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For bankers specializing in aerospace and defense businesses, mergers and acquisitions activity has been lively this year. Deals are being driven by large companies, so-called strategic buyers, that have been busy swallowing up smaller counterparts to expand product lines.
The M&A activity is also being driven by tax issues facing owners of companies up for sale and comes at a time when there is uncertainty about the next US president's spending priorities.
At Houlihan Lokey, the aerospace banking group has closed or signed 15 transactions in a six-month period, according to Anita Antenucci, a managing director at the investment banking firm who runs its aerospace investment banking effort. That compares with 19 transactions completed in 2007, says Antenucci. "I think that the number of deals will outpace last year's level. Within aerospace, it is still as busy as ever" when it comes to M&A.
Houlihan's aerospace group, also known as the Aerospace Defense Government Group, has 25 investment bankers in Washington, D.C., and Los Angeles. When it comes to M&A transactions valued at under $500 million, the aerospace group at Houlihan is the leading provider of banking advice in the industry.
Other notable banking firms involved in aerospace and defense are Goldman Sachs, Credit Suisse, Morgan Stanley as well as Jefferies Quaterdeck. (Antenucci started her career at Quarterdeck before it was acquired by Jefferies.) Also, the now-defunct Bear Stearns was active within aerospace banking.
The deals managed by bankers at firms such as Houlihan are a fraction of the transactions completed within the aerospace industry. While billion-dollar deals capture headlines in the media, there are many more transactions valued in the hundreds of thousands to million dollar range.