Aerospace & Defence (Private Sector)

We saw 3 deals for the Aerospace & Defence sector in Q1 2023. This reflects a small decrease from the previous quarter but is generally consistent with volumes we’ve seen throughout the last few years. Amongst the deals completed were:

• Spirol Holdings acquisition of family business Ford Aerospace
• Kamic Group’s acquisition of Avon Magnetics via it’s ETAL (UK) subsidiary

M&A activity in this sector has been relatively stable for several years, however recent geopolitical instability has driven government defence budget increases and heightened buyer interest in suppliers to the defence industry. On the aerospace side the lasting impact of COVID-19, as well as a technological and regulatory focus on carbon reduction has demanded executives confront disruption, consider diversification and push through a tough trading environment. Many companies have looked to the deals market to help with those strategic challenges.

Our sense of the sector from a restructuring perspective is that stress/distress has fallen slightly as at Q2 2023. We now rate the sector as moderate. Whilst our recent involvement in the collapse of Flybe highlighted the prevalence of some ongoing supply chain disruption there has been a clear increase in demand for commercial aircraft as passenger confidence returns following the pandemic slump in the industry.