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David Jasmund

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Industry Trends

Boeing Nearing Agreement to Acquire Spirit AeroSystems Holdings

Boeing offered $35 per share to Spirit AeroSystems shareholders, the Kansas-based supplier spun out of Boeing in 2005. This offer represents a 22.4% premium over Spirit's stock price before takeover talks became public and values the company at ~$4.0 billion. Boeing aims to stabilize its supply chain for its 737 airplane with the acquisition. Airbus, one of Spirit’s largest customers, initially threatened to block the deal, however, the two aerospace juggernauts agreed to split Spirit's programs in a way that worked for both companies.1

Honeywell's $1.9 Billion Boost to Aerospace and Defense

Honeywell announced a $1.9 billion all-cash acquisition of CAES Systems to enhance its aerospace and defense capabilities. This move, aligned with CEO Vimal Kapur's focus on automation, aviation, and energy transition, marks Honeywell's third major deal this year. The acquisition, set to close in H2 2024, enhances Honeywell's aerospace and defense capabilities, supporting key programs like Lockheed Martin's F-35 and Boeing's EA-18G, while boosting earnings and adding 2,200 skilled employees.2

Increased Scrutiny Ahead for Defense Contractor M∓As

Current and prospective U.S. defense contractors are bracing for heightened regulatory scrutiny on mergers and acquisitions in the space. The National Defense Authorization Act prompted the Government Accountability Office (GAO) report highlighting the Department of Defense’s (DoD) limited oversight on defense-related M&A, motivating Congress to push for more stringent evaluations to protect national security. The DoD is expected to adopt comprehensive review processes, emphasizing transparency and risk assessment in future transactions.3

Boeing Faces Sanctions for Violating Investigative Rules

The NTSB has imposed rare sanctions on Boeing for "blatantly" breaching federal investigative regulations following a January 2024 incident. Alleged violations include disclosing confidential information and misrepresenting the purpose of investigations, jeopardizing a 2021 settlement aimed at avoiding criminal charges over past crashes. This development underscores renewed scrutiny of Boeing's safety practices amid ongoing investigations and calls for stricter penalties.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Kaman Corporation
  • Arcline Investment Management LP
  • $1,919.00
  • Turbine Controls, Inc.
  • VSE Corporation
  • $120.00
  • Allegient Defense, Inc.
  • BCS Allegient
  • $13.00
  • Llamas Plastics, Inc.
  • Lee Aerospace Inc.
  • n/a
  • Sunvair, Inc.
  • Greenbriar Equity Group, L.P.
  • n/a
  • M1 Support Services, L.P.
  • Cerberus Capital Management, L.P.
  • n/a
  • Aero Business of Workhorse Group Inc.
  • ATW Partners LLC
  • n/a
  • RCBS Pecisioneered Reloading
  • Hodgdon Powder Company, Inc.
  • n/a
  • GKN Aerospace North America, Inc.
  • The Boeing Company
  • n/a
  • Ahmic Aerospace LLC
  • Cubrc, Inc.
  • n/a

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • -
  • -
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Challenger Aerospace & Defense, Inc.
  • Resilient Energy Inc.
  • n/a
  • Aerovel Corporation
  • Airbus Helicopters, Inc.
  • n/a
  • Fenix Group, Inc.
  • Nokia Oyj
  • n/a

 

Source S&P Capital IQ as of 7/8/2024 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Eric Zaleski

Chicago Office

847-239-2466 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Reuters. “Boeing offers to buy Spirit Aero for $35/shr, Bloomberg News reports.” Reuters, June 25, 2024.
  2. 2. Agarwal, A. “Honeywell backs growth drive with $1.9 bln aerospace and defense deal.” Reuters, June 20, 2024.
  3. 3. Criag, L.; Et.al “Scrutiny of U.S. Defense Contractor-Related M&A Activities Will Soon Intensify.” Goodwin. May 14, 2024.
  4. 4. Knutson, J. “Boeing sanctioned by NTSB for "blatantly" violating investigative rules.” Axios, June 27, 2024.
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