7
deals
with an enterprise value greater than $1bn in H1 2024
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3Wire shared its insights on the aerospace and defense sector at the 2024 Farnborough International Airshow, highlighting the sector's resilience, with strong public valuations and sustained investor confidence. Despite continued challenges faced by Aerospace OEMs, the sector as a whole has outperformed the S&P and defense indices over the past year.
This momentum is mirrored in M&A activity, which remains robust, particularly for assets tied to national security, maintenance, repair, and overhaul (MRO), and the commercial space industry. With a surge in large transactions in the first half of 2024 and continued investor focus on key strategic areas, the ADG outlook remains bullish, signaling sustained growth opportunities for stakeholders.
See the charts we shared with business owners and industry leaders in our meetings below:
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Driven by the slowdown in aviation and the broader economy during the Covid-19 pandemic, many PE-owned assets remained on the sidelines or were recapitalized.
With business performance matching or exceeding pre-2020 levels, PE platforms previously sidelined are now coming to market at a record pace as funds look to capitalize on their longer-held assets (many of which are in the commercial aero sector).
(1) Multiple includes anticipated tax benefits, per company press release.
Source: FactSet as of July 2024.
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Since we started 3Wire and for the 2023 calendar year:
Armed conflicts in Ukraine and the Middle East this past year reinforced the critical roles of both new and old technology in modern conflict.
The outlook for 2024 ADG investing is multi-faceted – not limited to the cash-flow-driven buy-out strategies of the 1990s or the high-profile venture investors who have spotlighted successes like Palantir and SpaceX. It is “all of the above,” compounded by the unique mission requirements of its customers (often guarded by government classification), the complexity of contracting regulations, the contradiction of long-term contracts that remain subject to annual Congressional funding actions, and a new phenomenon of ESG concerns imposed on lenders and investors.
The robust diversity of the U.S. capital markets, which underpins the innovative and globally competitive technical sector, remains the most valuable weapon in our government’s arsenal. However, investing in the ADG sector demands a level of industry specialization that is not categorized by short- versus long-term holds, company size, or whether the company employs cutting-edge AI or the cutting tools of a manufacturing floor.
We established 3Wire to address the highly specialized and complex capital needs of the industrial base. Focusing on the aerospace, defense, and government services sectors, we aim to be a crucial partner and catalyst to founders, company owners, and capital sources for companies of national importance. By harnessing our extensive transaction experience, industry network, and partnership-focused approach, we are positioned to improve strategic planning for founders, companies, and investors while helping to ensure a strong national security position through a well-capitalized defense industrial base.
We are happy to share that in our first year of operation, we have seen this approach already gain strong traction in the marketplace –
From partnering with investors in businesses with scalable technology and talent for such customer needs, including:
To advising investors in exiting well-positioned businesses at both ends of the “old” and “new” spectrum described above, including:
As we unpack in our new offices at 1717 Pennsylvania Avenue NW in Washington, D.C., we reflect on the incredible potential and opportunity awaiting in the new year. 3Wire is uniquely positioned to be a vital conduit of strategic capital and advice within the ADG industrial base and partner to those motivated by the double bottom line of investing in the national security sector. We look forward to connecting with you in the coming months and discussing the many opportunities to invest in this critical industry. More to come.
(1) Multiple includes anticipated tax benefits, per company press release.
Source: FactSet as of July 2024.
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