com
Q3 2014
Page 1 of 5
http://www.pwc.com/us/en/industrial-products/aerospace-defense
As of September 30, 2014
USD in millions, unless otherwise noted
Industrial Products Industry - Aerospace and Defense Valuation Quarterly Update (Q3 2014)
Recent Market Trends & Developments
19.3%
20.0%
17.3%
15.0%
10.0%
5.0%
0.0%
0.6%
0.4%
S&P 500 A&D Index
Quarter-over-quarter
Year-overyear
change
0.4%
11 of the top 25 constituents of the Aerospace/Defense industry, based on market capitalization, saw increases in market capitalization during the third quarter of 2014.
19 of the top 25 constituents of the Aerospace/Defense industry saw increases in market capitalizations for the year ended September 30, 2014.
Xi'an Aero-Engine PLC experienced the largest increase in market capitalization over the last quarter with increases of 109.0 percent.
Xi'an Aero-Engine PLC also experienced the largest increase in market capitalization over the last year with an increase of 224.4 percent.
Overall, the top constituents of the Aerospace/Defense industry experienced average and median increases in market capitalization over the last year of
21.2 and 11.8 percent, respectively.
The three largest transactions involving public acquirers that closed during the second quarter of 2014 included
AECOM Technology Corporation's acquisition of URS Corporation, Alliant Techsystems Inc.'s acquisition of Orbital Sciences Corp., and
Babcock International Group plc's acquisition of Avincis Mission Critical Services Holdings, S.L.U.
Recent Developments:
According to PwC's Aerospace and Defense August 2014 M&A review, divestitures and spin-offs remain popular, with the volume of these types of deals on pace to hit a
The third quarter was a weaker quarter for deal volume and value relative to recent years within the Aerospace and Defense Industry, however thanks to more robust
M&A activity during the first half of the year, 2014 is still on pace to exceed 2013.
The government budget for 2013 helped to clarify the future of government spending in the sector and set overall defense demand in the market. This has led to higher
competition for major weapons programs which has been providing additional M&A catalysts to the market and should continue to fuel opportunities.
Unmanned Aerial vehicles ("UAV") have seen increased funding from both the military and commercial markets, as such growth could attract more interest in
acquisitions of small UAV companies.
Matching the overall sector trend, aerospace deal announcements were weaker in the third quarter, however aerospace targets still represent the largest segment
of the market and should continue to lead as higher commercial aircraft production rates make vertical integration of supply chains an attractive return.
