Air, Land, Sea, & Space Systems Market Update: Deal Activity Outpacing Prior Years

Space Innovation, Growth Opportunity Elevates Merger and Acquisition Demand

Capstone Partners released its Air, Land, Sea, & Space (ALSS) Systems Sector Update, reporting that the focus on space for military, commercial, and civilian activity has catalyzed start-ups and financing in the private sector, which will feed merger and acquisition (M&A) opportunities as the nascent Space segment consolidates and defense primes and emerging players acquire new technology and personnel.

Deal activity in the ALSS Systems sector has outpaced prior year levels with 89 transactions announced or closed in 2021 compared to 78 in 2020. Strategic buyers drove nearly 70% of M&A as businesses with strong corporate cash holdings diversified and augmented their portfolios. Notably, this deal volume includes the Capstone-advised sale of Cosmic Advanced Engineered Solutions, to Kratos Defense & Security Solutions, Inc. (Nasdaq:KTOS). The transaction closed in December 2021 and terms of the deal are confidential.

Also included in this report:

• What the National Defense Authorization Act means for the ALSS Systems sector.
• Commentary and insights into M&A activity including leading trends and drivers.
• Analysis on purchase price multiples within the Aerospace, Defense, Government, & Security industry as well as the ALSS Systems sector.
• A case study on Capstone’s Cosmic Advanced Engineered Solutions deal.