PLANT

Aerospace M&A activity surges in Q1


May 20, 2010
by PLANT staff

TORONTO: The global aerospace and defence (A&D) sector is finding its wings post recession as mergers and acquisitions (M&A) activity shows a significant increase in the first quarter of the year, according to a PricewaterhouseCoopers (PWC) LLP report.

Mission Control: First-quarter 2010, a global aerospace and defence industry mergers and acquisitions analysis, shows the deal value for the sector is approximately 4.5 times the value of deals in the first quarter of 2009. Here are some highlights:

PWC cited an improving commercial aviation picture and reduced levels of defence spending as catalysts for M&A growth.

“This sector is trending towards more large and mid-size deals as many A&D companies came out of the recession with strong balance sheets,” said Mario Longpré, partner and national leader of PWC Canada’s aerospace and defence practice.

The Toronto-based consulting firm said the most notable change in the A&D mergers and acquisitions market early this year is the re-emergence of financial investors who have had minimal involvement in deal activity since the third quarter of 2008. In the first quarter of 2010, they accounted for 38% of total deals worth $50 million or more, compared to just 13% in 2008 and 12% in 2009.

North America (particularly the US) continues to represent a significant portion of deals measured by both number and value greater than $50 million. In the first quarter of 2010, North America represented 41% of deal value by target and accounted for 50% of the number of deals by target.