M&A valuations remain robust across the sector, however some executives have specifically cited valuations as a source of concern when considering whether
their companies can create value from potential acquisitions.
Citations
http://www.pwc.com/en_US/us/industrial-products/publications/assets/pwc-aerospace-defense-industry-mergers-acquisitions-q3-2014.pdf
Page 2 of 5
http://www.pwc.com/us/en/industrial-products/aerospace-defense
As of September 30, 2014
USD in millions, unless otherwise noted
Market Capitalization
9/30/2013
6/30/2014
9/30/2014
Price/Earnings (LTM)
9/30/2013
6/30/2014
9/30/2014
98,925.8
88,647.2
65,173.4
40,705.9
49,813.7
30,620.4
33,071.4
24,854.4
33,851.7
21,925.5
25,661.6
23,712.5
12,334.4
11,096.0
9,161.7
8,465.8
7,744.7
7,287.3
2,908.5
10,317.4
7,735.6
8,613.6
5,006.2
5,922.2
7,028.8
105,836.6
92,779.2
72,791.0
50,722.7
52,480.4
39,960.4
36,538.2
28,861.1
34,392.4
25,617.0
27,260.6
23,394.7
15,332.0
12,357.6
10,587.9
10,412.5
10,688.2
8,852.2
4,515.3
9,504.4
9,734.8
9,279.9
6,413.2
6,678.2
6,971.9
96,603.9
91,791.7
72,870.5
57,683.2
49,307.1
42,488.2
33,986.1
31,575.3
29,429.9
27,398.0
26,996.8
24,131.4
12,907.4
10,912.3
10,605.3
10,254.7
10,048.4
9,678.4
9,434.9
8,931.0
8,839.1
8,740.2
7,668.8
7,194.6
5,897.9
21.6x
23.5x
25.8x
15.5x
29.2x
16.6x
23.8x
14.6x
42.2x
12.8x
16.6x
19.6x
22.4x
16.1x
16.8x
12.2x
17.3x
24.0x
NMF
29.3x
25.2x
22.7x
NMF
21.0x
23.8x
21.0x
24.5x
22.8x
17.3x
26.9x
17.9x
22.9x
16.7x
22.1x
14.8x
18.4x
17.5x
27.0x
15.4x
19.4x
15.8x
24.8x
27.9x
NMF
26.8x
27.4x
19.8x
NMF
15.6x
21.2x
19.4x
24.0x
22.1x
19.1x
28.3x
19.6x
20.6x
18.2x
10.9x
15.7x
15.3x
18.8x
21.7x
14.1x
19.5x
16.1x
22.0x
29.3x
NMF
26.4x
23.3x
20.3x
NMF
14.7x
19.9x
1.9x
1.0x
1.8x
0.9x
0.6x
1.0x
4.1x
1.1x
1.5x
0.9x
1.4x
0.9x
2.2x
0.5x
2.2x
0.9x
0.9x
6.2x
2.6x
2.0x
2.8x
2.0x
6.6x
1.2x
3.1x
2.0x
1.0x
1.9x
1.2x
0.6x
1.3x
4.1x
1.3x
1.2x
1.1x
1.5x
0.9x
2.3x
0.6x
2.7x
1.1x
1.2x
6.6x
3.6x
1.7x
3.1x
1.9x
7.0x
1.1x
2.8x
1.8x
1.0x
1.8x
1.3x
0.6x
1.4x
3.8x
1.4x
1.2x
1.2x
1.6x
1.0x
2.3x
0.6x
2.6x
1.1x
1.1x
7.3x
7.5x
1.6x
2.9x
2.0x
8.2x
1.1x
2.7x
11.0x
10.5x
12.6x
8.0x
7.8x
8.3x
14.3x
7.8x
12.3x
6.4x
10.3x
7.9x
13.6x
6.2x
9.2x
7.6x
8.5x
14.0x
26.9x
15.1x
13.2x
13.1x
37.4x
11.8x
11.7x
10.8x
10.9x
11.3x
9.0x
8.0x
9.2x
13.4x
8.6x
9.6x
7.5x
10.5x
7.2x
16.4x
5.7x
11.7x
9.3x
12.0x
15.1x
38.8x
13.1x
14.5x
11.7x
40.5x
7.7x
10.9x
10.0x
10.8x
10.9x
9.9x
8.2x
10.0x
12.2x
9.5x
10.6x
8.0x
11.9x
8.3x
15.6x
6.1x
11.4x
9.5x
10.7x
16.4x
NMF
13.1x
13.5x
11.9x
47.5x
8.1x
10.5x
Average
Median
25,623.4
12,334.4
28,478.5
15,332.0
28,215.0
12,907.4
21.4x
21.6x
21.0x
21.0x
20.0x
19.6x
2.0x
1.5x
2.1x
1.5x
2.4x
1.6x
12.2x
11.0x
12.9x
10.9x
12.3x
10.6x
Notes:
(1) Market data provided by Capital IQ, Inc. Selected companies represent the largest global companies in the chemicals industry based on market capitalization.
