C4ISR Market Update – September 2025

Golden Dome Offers Mission-Critical Opportunities in the C4ISR Market

The Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) sector has seen an uptick in merger and acquisition (M&A) year-over-year (YOY) and continues to serve as the backbone of modern military systems—identifying anomalies, tracking targets, coordinating responses, and guiding decisive action. Geopolitical tension and armed conflicts across the globe continue to drive demand for technologies capable of rapidly detecting threats and defending against incursions.  The U.S. Department of War (DOW) (formerly Department of Defense) has embraced technological advancements such as the proliferation of the Internet of Things (IoT), requiring secure and reliable C4ISR technologies to connect devices and systems. Changes in war fighting have narrowed the gaps between combat domains, increasing demand for technologies capable of uniting battlefronts. Dealmaking in the U.S. C4ISR market has come into heightened focus in recent months following President Trump’s January 2025 executive order to develop the Golden Dome—a first-of-its-kind, space-to-ground multi-layered defense system for the U.S. The Golden Dome and its intricate structure are expected to serve as a critical catalyst for revenue growth and merger and acquisition (M&A) opportunity within the C4ISR market.

President Trump estimated the Golden Dome’s cost at $175 billion with completion by 2029. The purpose is to protect the U.S. from strategic threats, such as intercontinental, hypersonic, and cruise missiles, by building a comprehensive, multilayered missile defense shield. This will materially increase C4ISR and missile systems spending over the next decade.

Tess OxenstiernaManaging Director & Head of Aerospace, Defense, Govt and Security
Capstone Partners

Geopolitical, Technological, and War Fighting Developments Drive C4ISR Market Demand

The C4ISR market has benefitted from a convergence of developments across international relations, technology, and modern warfare. Geopolitics have continued to serve as a key driver of demand within the C4ISR market. The Russo-Ukrainian War has increased defense spending among North Atlantic Treaty Organization (NATO) members by 18% since the February 2022 invasion, according to the Atlantic Council.¹ Surrounding countries have adopted aggressive defensive postures to dissuade conflict spillover, deploying radars and sensors along borders amid a heightened potential for attack. Intelligence, surveillance, and reconnaissance technologies have proven critical towards extending defensive capabilities beyond physical borders while providing critical non-kinetic support for Ukraine without direct involvement in the fighting. Similar dynamics have been fueled by the worsening of cross-strait relations between China and Taiwan and the prolonging of the conflict in the Gaza Strip. At the same time, technological advancements have magnified the importance of critical C4ISR technologies while also expanding the sector’s M&A landscape. Effective C4ISR solutions are required to leverage recent advancements including artificial intelligence (AI), cloud, data collection, and connectivity. This technological progress has extended the C4ISR market further into software domains, focusing M&A demand on innovative software-enabled startups. Raft’s June 2025 acquisition of defense software infrastructure developer N3bula Systems (undisclosed) to strengthen the AI and data capabilities of its autonomous battle management solutions serves as a prime example of the importance of software within the modern C4ISR market. The role of C4ISR within modern warfare has also come to the forefront as recent conflicts and defense strategies underpin the importance of multidomain combat. C4ISR technologies serve as the backbone of communication across these domains, providing critical intelligence and communications while unifying command and control. The DOW has emphasized the importance of synchronizing and integrating assets across organizations. “Establishing a layered domain awareness network to detect and track threats approaching North America, from the seabed to space, remains our top priority because you can’t defeat what you can’t see,” said General Gregory Guillot in a February 2025 Senate Armed Services Committee hearing.² Market participants have recognized the importance of aligning their offerings with the enablement of multidomain warfare. Space infrastructure company Redwire (NYSE:RDW) made a push into the Defense industry via its January 2025 acquisition of unmanned aerial vehicle (UAV) manufacturer Edge Autonomy for $925 million, equivalent to 3.2x EV/Revenue and 12.9x EV/EBITDA. This transaction comes as part of a wider corporate strategy to enter the market with multi-domain C2 capabilities, aligning Redwire’s portfolio with key DOW priorities including coordinating efforts across ALSS systems and Golden Dome development. The deal has rapidly recognized success, having secured Redwire a contract within the U.S. Army’s Long-Range Reconnaissance (LRR) program and establishing the relationships and credibility required to pursue new Golden Dome opportunities.

