Worldwide defense and aerospace companies completed mergers and acquisitions (M&A) deals worth more than $40 billion in 2006, reports “Defense Mergers & Acquisitions” in its year-end review. The year saw a total of 370 transactions completed. M&A activity in 2006 was exceptionally broad based.
The top five deals accounted for only 32% of the total value for the year. For comparison, in the record year of 1999 the top five deals accounted for 77% of the year’s $65 billion in deals.
According to Stuart McCutchan, editor of the DM&A newsletter, the deal activity reached a level not seen since 1999’s all-time high. Defense spending remains at historic highs, and the commercial aerospace marketplace is at full stride. Industry players are flush with cash, and private equity money is pouring into the marketplace. McCutchan expects 2007 to continue this trend. “we could see the 1999 record finally eclipsed. Deals worth $25 billion have already been announced or completed — by far the fastest start we’ve seen this decade.” Said McCutchan. A monthly newsletter and online service which has covered M&A activity in the defense, aerospace and government contracting markets since 1989.