Amid COVID-19 concerns in March, there has been a growing uncertainty pervading the Aerospace & Defense (“A&D”) industry. Concerns of decreased defense funding, job reductions/layoffs, and industry slow-downs brought anxiety to many. However, in retrospect, the A&D industry has actually seen a positive trend in defense spending and increased profit sustainability amongst hundreds of companies. A&D Manufacturing was one of the only industries during the COVID-19 quarantine to be labeled as an “essential industry,” and day-to-day processes never ceased or slowed down even when the pandemic was at it’s most strict. Instead, there was a consistent increase and growth in profit and jobs with the A&D sector, now accounting for more than 10% of all manufacturing jobs in the United States. Additionally, A&D Manufacturing remains in the top 5 most attractive industries to invest in, receiving the 3rd highest market valuations according to Mergers & Acquisitions (“M&A”) statistics.
With President Trump’s recent ordering of more F-35 fighter jets last week, and an increase in demand of F-35s from US Allies (South Korea, Japan, and Israel), there seem to be no signs of slowing down. Instead, there are signs of ramping up more production and more investment into the American Defense Manufacturing industry. Despite being an election year and a pivotal turning point in the American economy, Boeing CEO Dave Calhoun predicts that defense spending will continue to rise regardless of which political candidate assumes presidency in 2021. In fact, by 2025, experts and economists predict that American Defense Manufacturing could reach an all-time high and surpass the record-breaking spending numbers of the Cold War Era. Explaining the recent influx in M&A activity within the A&D Manufacturing industry over the last 5-10 years as profitability edges towards all-time highs.
Meritage Partners is a multi-disciplined mergers and acquisitions advisory firm serving the lower-middle markets. Meritage has seen a recent increase in investor interest in the A&D Manufacturing industry, with over 20 current contacts seeking acquisitions within the industry.
Should you have any questions or an interest in learning more about Meritage Partners, please contact Jacob Franco (Director of Business Development) at firstname.lastname@example.org or 949-464-8722.