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2
Second Quarter 2015
35
33
32
30
31
44
43
40
36
35
36
43
0
10
20
30
40
50
60
70
80
90
100
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Defense & Government Services
Aerospace
M&A Analysis
Source: InfoBase; Capital IQ as of 3/31/15
Quarterly Transactions by Buyer Type
Recent Transaction Activity by Quarter
Aerospace
Defense & Gov. Services
78
73
68
65
67
87
The Mclean Group tracked 44 announced Defense and Government
Services sector transactions during Q2 2015. The public buyer
presence, which was evident over the past five quarters, diminished
slightly in Q2 as buyers digested recent purchases and shaped
portfolios. CSC announced that it will split into two companies
targeting global commercial markets and the US public sector.
Several other key companies announced divestures including
ManTech, Kratos and General Dynamics. Private equity companies
represented the most active buyer category, accounting for 40% of the
quarter’s acquisitions, the largest of which was Charterhouse Capital
Partners’ purchase of Mirion Technologies for $750 million. Other PE
backed activity included The Constellis Group’s purchase of The Olive
Group and Marlin Equity’s dual purchases of Fidelis Cybersecurity
(from General Dynamics) and Resolution1 Security. Lindsey Goldberg
announced an equity steak in ECS Federal which announced two
acquisitions in Q2. Meanwhile the PE group's other platform, PAE,
purchased A-T Solutions.
North American Aerospace M&A activity continued to increase during
Q2, reaching 43 announced transactions. Private buyers were the
most active acquirers in Q2 by volume representing approximately
37% of the buyer pool. Although decreasing as a percent of total
transactions, public buyers’ M&A activity remained steady, and was
led by several notable acquisitions of PE portfolio companies
including TransDigm’s purchase of Pexco from Odyssey Investment
Partners for $336 million and L-3’s purchase of CTC Aviation Group
from Inflection Point Partners. While some PE groups exited, many
more continued to build their aerospace portfolios. Carlyle Group
backed Landmark Aviation continued its acquisition streak purchasing
both ERA FBO and TWC Aviation in April, marking a total of six
acquisitions in the past year. Riverside Company’s H-D Advanced
Manufacturing Company also made two new purchases while Veritas
Capital acquired yet another aerospace platform, acquiring aircraft
MRO provider StandardAero from Dubai Aerospace. The expansion of
PE portfolios compliments firms’ understanding of future demands as
new generation aerospace technology is released.
14%
28%
47% 43%
19%
35%
20% 24%
13%
33% 38% 41%
51%
50%
33% 40%
43%
28%
51% 45%
47%
50%
49%
30%
35%
23% 19% 17%
38% 37%
29% 30%
41%
17% 14%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15Q2'15
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15
Finance Public Private