As Memorial Day approaches and news of Warburg Pincus' agreement to buy Wencor hits the radar, it seems appropriate to take a look at PE activity in U.S. aerospace & defense.
Since the start of 2007, PE investment in the industry has risen on the whole, with a couple bum years between then and last year, which marked a peak of 43 deals, according to the PitchBook Platform. California snags the most deals in the space, with 21% of the total.
Why the rise? Perhaps one reason for the rise in PE activity is that, in general, the U.S. military is contracting more and more private companies across the board for various services. And with the huge Department of Defense budget behind military outsourcing, it makes sense that PE firms want a piece of the lucrative action. And as for the slowdown in 2014 thus far, perhaps that's because with ongoing governmental budget issues, the Pentagon's budget is likely to shrink.