The positive deal activity momentum seen in 2024 within the C4ISR market has continued in YTD 2025, posting a 2.8% YOY increase to 37 transactions. Strategic buyers have continued to account for the majority of dealmaking YTD, displaying growth alongside financial buyers in YTD 2025. Private strategic deals have posted the largest YOY gains, investing in scalable intelligence platforms with wide addressable markets across Government, Defense, and Commercial markets. Financial sponsors have also targeted this section of the market for new investment opportunities, with Mill Point Capital and McNally Capital both entering the intelligence market with the acquisitions of SS8 Networks (June 2025, undisclosed) and Quiet Professionals (May 2025, undisclosed), respectively. Private equity (PE) add-on activity has remained stable YOY as sponsors continue to inorganically bolster portfolio company offerings. Average revenue purchase multiples have more than doubled YOY from 1.3x to 2.7x in YTD 2025 as buyers vie for well-positioned growth targets, while average EBITDA multiples have normalized from 15.7x to 10.1x.

The Role of C4ISR in the Golden Dome

The Golden Dome exemplifies the multi-domain approach to modern defense strategy, with each component of the C4ISR market is anticipated to play a critical role in supporting the missile defense kill chain of the system. Coordination between space-based radar systems, ground-based command centers, and naval air defense artillery will be required to ensure the successful operation of such a complicated system of systems. The Golden Dome signifies a break from traditional U.S. approaches to air defense, which have historically consisted of siloed domain- and geographic-specific defense systems, according to Lieutenant General Heath Collins in a February 2025 Senate Armed Services Committee Hearing.² Technologies able to track incoming missiles during the vulnerable early boost phases are likely to prove most attractive in a modern threat landscape of adversary nations with powerful intercontinental ballistic and hypersonic capabilities. The Pentagon has identified space-based detection and interception systems as key to delivering this capability, and industry participants have responded in kind, according to a report by Breaking Defense.³ L3Harris (NYSE:LHX) has funneled $225 million in capital expenditure towards servicing this need, expanding two satellite manufacturing and test facilities, according to company press releases.^4,5 The company cited Golden Dome missile detection opportunities as the lead driver behind the investments, seeking to rapidly expand the number of assets it currently has in orbit. While large prime contractors such as L3Harris possess the existing capital and assets required to quickly scale their manufacturing operations, less traditional defense companies have been leveraging M&A. Ion (NYSE:IONQ) acquired space technology company Capella Space in July 2025 (undisclosed) to expand into the Defense market and bring quantum-resistant technology to the Golden Dome, signifying the opportunity that the project poses for companies outside of the Defense industry. The Golden Dome has initiated a shift within the Space Contracting segment, with companies such as SpaceX and Amazon’s (Nasdaq:AMZN) Project Kuiper engaging with defense opportunities outside of their traditional commercial and civilian focus. The White House and DOW have expressed unique openness to working with vendors beyond prime defense contractors in the development of the Golden Dome, offering valuable opportunities for smaller vendors. Notably, financial technology company Nukkleus  (Nasdaq:NUKK) used the Golden Dome opportunity to expand into the Defense industry with the December 2024 acquisition of Star 26 Capital—the owner of Israeli-based Iron Dome supplier B. Rimon Agencies—for an enterprise value of $360.7 million. The burgeoning air defense opportunity has led to a strategic realignment of the company into a defense holding company.

