2
Second Quarter 2014
42
48
29
35
46
45
30
31
43
52
32
51
74
38
2011
2012
2013
2014 YTD
Q1 Q2 Q3 Q4
38
43
36
29
31
28
40
28
32
29
Q2
2014
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 31 announced Defense and Government
Services sector transactions during Q2 2014. Transaction activity fell
slightly, declining to 2013 levels. However, increased public buyer activity
observed in Q1 continued with publicly-traded companies acting as the
buyers in 14 announced transactions, or 45% of total Q2 volume. The re-
appearance of mega mergers and consolidation amongst large industry
players has grabbed industry headlines following their near disappearance
in 2013. Notably large transactions in Q2 2014 include Cobham’s $1.5
billion purchase of Aeroflex and Analogue Devices’ $2.0 billion purchase of
Hittite. Additionally, its was announced shortly after the Q2 close that
AECOM will acquire competitor URS Corporation in a deal valued at $6.0
billion. These announcements follow on the heels of two additional billion
dollar acquisitions in Q1, RF Micro Devices’ $1.5 billion acquisition of
TriQuint and Global Digital Solutions’ $1.1 billion purchase of Freedom
Group, Inc.
North American Aerospace M&A activity remained high in Q2 with 38 total
transactions announced. The largest announced deal was a $5.0 billion
merger of Orbital Sciences Corp and ATK Aerospace & Defense (ATK
also announced the divestiture of its Sporting Group). Google advanced
into the market confirming its rumored purchase of UAV maker Titan
Aerospace in April and turned heads again in June with a $500.0 million
purchase of satellite company Skybox Imagining. Boeing and Lockheed
Martin both also made a pair of acquisitions. B/E Aerospace made dual
acquisitions and shortly thereafter announced that it will split into two
companies. GE Aerospace divested another asset, selling its Aviation,
Hydraulic Actuation Business to Triumph Group for $70.0 million. Private
equity activity increased in Q2, representing more than 20% of both
sellers and acquirers. Notable PE acquisitions and exits include Warburg
Pincus’ acquisition of Wencor Group from Odyssey Investment Partners,
Oak Hill Capital’s $2.8 billion sale of Firth Rixson to Alcoa, and Arlington
Capital-backed MB Aerospace’s purchase of Norbert Industries.
Defense and Government Services Transaction Activity
Source: InfoBase; Capital IQ as of 06/30/14
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