GlobalData have found that the total defence sector merger and acquisition (M&A) deal value has gone up by 55% in the first quarter of 2024, to $8bn, compared with the same period in 2023.
According to the 'Thematic Intelligence: Aerospace, Defense and Security M&A Deals Q1 2024 - Top Themes' report by GlobalData, published on May 1 2024, supply chain disruption was identified as the leading motivator for M&A transactions. A prime example is the agreement by Ingersoll Rand, a global provider of essential flow creation and industrial solutions, to acquire ILC Dover from New Mountain Chapel, a key growth-oriented investment company, in a deal worth $2.3bn.
Following closely was the motivation to secure access to advanced materials, exemplified by a $1.8bn transaction in which private equity company Arcline Investment Management purchased aerospace defence contractor Kaman.
Following these two drivers was the defence industry push to involve itself with space systems, which drove $927m in deal value. Lockheed Martin took up $600m of this volume in Q1 2024, with the acquisition of Terran Orbital, a satellite solutions company billed to provide end-to-end solutions.
The final two drivers identified by GlobalData were for M&A deals motivated by soldier modernisation, namely the £175m acquisition by Bullseye Acquisitions of Sierra Bullets and Barnes Bullets, and the increase in interest in counter-drone technologies, with total deal volume worth $139m.
