December 8, 2023

For sale signs are posted in front of homes for sale in Greenbrae, Calif.

Justin Sullivan | Getty Images

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Overview: M&A is underway

There have been various mergers and acquisitions in the aerospace sector since the start of the year, but deal activity is only just picking up.

I spoke to bankers, private equity partners and investors this week to do a candid health check on the industry’s M&A activity, and there’s a fairly unanimous consensus. As one financier put it: “The dominoes are starting to fall.”

“It’s a normal market cycle,” said another financier, with the pendulum swinging in the direction of a shakeout: “A lot of weaker companies are going out of business and there’s been a lot of consolidation.”

“We’re early on calculating actual demand versus hype,” said a third.

Most people I spoke with expected this period of company sales or closures to last 12 months, barring unexpected and wild swings in macroeconomic conditions. CNBC agreed to keep their identities confidential so they can speak freely about non-public discussions and opinions.

“Many of these startups that have emerged over the past few years will see the wall in front of them and probably sell before then,” said another financier.

At the top of the M&A market, multiple bankers told me that the United Launch Alliance — a joint venture between the two companies lockheed martin and Boeing —Continuing to shop around while packaging giant reportedly ball is looking to sell its aerospace subsidiary. ULA referred my request for comment on the sale process to Boeing and Lockheed. A Ball Aerospace spokesman declined to comment.

Meanwhile, even Boeing is exploring options for its space business, and “everything is on the table,” one financier told me. No “hard decisions” have been made about what the company might do with its space portfolio, though it could spin off or sell its satellite manufacturing unit, people familiar with the matter told me. Boeing did not respond to my request for comment.

During my talk, many people highlighted an important nuance: These deals, whether worth millions or billions of dollars, are not all created equal. The markets and underlying technologies for aerospace companies are often very different, and the reasons why one company sells or fails are often quite different from those of another.

The same is true for buyers, who may be looking for a deal in pursuit of deep discounts, quick talent additions in key areas, the addition of supplementary services or technology, or any other number of incentives.

“This is a rare opportunity…if you’ve been working hard through the market frenzy and you’ve been building a business with good unit economics…now is the time to move,” one person told me. “You really know how to clean up.”

How is this going

industry exercise

market mover

move forward boldly

  • David Anderman Joins Surf Air, a former SpaceX senior lawyer seeking to help the airline go public, serving as its chief legal officer. – CNBC
  • Steve Collar steps down as SES CEO, after more than 20 years at Luxembourg Satcom. SES Chief Technology Officer Ruy Pinto will assume the CEO role at the end of June and the company is searching for a permanent successor. – SES
  • Rick Baldridge retires ViaSun vice chairman, after leading the Inmarsat acquisition process. Baldridge joined Viasat in 1999 and has held positions including Chief Operating Officer and Chief Executive Officer. – ViaSun
  • Tony Ginges joins Terran track as chief operating officer, who previously served as Chief Operating Officer of Virgin Orbit, held leadership roles at Airbus OneWeb Satellite and Boeing’s satellite division. – Terran track
  • Ron Garan named CEO of ispace US operations: Garan, who flew on the space shuttle as a NASA astronaut and previously was an Air Force fighter pilot, will lead the Japanese company’s Denver office. – space
  • Curt Blake Joins Wilson Sonsini LLP, leading a new space-focused industry group. Blake is the co-founder and CEO of Spaceflight, which was recently acquired by Firefly Aerospace. – Wilson Sansini
  • Kerry Wisnosky hired as CEO of Quantum Spacejoins the spacecraft transportation and services startup whose previous company, Millennium Engineering and Integration, merged with QuantiTech in 2021. quantum space

on the horizon

  • June 18: SpaceX’s Falcon 9 launches Satria communications satellite from Florida.
  • June 19-25: Paris Air Show
  • June 21: ULA’s Delta IV Heavy launches NROL-68 satellite from Florida.