Page 3 of 5
http://www.pwc.com/us/en/industrial-products/aerospace-defense
As of September 30, 2014
USD in millions, unless otherwise noted
Market Capitalization
9/30/2013
6/30/2014
9/30/2014
Price/Earnings (LTM)
9/30/2013
6/30/2014
9/30/2014
98,925.8
88,647.2
65,173.4
40,705.9
30,620.4
33,071.4
24,854.4
21,925.5
9,161.7
8,465.8
105,836.6
92,779.2
72,791.0
50,722.7
39,960.4
36,538.2
28,861.1
25,617.0
10,587.9
10,412.5
96,603.9
91,791.7
72,870.5
57,683.2
42,488.2
33,986.1
31,575.3
27,398.0
10,605.3
10,254.7
21.6x
23.5x
25.8x
15.5x
16.6x
23.8x
14.6x
12.8x
16.8x
12.2x
21.0x
24.5x
22.8x
17.3x
17.9x
22.9x
16.7x
14.8x
19.4x
15.8x
19.4x
24.0x
22.1x
19.1x
19.6x
20.6x
18.2x
15.7x
19.5x
16.1x
1.9x
1.0x
1.8x
0.9x
1.0x
4.1x
1.1x
0.9x
2.2x
0.9x
2.0x
1.0x
1.9x
1.2x
1.3x
4.1x
1.3x
1.1x
2.7x
1.1x
1.8x
1.0x
1.8x
1.3x
1.4x
3.8x
1.4x
1.2x
2.6x
1.1x
11.0x
10.5x
12.6x
8.0x
8.3x
14.3x
7.8x
6.4x
9.2x
7.6x
10.8x
10.9x
11.3x
9.0x
9.2x
13.4x
8.6x
7.5x
11.7x
9.3x
10.0x
10.8x
10.9x
9.9x
10.0x
12.2x
9.5x
8.0x
11.4x
9.5x
Average
Median
42,155.1
31,845.9
47,410.7
38,249.3
47,525.7
38,237.2
18.3x
16.7x
19.3x
18.7x
19.4x
19.4x
1.6x
1.0x
1.8x
1.3x
1.8x
1.4x
9.6x
8.8x
10.2x
10.0x
10.2x
10.0x
Market Capitalization
9/30/2013
6/30/2014
9/30/2014
Price/Earnings (LTM)
9/30/2013
6/30/2014
9/30/2014
49,813.7
33,851.7
25,661.6
23,712.5
12,334.4
11,096.0
8,613.6
7,028.8
3,460.0
4,962.4
52,480.4
34,392.4
27,260.6
23,394.7
15,332.0
12,357.6
9,279.9
6,971.9
5,496.7
6,029.9
49,307.1
29,429.9
26,996.8
24,131.4
12,907.4
10,912.3
8,740.2
5,897.9
5,621.8
5,330.6
29.2x
42.2x
16.6x
19.6x
22.4x
16.1x
22.7x
23.8x
16.4x
23.1x
26.9x
22.1x
18.4x
17.5x
27.0x
15.4x
19.8x
21.2x
NM
22.8x
28.3x
10.9x
15.3x
18.8x
21.7x
14.1x
20.3x
19.9x
NM
22.2x
0.6x
1.5x
1.4x
0.9x
2.2x
0.5x
2.0x
3.1x
0.5x
2.0x
0.6x
1.2x
1.5x
0.9x
2.3x
0.6x
1.9x
2.8x
0.6x
2.2x
0.6x
1.2x
1.6x
1.0x
2.3x
0.6x
2.0x
2.7x
0.6x
2.0x
7.8x
12.3x
10.3x
7.9x
13.6x
6.2x
13.1x
11.7x
5.9x
9.3x
8.0x
9.6x
10.5x
7.2x
16.4x
5.7x
11.7x
10.9x
11.2x
9.1x
8.2x
10.6x
11.9x
8.3x
15.6x
6.1x
11.9x
10.5x
11.6x
8.2x
18,053.5
11,715.2
19,299.6
13,844.8
17,927.5
11,909.8
23.2x
22.6x
21.2x
21.2x
19.1x
19.9x
1.5x
1.5x
1.5x
1.3x
1.5x
1.4x
9.8x
9.8x
10.0x
10.0x
10.3x
10.5x
Market Capitalization
9/30/2013
6/30/2014
9/30/2014
Price/Earnings (LTM)
9/30/2013
6/30/2014
9/30/2014
2,908.5
10,317.4
5,006.2
2,756.6
2,795.4
2,428.9
1,418.6
2,000.7
1,970.5
1,356.9
4,515.3
9,504.4
6,413.2
3,514.1
3,093.8
3,006.1
2,638.1
2,277.1
1,970.8
1,969.2
9,434.9
