Mapping, Modeling, & Simulation Market Update – June 2023

Healthy Training Demand Continues to Propel Growth in Mapping, Modeling, & Simulation Market

Capstone Partners released its June 2023 Mapping, Modeling, & Simulation Market Update, reporting that merger and acquisition (M&A) volume in the sector has surged through year-to-date (YTD) 2023, as participants in the Simulation & Training segment have seen increased demand for training solutions across the Aerospace & Defense and Medical end markets.

The sector has continued to weather substantial macroeconomic headwinds including persistent inflation, labor shortages, and supply chain disruptions. Military simulation providers have seen an uptick in demand for outsourced training due to the cost-efficient nature of simulators and training services, compared to expensive military hardware. Live, virtual, and constructive (LVC) training integration has recently become a challenge for the U.S. military, supporting the development of outsourced services among sector players. Providers have increased their Training-as-a-Service (TaaS) options to address cost pressures and deliver reusable content, evolving their product offerings beyond training simulators. Capstone projects that training solutions, such as virtual training and TaaS programs, will benefit significantly from current market and geopolitical dynamics.

While the broader M&A market has experienced slowing volume, consolidation activity in the Mapping, Modeling, & Simulation space has surged, outpacing YTD 2022 and on track to surpass full-year 2022. Buyer appetite in the Simulation & Training segment significantly expanded year-over-year (YOY) while the Mapping segment remained robust, outpacing YTD 2022 levels on its own.

The U.S. Department of Defense’s military pilot retention efforts have placed a strain on airlines’ ability to access a vital labor pipeline. A persistent shortage of airline pilots has prompted commercial airline providers to invest capital into flight schools, resulting in elevated enrollment and robust job growth projections for commercial airline pilots. In turn, major airlines have also created partnerships with prominent flight schools, offering a host of additional benefits to students. Flight school revenues have increased by 20.3% (IBISWorld) since 2020 while demand for travel has normalized since the onset of the COVID-19 pandemic.

Also included in this report:

• How leading players in the Mapping & Modeling segment have expanded their product offerings to serve the Aerospace & Defense end market.
• A breakdown of notable trends in the Medical Simulation & Training market.
• Public company valuations and data.