What We’re Reading

Content Summary

In this December edition of our Aerospace, Defense & Government Services industry update, we review recent articles and developments impacting our target end markets. We also provide perspective on recent trends within the public markets as well as the M&A markets.

Boeing Global Services on Track for $50 Billion Goal

“Transitioning from the role of CIO of Boeing to CEO of Boeing Global Services might not look natural on paper, but in Ted Colbert’s case, there’s a lot of logic in the move. Colbert assumed the leadership of Boeing Global Services, announced Oct. 22, when Stan Deal moved into the position of CEO of Boeing Commercial Airplanes.”

MRO Network

Airlines Seek Technical, Not Just Economic Gains From PMAs

“The 2019 Annual Conference of the Modification and Replacement Parts Association (MARPA) highlighted some important trends in airline use of PMA parts, according to president Jason Dickstein. First, American Airlines vice president for technical services Craig Barton said cost savings are no longer the primary reason for choosing PMAs. Barton said American increasingly chooses PMAs because they can offer product improvements and cut the long lead times required for OEM parts. In addition, American feels better parts mean higher reliability for airline operations.”

MRO Network

How Major Helicopter Manufacturers Are Preparing for the Urban Air Mobility Market

“The development of electric and hybrid VTOL (eVTOL) aircraft around the world promises to usher in a new era of aerial mobility, changing the cost of access to vertical flight and potentially opening new markets. Each of the four major helicopter manufacturers — Airbus, Bell, Leonardo and Sikorsky — are taking a different approach to confronting the market disruption eVTOL aircraft and urban air mobility will leave in their wake…”

Aviation Today

Opinion: How The 2020 Election Is Likely to Affect Defense

“Unlike in the U.S. health care or energy sectors, it is so far hard to discern much of a stock market reaction for the defense sector in the run-up to the 2020 U.S. election. There has not been the equivalent of issues such as Medicare for all or fracking that has grabbed the attention of defense investors. That might be because defense and security issues have been absent from the debates so far, and Democratic candidates have put forth few detailed defense and foreign policy plans and proposals.”

Aviation Week

Perspective on Public Marketsa,b,1

Stock Price Performance – Last Twelve Months



Most Significant Stock Price Movement – October 31st to November 30th

screen_shot_2019-12-11_at_2.44.48_pm.pngStrong organic revenue growth across all business segments and ongoing divestiture of non-core assets





Modest revenue growth and increasing clarity around divestiture of Belfast / Morocco facilities supporting stock improvement





Reported quarterly profitability and 2020 guidance below expectations partially due to potential increased near-term investment activity

Recent M&A Transactions2



a. Current stock prices in USD as of 11/30/19

b. Aircraft OEMs: BA, BBD.B, EADS, ERJ

         Aerospace Supply Chain & Aftermarket Support: AIR, ARNC, ATRO, B, DCO, HEI, HRX, HXL, KAMN, MAL, MGGT, MOG.A, ROLL,

         Diversified Industrial: AME, CR, CW, ETN, GE, HON, PH, RR, TXT, UTX

         Defense Prime Contractors: BA, BAE, EADS, GD, HO, HII, LMT, NOC, RTN

         Defense Technologies: AVAV, CHG, CMTL, COB, CUB, ESLT, FLIR, KTOS, LHX, MRCY, TDY, ULE

         Government Services: BAH, CACI, LDOS, MANT, SAIC, VEC

         Diversified Services: ACM, BAB, FLR, GIB, ICFI, JEC, KBR, SRP

1. CapitalIQ

2. Mergermarket


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