8,931.0
7,668.8
4,621.3
3,912.7
3,754.3
3,380.2
3,204.5
3,163.6
2,652.0
81.0x
29.3x
84.4x
83.3x
70.7x
76.6x
90.6x
75.6x
164.2x
49.3x
108.1x
26.8x
92.8x
150.2x
102.2x
43.6x
78.5x
97.1x
206.4x
74.8x
159.5x
26.4x
114.7x
195.7x
191.6x
51.5x
99.3x
137.5x
NM
108.4x
2.6x
2.0x
6.6x
3.4x
1.2x
1.7x
2.7x
5.5x
4.3x
2.4x
3.6x
1.7x
7.0x
3.9x
1.2x
1.5x
1.2x
5.4x
4.0x
3.2x
7.5x
1.6x
8.2x
5.2x
1.5x
1.8x
1.6x
7.2x
6.4x
4.3x
26.9x
15.1x
37.4x
44.9x
11.9x
N/A
49.2x
31.5x
73.5x
20.8x
38.8x
13.1x
40.5x
59.8x
11.4x
N/A
26.6x
35.2x
111.9x
29.8x
75.2x
13.1x
47.5x
78.1x
14.6x
15.8x
33.4x
48.6x
170.9x
37.9x
Average
Median
3,296.0
2,592.8
3,890.2
3,049.9
5,072.3
3,833.5
80.5x
78.8x
98.1x
94.9x
120.5x
114.7x
3.2x
2.7x
3.3x
3.4x
4.5x
4.8x
34.6x
31.5x
40.8x
35.2x
53.5x
42.7x
Notes:
(1) Market data provided by Capital IQ, Inc. Selected companies represent the largest companies in the chemicals industry in each region based on market capitalization.
Page 4 of 5
http://www.pwc.com/us/en/industrial-products/aerospace-defense
As of September 30, 2014
USD in millions, unless otherwise noted
Target
Doha Industry Co., Ltd.
Colt International, Inc.
URS Corporation
Aeroflex Holding Corp.
Orbital Sciences Corp.
ThyssenKrupp Marine Systems AB
Zygo Corporation
Avincis Mission Critical Services
Remington Outdoor Company, Inc.
UPECA Technologies Sdn Bhd.
Elektro-Metall Export GmbH
TriQuint Semiconductor, Inc.
Astronics Test Systems Inc.
Eaton Corporation plc, Aerospace Power
Airborne Systems Inc.
PGA Electronic S.A.
Mac Fasteners, Inc.
TIMCO Aviation Services, Inc.
Symmetricom Inc.
Six3 Systems Inc.
Target
Country
South Korea
United States
United States
United States
United States
Sweden
United States
Spain
United States
Malaysia
Germany
United States
United States
United States
United States
France
United States
United States
United States
United States
Announce
Date
7/18/2014
7/14/2014
7/13/2014
5/20/2014
4/29/2014
4/14/2014
4/11/2014
3/27/2014
3/11/2014
3/10/2014
3/6/2014
2/24/2014
1/21/2014
1/20/2014
12/2/2013
11/4/2013
10/28/2013
10/23/2013
10/21/2013
10/9/2013
Total
transaction
value
62.5
63.0
5,861.1
1,507.2
3,978.7
51.9
385.9
2,700.0
1,689.2
126.4
47.4
1,593.6
53.0
270.0
250.0
37.4
40.0
392.8
323.1
1,052.7
Close Date
7/31/14
7/30/14
10/17/14
9/12/14
Pending
7/22/14
6/20/14
5/16/14
Pending
4/8/14
3/6/14
Pending
2/28/14
5/9/14
12/19/13
12/5/13
10/25/13
2/6/14
11/26/13
11/15/13
Average
Median
Target
Buyer
Zygo Corporation
UPECA Technologies Sdn. Bhd.