Innovative approaches to the detection and deterrence of drone-borne threats are expected to serve as net-new additions to the nation’s defensive capabilities, while solutions powered by AI and machine learning (ML) may aid in the identification of radar anomalies more effectively than previously capable. Commercial and military vehicle software vendor Applied Intuition acquired EpiSys Science, a developer of tactical AI detection solutions, in February 2025 for an undisclosed sum. Applied has been actively positioning itself to capitalize on growing defense autonomy opportunities across combat domains. “We are integrating tactical AI-driven autonomy solutions into the battlefields, enabling our warfighters to operate with greater precision, situational awareness and enhanced decision-making,” said Applied Intuition CEO Qasar Younis in a deal press release.⁶ Across these domains and solution sets, effective command and control (C2) assets are expected to be critical components of the Golden Dome. Successful operation of the system will require real-time collaboration between both U.S. military service branches and government organizations such as the Missile Defense Agency (MDA) and National Reconnaissance Office (NRO). Integrated C2 across organizations has been a historical pain point for the DOW, and has been deemed a priority for the Golden Dome. “We have to deliver on that vision of integrated command and control across the nation, across all these multiple platforms,” stated General Michael Guetlein, according to the Space Foundation’s Global Economic Summit.⁷ Capstone expects both capital investment and acquisition activity to continue increasing within the C4ISR market, as companies inside and outside of the traditional Defense Contracting sector continue to position their offerings to capitalize on emerging Golden Dome opportunities.

Defense Contractors and Vendors Align Acquisition Targets with Golden Dome Opportunities

The Golden Dome has hastened activity in the C4ISR deal market as defense contractors embrace M&A as a tool to inorganically expand portfolios with Golden Dome-applicable products. The White House has estimated the cost of a complete Golden Dome—with an operational target before 2029—to be approximately $175 billion, according to a report by DefenseScoop.⁸ The total opportunity has been calculated to be as high as $542 billion, toned down from an initial estimate of $831 billion, according to the Congressional Budget Office (CBO).⁹ In contrast to the oftentimes drawn-out contracting and fulfillment processes within the DOW, the high cost and short timeframe of the Golden Dome project has offered significant near-term revenue streams for defense contractors. However, fielding the system at such a rapid pace has presented the availability of pre-existing solutions as a unique obstacle for vendors. Whereas typical projects of this size and scale (e.g., Aegis Combat System, Joint Strike Fighter (JSF) Program, Next-Generation Air Dominance [NGAD] Program) have been structured as tiered opportunities built out over years—if not decades—of collaborative development, the Golden Dome has called for systems that are ready-to-deploy today. Companies have been leveraging M&A to rapidly expand their capabilities and align with Golden Dome requirements; two of these transactions are highlighted below.

• Rocket Lab Acquires GEOST (July 2025, $252.7 Million) – In July 2025, aerospace manufacturer Rocket Lab (Nasdaq:RKLB) acquired GEOST for an enterprise value of $252.7 million. GEOST develops electro-optical and infrared (EO/IR) satellite sensor payloads designed to enable space domain awareness—including advanced missing warning, communications, intelligence, surveillance, and reconnaissance—for national security missions. The transaction is part of an intentional expansion into the Defense sector for Rocket Lab. The timely deal positions Rocket Lab well to compete for Golden Dome missile tracking satellite contracts, offering an attractive, completely in-house, and packaged satellite launch service to defense customers. The company has actively repositioned itself as a prime contractor to best suit the Golden Dome initiative. “On the Golden Dome, we intend to be a significant player…part of the reason to change the structure of the company into the corporation better enables us to address some of these very important national security programs,” said Rocket Lab CEO, Peter Beck, according to the company’s Q1 2025 earnings call.¹⁰
• Parsons Acquires Chesapeake Technology International (July 2025, $89 Million) – Defense software development and systems engineering firm Parsons (NYSE:PSN) acquired Chesapeake Technology International (CTI) from Bluestone Investment Partners in June 2025 for an enterprise value of $89 million, equivalent to approximately 1x EV/Revenue and 10x EV/EBITDA. CTI is a developer and integrator of defense technologies, including C2 and electronic warfare (EW) solutions. Parsons cited alignment between CTI’s capabilities and the current administration’s defense spending priorities as a key driver of the deal. Once folded into Parsons’ Defense & Intelligence business unit, CTI is expected to significantly expand Parsons’ ability to service multi-domain, full-spectrum operations—such as the Golden Dome—as well as increase the company’s presence in the U.S. Indo-Pacific Command (INDOPACOM) region. Parsons CEO Carey Smith identified the Golden Dome as a key revenue opportunity for the firm, citing previous experience including a $2.2 billion systems engineering MDA contract in 2021, according to the company’s Q2 2025 earnings call.¹¹

