Sector Outlook
A&D market performance
- The A&D industry has lagged in deal volume thus far in 2023 as compared to 2021 highs.
- At the same time public company performance has been strong in 2023 with market gains.
- The A&D industry has faced hurdles for the first half of 2023 including, supply chain, production lags, high borrowing costs, and the war for talent.
A&D market outlook
- The A&D market has the potential to pick up forward momentum during the latter half of 2023.
- The revenue outlook is expected to be strong for the rest of 2023 and into 2024 driven by disruption in the space industry, the conflict in Ukraine, and strong demand from customers in the aerospace market.
- Defense budgets continue to reach historic levels driving performance and interest in the industry.
M&A Interest
- PE firms continue to have dry powder with strong interest in investing capital. With recession fears receding and stabilizing inflation, PE firms are looking to invest capital regardless of continued high borrowing costs.
- Strategic investors have closed several notable investments thus far in 2023 and many will be looking to execute on acquisition plans as top performing assets enter the market.
Trends
- ESG pressure are expected to drive key innovative growth opportunities as companies race to net zero.
- The space sector has been growing at a rapid pace with significant investment that is expected to continue.
- Commercial aerospace has rebounded strongly from the Covid-19 pandemic as people return to airplane travel.
