The Forces Driving M&A A June 2026 report from PwC noted that A&D dealmaking has moved past the post-COVID recovery period and entered a new stage of growth. Global deal value rose from around $27 billion in 2024 to more than $30 billion in 2025, and 2026 numbers show activity is on track to a similar full-year value. “The biggest (deal) drivers have been carve-out volume as suppliers actively reshape their port- folios, and the deeper push into the middle mar- ket by both strategics, including sponsor-backed platforms, and pure financial sponsors,” says Andrew Carolus, managing director of invest- ment banking at Mesirow. “That steady stream of activity is putting quality middle-market assets in play, and on the defense side specifically the appetite is the strongest we’ve seen this cycle.” Businesses addressing bottlenecks in the supply chain have become some of the sector’s most valuable assets. Investors are looking at production “choke points”—segments where there is just one sup- plier, ideally with a defensible moat like real intel- lectual property or one-of-a-kind manufacturing capabilities. Peraldo points to fasteners, a seg- ment that includes the hundreds of thousands of rivets, bolts, nuts, and other forms of fasteners Global A&D deal value
used in a single aircraft. The segment has seen several deals with high valuations driven by a complex, unique manufacturing process not easily replicated by new market entrants. These deals include Howmet Aerospace’s acquisition of Consolidated Aerospace Manufacturing and PennAero’s acquisition of TriMas Aerospace. (PennAero is a portfolio company of Tinicum.) While PE sponsors can face hefty competition for premium assets that strategics can scoop up before they even get to the auction block, Albright says he’s seen private equity become more aggressive in its bidding. “Buyers are now able to lean in a bit more, particularly if it’s something that is well-positioned—certainly a true one-of-one. They’ve got IP or sole-source positions on critical platforms, either commercial or defense,” he says. Peraldo adds sponsors are increasingly moving down to the lower middle market to “build their own” premium asset via a roll-up strat- egy. “Frustration is growing among certain sponsors because it is becoming increasingly difficult to buy a large asset in the space,” he says, “so they are looking at the lower middle market (and) rather than buying a $500 million EBITDA asset, they build that $500 million $10 million at a time by looking at the lower end of the market and doing a roll-up.” Another desirable attribute is exposure to multiple end markets, says David Farkas, managing director of Aerospace, Defense, and Government Services at Macquarie Capital. “What’s really attractive is demonstrating that you have a good grasp of what exposure you have to what platforms, have multiple end markets, and really understand what your plan is for growth in those markets,” he notes.
2024
$27 billion
$30+ billion
2025
$32 billion
2026 PROJECTED
Source: PwC
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