Public Market Performance Positions Sector for Continued Uptick in M&A

Public American Aerospace & Defense (A&D) market leaders have experienced significant share price growth over the last twelve month (LTM) period, outperforming the broader U.S. stock market by nearly threefold. Upticks in performance across the S&P Aerospace & Defense Index have notably coincided with Golden Dome-related developments that have attracted investor attention as project plans materialize. Strategic buyers have positioned portfolios to capitalize on these opportunities, pursuing acquisitions of all sizes to better align with the requirements of the Golden Dome.

The C4ISR market has displayed sustained growth since 2024, driving total deal volume towards recent highs. The continuation of regional and global conflicts combined with shifts in warfare strategy has ushered in a period of heightened tension within government. Countries will continue to invest heavily in cutting-edge technologies to stay at the forefront of modern combat, providing the C4ISR market with a strong tailwind for continued M&A expansion. Capstone expects C4ISR market M&A activity to continue its growth in the second half of 2025 and into 2026 with the prolonging of U.S.-involved conflicts combined with the solidification of Golden Dome plans, funding, and contracting.

To discuss the market implications of the Golden Dome for America, provide an update on your business, or learn about Capstone’s wide range of advisory services and C4ISR market knowledge, please contact us.

Brendan Bradley, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. Atlantic Council, “Who’s at 2 percent? Look how NATO allies have increased their defense spending since Russia’s invasion of Ukraine,” https://www.atlanticcouncil.org/blogs/econographics/whos-at-2-percent-look-how-nato-allies-have-increased-their-defense-spending-since-russias-invasion-of-ukraine/, accessed September 16, 2025.

2. Library of Congress, “S.Hrg. 119-56 – United States Northern Command and United States Southern Command,” https://www.congress.gov/event/119th-congress/senate-event/336611/text, accessed August 7, 2025.

3. Breaking Defense, “Here’s the role that space-based interceptors will play in Golden Dome,” https://breakingdefense.com/2025/07/heres-the-role-that-space-based-interceptors-will-play-in-golden-dome/, accessed September 16, 2025.

4. L3Harris, “L3Harris Expands Florida Facility to Support America’s Golden Dome,” https://www.l3harris.com/newsroom/press-release/2025/08/l3harris-expands-florida-facility-support-americas-golden-dome, accessed August 26, 2025.

5. L3Harris, “L3Harris Expands Indiana Facility to Support America’s Golden Dome,” https://www.l3harris.com/newsroom/press-release/2025/04/l3harris-expands-indiana-facility-support-americas-golden-dome, accessed August 26, 2025.

6. Applied Intuition, “Applied Intuition Acquires EpiSci, Strengthening Position as Leader in All-Domain Autonomy Software for National Security,” https://www.appliedintuition.com/news/applied-intuition-acquires-episci, accessed September 17, 2025.

7. Space Foundation, “Innovate Space: Global Economic Summit,” https://www.spacefoundation.org/innovate-space-global-economic-summit/, accessed August 7, 2025.

8. DefenseScoop, “Trump: Golden Dome will cost around $175B, be ‘fully operational’ in three years,” https://defensescoop.com/2025/05/20/trump-golden-dome-cost-175-billion-fully-operational-three-years/, accessed August 7, 2025.

9. Congressional Budget Office, “Effects of Lower Launch Costs on Previous Estimates for Space-Based, Boost-Phase Missile Defense,” https://www.cbo.gov/publication/61237, accessed August 11, 2025.

10. Rocket Lab, “First Quarter 2025 Financial Results Update and Conference Call,” https://investors.rocketlabcorp.com/events/event-details/first-quarter-2025-financial-results-update-and-conference-call, accessed August 7, 2025.

11. Parsons, “Q2 2025 Parsons Corporation Earnings Conference Call,” https://investors.parsons.com/events/event-details/q2-2025-parsons-corporation-earnings-conference-call, accessed August 11, 2025.