When selling a middle market aerospace and defense company (A&D), in addition to describing the company itself in detail and presenting historical and projected financials, it is important to highlight what the attributes of the company are that make it unique and position it for the highest price. Specifically, what makes the products or services of this particular company highly desired by its customers and enable it to generate solid profits and why a buyer would want to own this business.
It is not always that we see patented or legally protected products or services in our middle market A&D clients. Nevertheless we can always find unique capabilities (a/k/a intellectual property ) of our clients, that give them a Strategic Competitive Advantage. Some recent examples include: unique designs to enable improved cooling of aircraft engine components, machining techniques that enable greater throughput with exceptionally small tolerances, unique applications of exotic materials, and an on-shore supply chain that is extremely well managed. Long-term and diverse customer relationships can also be a strategic competitive advantage because they bring potential comfort to prospective buyers that future sales can be relied upon.
We therefore encourage potential future sellers of middle market A&D companies to identify, document, and be able to optimally describe their intellectual property well in advance of a sale. A company with a rich history of knowing and communicating its Strategic Competitive Advantage is worth much more that a company without.
Have a great day, everyone.
Managing Director, Defense