2018年-普华永道中国_Globalaerospaceanddefensedealsinsights_Q12018_6页_1mb

PwC Deals Summary: Global Aerospace and Defense Deals Insights Q1 2018

Core Content

The Q1 2018 report highlights the continued strength of aerospace and defense (A&D) M&A activity, driven by geopolitical tensions, portfolio optimization, and the pursuit of scale in sub-sectors like government services. Despite macroeconomic uncertainties, such as trade disputes and tightening monetary policy, the sector remains well-positioned to capitalize on opportunities due to its strong financial standing and liquidity.

Main Points

• Deal Activity Overview

  • Total deal value in Q1 2018 was $15 billion, a 28% increase compared to Q1 2017 and 19% higher than the Q1 2018 historical average.
  • There were 86 deals in Q1 2018, a 19% decrease from Q1 2017, but the average deal size rose by 89% to $485 million, largely due to General Dynamics' acquisition of CSRA.
  • 73% of deal value and 99% of global deal value were transacted within North America.

• Largest Transaction

  • General Dynamics' acquisition of CSRA for $9.6 billion was the largest deal of Q1 2018.
  • This acquisition aims to enhance cost-effective IT solutions for the US government, including the Department of Defense and intelligence community.

• Megadeals

  • Only one megadeal (≥$5 billion) was announced in Q1 2018: General Dynamics' acquisition of CSRA.
  • Other notable deals include:
    • Shanghai Waigaoqiao Shipbuilding sold to CSSC Holdings for $960 million.
    • Elbit Systems acquired Israel Military Industries for $552 million.

• Sector Category Analysis

  • The Software and Security Systems category dominated deal value in the last two quarters.
  • Large acquisitions of IT firms, such as CSRA and Gemalto, indicate a focus on driving scale and synergies amid margin pressures.
  • There was lower activity in Aircraft & Parts and Arms & Vehicles categories.

• Investor Trends

  • Strategic investors accounted for 90% of deal value and 73% of deal volume in Q1 2018.
  • Financial investors had a smaller share, though opportunities for mega-deals still exist.

• Regional Analysis

  • North America remained the most active region for both acquirers and targets, with 73% of deal value and 73% of target value.
  • Asia and Oceania had the highest deal volume but fewer targets and acquirers compared to Q1 2017.

Outlook

PwC predicts that the trend of strong deal activity will continue in 2018, with the sector leveraging its solid cash position to pursue accretive transactions within core businesses. Most deals are expected to be mid to small in size and driven by strategic investors, although mega-deals remain possible. Industry players are advised to focus on opportunities that align with their strategic goals and to seek experienced advisors to navigate the complexities of M&A.

Key Takeaways

• The aerospace and defense sector remains a robust environment for M&A activity.
• Liquidity and strategic alignment are critical in navigating current uncertainties.
• Strategic investors dominate deal activity, with a focus on enhancing capabilities and portfolios.
• North America is the most active region in terms of deal value and target value.
• Opportunities for mega-deals still exist, particularly in IT and government services.
• PwC offers comprehensive M&A services tailored to the aerospace and defense industry, including due diligence, transaction structuring, and post-deal support.