Wave of aerospace and defense company acquisitions may be indication of things to come

Posted by John Keller

THE MIL & AERO BLOG, 17 Jan. 2013. Don't look now, but we may be experiencing a new wave of company mergers and acquisitions in the aerospace and defense business.

I don't have solid numbers -- this is more like a gut feel -- but from early December to early January I counted nine mergers and acquisitions, and I rarely see that many within one month's time.

Times are tough in aerospace and defense; we all know that. Perhaps this higher-than-usual number of mergers and acquisitions is the result of that.

To keep score, here are the transactions I counted in our industry from early December to early January:

-- Coherent Inc. in Santa Clara, Calif., acquired Lumera Laser GmbH in Kaiserslautern, Germany, in early January;

-- General Dynamics acquired Applied Physical Sciences Corp. in early January;

Related stories -- The defense industry may be adjusting to a new age of financial austerity -- Aerospace and defense electronics industry consolidation proceeding at a rapid pace -- Military avionics market to drop 1.3 percent in 5 years due to dwindling numbers of new aircraft.

-- Consolidated Precision Products Corp. in Pomona, Calif., acquired the ESCO Corp. Turbine Technologies Group in Portland, Ore., just after Christmas;

-- Dell Computer bought Credant Technologies in late December; -- Lockheed Martin bought the assets of software firm CDL Systems Ltd. just before Christmas;

-- Mitsubishi Heavy Industries bought United Technologies Pratt & Whitney Power Systems in mid-December;

-- Raytheon bought the Government Solutions business of security firm SafeNet Inc. in mid-December;

-- Precision Castparts Corp. bought the Littlejohn & Co. Synchronous Aerospace Group in mid-December; and finally

-- Carlisle Companies Inc. bought the Thermax–Raydex unit of Belden Inc. in early December.

Does it sound to you like our industry is in flux? It does to me, too ... and this is BEFORE sequestration hits in two months that will lop off nearly half a trillion dollars from the U.S. defense budget over the next 10 years.

That old curse is coming home to roost -- we do live in interesting times.