2
Third Quarter 2014
35
39
43
36
29
31
28
40
28
32
29
Q3
2014
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 33 announced Defense and Government
Services sector transactions during Q3 2014. This is up from Q2 2014 as
well as compared to Q3 2013. The trend of increased public buyer activity
has continued throughout Q3 with public companies representing the most
active buyer, accounting for 47% of acquisitions YTD. Private companies
have increased activity, accounting for 32% of the acquisitions and private
equity has receded, accounting for only 21% of acquisitions.
Notable large
transactions in Q3 2014 include AECOM’s $6 billion purchase of URS Corp
and the closing of Analogue Devices’ $2.0 billion purchase of Hittite that
was announced in Q2. Exelis continues its divestiture activity, announcing a
spin-off of part of its IT Services segment, formerly known as Exelis Mission
Systems, into an independent public company Vectrus. Lastly, it was
announced shortly after the Q3 close that Engility will acquire TASC in a
deal valued at $1.1 billion.
North American Aerospace M&A activity remained high in Q3 with 35 total
transactions announced. Transactions of note include TriMas’ acquisition
of Allfast and HD Advanced Manufacturing’s purchase of Sungear. The
MRO, Logistics & Fixed Base Operations (FBO) sector continued to see
the greatest amount of activity with 10 announced transactions in Q3 and
26 YTD. Among the most notable were XPO Logistics’ $615 million
purchase of New Breed Logistics and Exelis’ $17.5 million purchase of
Barco’s Orthogon Airport Operations Management Solutions Business.
Barco also divested its aerospace and defense display businesses to
Esterline for $189 million. Other notable divestitures include Rockwell
Collins’ sale of DataPath and EMCORE’s $150 million Space
Photovoltaics Business divestiture to Veritas Capital. The second highest
area of activity was Coatings & Chemicals with seven transactions led by
Trive Capital and its newly formed portfolio company Valence Surface
Technologies with four Q3 acquisitions. Overall PE-backed acquisitions
increased across the sector, comprising nearly 50% of Q3 transactions.
Defense and Government Services Transaction Activity
Source: InfoBase; Capital IQ as of 09/30/14
42
48
29
35
46
45
30
31
43
52
32
33
51
74
38
2011
2012
2013
2014 YTD
Q1 Q2 Q3 Q4
??
