A&D Weekly News & Transactions - Week 45

Industry Headline News

Boeing and Spirit AeroSystems are nearing a funding agreement to address Spirit’s cash flow issues, which include losses, delayed deliveries, and a liquidity warning
Nov. 8, 2024 - The deal aims to stabilize Spirit's finances as it supplies fuselage parts for Boeing and Airbus, with Boeing planning to acquire Spirit in 2025. Spirit is also considering asset sales and other options to raise cash amidst ongoing production challenges. (Yahoo! Finance)

Israel signed a $5.2B deal with Boeing to acquire 25 F-15 fighter jets, with delivery starting in 2031, boosting its strategic air power
Nov. 7, 2024 - The agreement, part of a larger U.S. aid package, includes options for 25 more jets and aims to enhance Israel's defense capabilities in the Middle East. This is Boeing’s second significant deal in Israel this year, following El Al’s $2.5 billion purchase of 737 MAX aircraft. (Reuters)

China Airlines is set to split a multibillion-dollar order for long-range passenger jets between Airbus and Boeing, with plans to replace its Boeing 777-300ER fleet
Nov. 6, 2024 - The airline is considering either the Boeing 777X or Airbus A350-1000, with the potential to order up to 20 jets. Political factors, particularly Taiwan's relationship with the U.S. and China, may influence the decision, though the airline maintains that its choices are based on business and technical considerations. (Reuters)

Aircraft parts supplier Spirit AeroSystems has expressed "substantial doubt" about its ability to continue operating
Nov. 5, 2024 - They cited financial struggles due to losses, debt, and challenges at Boeing, its primary customer. Spirit disclosed it may require additional funds within the next year and has proposed a financial plan that could involve workforce reductions. (MarketWatch)

Boeing's 7 week strike ended after 59% of its U.S. West Coast factory workers approved a new contract, offering a 38% pay rise over four years but no return of their old pension plan
Nov. 5, 2024 - The strike, which halted most jet production, cost Boeing millions daily and delayed production recovery, has pressured CEO Kelly Ortberg to rebuild worker relations amid lingering discontent. This resolution reflects collective bargaining power and may influence future supplier negotiations. (Reuters)

SK Capital completed its acquisition of Parker Hannifin's North America Composites & Fuel Containment Division, rebranding it as Axillon Aerospace with Kevin Vicha as CEO
Nov. 4, 2024 - Axillon, a key provider of carbon fiber composite and fuel containment solutions for defense and aerospace, generates $350 million in annual sales and operates across six locations in the U.S. and Mexico. SK Capital aims to expand Axillon's growth and innovation in the aerospace sector. (Business Wire)

Investment firm Stonepeak is acquiring Air Transport Services Group, a major cargo jet lessor serving clients like Amazon, for $3.1B marking a 29% premium on its stock
Nov. 4, 2024 - The acquisition, aimed at capitalizing on surging demand for freighter aircraft driven by e-commerce, will take ATSG private and allow for more flexible growth in the leasing market. The deal, expected to close in 2025, aligns with Stonepeak’s focus on logistics infrastructure, while ATSG anticipates benefits from a more patient, private ownership structure. (Freight Waves)

Weekly Transaction Review

No.	Parties Involved	Transaction Metrics			Location	Segment
	Target [Parent] Acquirer [Parent]	Price ($M)	Price/ Revenue	Price/ EBITDA	Target	Target
1	Aerojet Ordnance Tennessee [L3Harris] BWX	$100.0	2.5x	-	Jonesborough, TN	Specialty Defense Systems and Services
2	Aero Instruments & Avionics Aero Accessories & Repair [ATL Partners]	-	-	-	North Tonawanda, NY	MRO & Logistics
3	Air Transport Services Group Stonepeak Partners	$3,175.5	1.6x	6.8x	Wilmington, OH	MRO & Logistics
4	Micro Nav [Quadrant Group] Indra Sistemas	-	-	-	Dorset, United Kingdom	Simulation & Training Systems
5	Global ATS [Quadrant Group] Indra Sistemas	-	-	-	Cheltenham, United Kingdom	Simulation & Training Systems
6	Precision Acoustics Coda Octopus	$5.2	1.3x	-	Dorset, United Kingdom	Sensors & C4ISR
7	Gordon Plastics Toray Advanced Composites [Rivean Capital]	-	-	-	Montrose, CO	Composites
8	SIMCOM [Directional Capital] CAE	$230.0	-	-	Orlando, FL	Simulation & Training Systems
9	SGF Machining Solutions [Georg Fisher] United Grinding	$750.6	-	-	Biel Bienne, Switzerland	Machined & Cast Parts
10	Sabel Systems Sagewind Capital	-	-	-	Beavercreek, OR	Government Services, IT Services and Software
11	Optical Systems & Advanced Electronics Systems Businesses of Excelitas [AEA] Teledyne	$710.0	-	-	Miamisburg, OH	Defense Electronics
12	ENGIN-IC MACOM Technology	-	-	-	Plano, TX	Defense Electronics
13	Qubitekk IonQ	$22.0	-	-	Vista, CA	Defense Electronics
14	Schmelzmetall AMPCO METAL	-	-	-	Gurtnellen, Switzerland	Machined & Cast Parts
15	CAD Velocity One [Charlesbank Capital]	-	-	-	Fairfield, NJ	Components & Subsystems
16	Aerosphere Power Velocity One [Charlesbank Capital]	-	-	-	Cedargrove, NJ	Defense Electronics
17	EMCORE Velocity One [Charlesbank Capital]	$53.9	0.6x	-	Alhambra, CA	Defense Electronics