PGA Electronic s.a.
Symmetricom Inc.
Six3 Systems Inc.
AeroSat Corporation
Peco, Inc.
Primus Composites
Valent Aerostructures
Average
Ametek Inc.
Senior plc
Astronics Corporation
Microsemi Corporation
Caci International
Astronics Corporation
Astronics Corporation
Triumph Group, Inc.
LMI Aerospace
Closing
Date
20-Jun-2014
8-Apr-2014
5-Dec-2013
26-Nov-2013
15-Nov-2013
1-Oct-2013
18-Jul-2013
6-May-2013
28-Dec-2012
Notes:
(1) Includes recent acquisitions of Aerospace and Defense companies with purchase price greater than or equal to $30 million.
(2) Excess purchase price defined as total consideration less net tangible assets acquired.
(3) Purchase price and intangible asset percentages are based upon information obtained from acquirer's financial statements.
Purchase
Price ($ MM)
458.7
99.0
31.3
312.7
847.3
17.4
136.0
63.5
231.2
1,024.3
296.6
Implied
enterprise Implied equity Implied EV Implied EV
value
value
/ Revenue
/ EBITDA
74.4
47.1
0.8x
11.1x
63.0
63.0
0.2x
N/A
5,578.1
3,886.1
0.5x
7.3x
1,459.9
920.2
2.3x
11.9x
3,627.9
3,834.5
2.7x
24.6x
51.9
51.9
0.2x
N/A
288.8
365.7
1.7x
10.7x
2,700.0
1,528.6
3.3x
14.4x
1,419.7
865.8
1.1x
7.8x
126.4
97.5
2.7x
N/A
47.4
40.3
1.2x
N/A
1,514.6
1,593.5
1.7x
16.4x
53.0
53.0
0.8x
N/A
270.0
270.0
2.6x
19.3x
250.0
250.0
1.6x
N/A
37.4
37.4
0.8x
N/A
40.0
34.0
2.3x
N/A
392.2
371.0
1.1x
13.4x
243.3
317.3
1.2x
33.3x
1,032.5
780.0
2.3x
17.0x
963.5
260.0
770.3
293.6
1.6x
1.4x
53.0%
33.9%
43.0%
65.6%
18.9%
89.6%
49.8%
10.8%
26.4%
43.4%
11.5%
0.0%
7.4%
2.5%
0.0%
5.2%
3.0%
0.0%
0.5%
3.3%
30.9%
33.9%
23.1%
19.2%
18.9%
50.0%
44.4%
10.8%
25.9%
28.6%
10.6%
0.0%
12.6%
43.8%
0.0%
34.4%
2.4%
0.0%
0.0%
11.5%
15.6x
13.9x
Other
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Page 5 of 5
http://www.pwc.com/us/en/industrial-products/aerospace-defense
As of September 30, 2014
USD in millions, unless otherwise noted
Contacts
To have a deeper discussion about valuation developments and trends, please contact:
Steve Shanker
US Industrial Products Valuation Services Leader
steve.shanker@us.pwc.com
+1 312 298 6982
Brian McCann
US Industrial Products Deals Leader
brian.mccann@us.pwc.com
+1 617 530 6364
Authors
Steve Shanker
US Industrial Products Valuation Services Leader
steve.shanker@us.pwc.com
+1 312 298 6982
Jon Moulden
jonathon.e.moulden@us.pwc.com
+1 312 298 5248
Special Thanks To
Blaise Roth
2014 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Please see www.pwc.com/structure for further details.