We want to thank you all for reading our weekly Deal Notes during 2022. “Deal Notes” was created to address the important aspects of selling a mid-market Aerospace and Defense company, preparing for the sale process, and managing the many vital steps in ensuring a successful sale. We send Deal Notes to nearly 12,000 business leaders in the Aerospace & Defense industry to help them better understand the process and prepare for a company sale, when the opportunity may arise. In addition to providing Deal Notes via email each Tuesday morning, all of our past Deal Notes can be found on our website: https://www.aldermanco.com/deal-notes/.
While increasing interest rates, volatility in the equity markets, and outflows from private equity have dampened overall M&A activity recently, M&A transactions in mid-market Aerospace and Defense companies are continuing to happen because of two critical factors unrelated to those concerns: 1) the increase in defense spending due to significant escalation of geopolitical threats and 2) the snap-back of commercial aviation post COVID-19.
As we tell all of our clients in the mid-market of Aerospace and Defense, the single most important driver of the value of your business is the free cash flow that it will generate in the future, not what is happening in the equity markets or at the Federal Reserve.
We wish you Happy Holidays and increasing free cash flow in the year ahead.
Managing Director, Defense