UK government.
Typically, US deals make up the bulk of activity. But in 2021, Europe accounted for the larger share of deal value for deals announced, according to PitchBook data. Since 2018, the most active private equity investor in defense and aerospace has been US-based AE Industrial Partners, which completed 16 deals in total, according to PitchBook data.
According to a Deloitte survey, this year may see an increase in defense budgets, which are expected to outperform the commercial aerospace sector. European nations, in light of Russia’s ongoing war with Ukraine, pledged an increase in spending of $204 billion on future military technologies during the first three months of the invasion.
Similarly, the report stated the US defense budget for 2023 emphasizes perceived strategic threats from China and Russia, with a focus on electronic warfare and cybersecurity.
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