No.	Target Descriptions
1	Aerojet Ordnance Tennessee is a provider of advanced specialty materials, fabrication and high-strength alloy manufacturing, including depleted uranium engineered products. The company is the sole provider of depleted uranium to the U.S. government and produces other specialized materials, including tungsten, molybdenum, tantalum, rhenium, titanium, nickel, aluminum, copper, metal-matrix composites, metal polymer composites, reactive materials and custom alloys.
2	Aero Instruments & Avionics is a provider of test, repair, and overhaul services for private sector and U.S. federal government commercial, military, and regional aircraft platforms. The company specializes in in the service of flight displays, indicator controls, autopilot systems and various other aircraft accessories, instrumentation, and avionics.
3	Air Transport Services Group is a provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. The company operates through its principal subsidiaries, which include two airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates. ATSG provides air cargo lift, aircraft leasing, aircraft maintenance services, and airport ground services.
4	Micro Nav is a developer of civilian and military air traffic controller training solutions. The company's BEST (Beginning to End Simulation Training) system adapts to the needs of each client, offering combined tower and radar training as well as realistic immersive 3D scenarios.
5	Global ATS provides comprehensive training solutions that cater to UK and international requirements. Specifically, the company is a provider of air traffic control, air traffic management, English language, and safety management training.
6	Precision Acoustics is a manufacturer of hydrophones, ultrasound transducers, test stations and acoustic materials for private sector and international government medical imaging and Non-Destructive Testing (NDT) markets. The company's products are capable of measuring ultrasound in the frequency range 40 kHz to 50 MHz.
7	Gordon Plastics manufactures laminates and bar stock. The company offers unidirectional fiberglass with woven inlays, unidirectional fiberglass laminates and bar stock, high strength glass fiber laminates, unidirectional carbon fiber laminates and bar stock, and unidirectional fiberglass with 90 degree inlays. The company serves commercial, general industrial, and the aerospace markets.
8	SIMCOM is a provider of initial and recurrent pilot training for jet, turboprop, and piston aircraft using FAA-qualified flight training devices and full-motion simulators. The company also provides maintenance and specialty courses in avionics, crew resource management, high altitude endorsement, hypoxia training, light jet familiarization, multi-engine instrument refresher, single-engine instrument refresher, turbine transition, and upset recovery training.
9	GF Machining Solutions specializes in high-precision manufacturing technologies, including milling, electric discharge machining (EDM), laser texturing, laser micromachining, and additive manufacturing. The company serves the aerospace, automotive, and medical device markets.
10	Sabel Systems is a provider of digital R&D, acquisition and sustainment solutions to private sector and U.S. federal government defense markets. Sabel's Digital Engineering Cloud (DEC) allows the DoD to accelerate R&D, and enhance agility, scalability and connectivity needed to work more effectively and efficiently.
11	The Optical Systems business, known under the Qioptiq brand, provides advanced optics for heads-up and helmet-mounted displays, dismounted tactical night vision systems and proprietary glass used in space and satellite applications. The Advanced Electronic Systems business provides custom energetics, including electronic safe & arm devices, high-voltage semiconductor switches and rubidium frequency standards for defense and space applications.
12	ENGIN-IC is a fabless semiconductor company that designs advanced Gallium Nitride ("GaN") monolithic microwave integrated circuits ("MMICs") and integrated microwave assemblies for private sector and U.S. federal government aerospace and defense markets.
13	Qubitekk operates as a quantum key distribution developer. The company develops components and systems for quantum sensing, quantum cryptography, and quantum computing markets.
14	Schmelzmetall is a producer of high-performance copper alloys. The company is known for its specialized copper alloys, including Beryllium-containing powders and other high-purity materials, which offer unique advantages in demanding applications.
15	Cartridge Actuated Devices designs and manufactures energetic CAD/PAD devices including explosive squibs, pressure cartridges, valves, cable cutters, actuators, pin pullers, thrusters, explosive bolts, puncture devices, pneumatic actuation systems, underwater devices and oilfield products.
16	Aerosphere Power provides power system solutions (power control, power conversion, custom power designs) for commercial and military aerospace, military ground vehicles, and UAV applications.
17	EMCORE is a provider of advanced inertial navigation products for the aerospace and defense, commercial, and industrial sectors. The company specializes in fiber optic, ring laser gyro, and MEMS technologies for navigation applications.