PE activity is flourishing across multiple segments of the commercial aerospace industry, with solid industry tailwinds and optimistic investors brushing aside headwinds hampering dealmaking in other sectors.
This trend is particularly evident among manufacturers of aircraft components, an area that has become a hotbed for PE investment this year.
In 2024, through Q3, dealmakers inked 74 PE pacts in the aircraft parts and components sector, comprising platform acquisitions, add-ons and minority investments.
The three-quarter-year sum is on par with the deal count for all of 2023 and already surpasses 2022’s full-year tally, according to PitchBook’s inaugural report on the aerospace and defense industry.
PE firms have been ramping up acquisitions in the aviation aftermarket. They are attracted to the industry’s promising growth tied to a growing need for airplane upkeep, and the opportunity to consolidate a highly fragmented market, the report says.
Air travel demand has rebounded strongly from its pandemic slump and continues to grow. However, the aviation industry’s rising need for newer aircraft is hindered by a lag in production capacity—thanks in part to Boeing’s production slowdown. The imbalance has resulted in increased reliance on existing aircraft, thus driving the demand for parts and maintenance services.
Compounding that interest are the airlines seeking to bring their idled aircraft back into operation after being grounded during the pandemic. This has led to a massive backlog of maintenance work.
The aircraft parts and components market saw a profusion of deals this year, including Core Industrial Partners’ acquisition of Aviation Concepts, a global supplier of replacement parts for commercial aircraft. In July, Platinum Equity acquired Héroux Devtek, a maker of landing gear, for C$1.35 billion (around $961 million).
The maintenance, repair and overhaul sector is another sector that benefits from these favorable growth drivers. PE deal activity in the market has rebounded since its recent trough in 2021, with 25 deals completed in 2023 and 19 inked during the first three quarters of this year.
Featured image by Monty Rakusen/Getty Images
Learn about our editorial standards.
