Dear Friends,
As we reach the end of the first quarter of 2026, the Aerospace, Defense, and
Space markets continue to show notable growth, even against a more volatile
geopolitical and macro backdrop. Public market performance, private
investments, and strategic M&A activity all reinforced the view that investors and
acquirers remain highly focused on differentiated, mission-critical platforms
positioned at the center of national security.
Defense Sector Momentum in Q1 2026
In Washington and across the broader defense ecosystem, the quarter was
defined by escalation in the Middle East, rising urgency around munitions
replenishment, and a growing recognition that affordable, multi-tiered defense
systems are now essential. The Iran campaign further validated the importance of
C-UAS, interceptor recapitalization, base hardening, and broader industrial base
expansion, while strategic and sponsor-backed buyers remained active in
autonomy, space, simulation, and other capability areas tied to modern defense
priorities.
Space and Defense Technology Trends
Space and defense technology continue to attract outsized attention. SpaceX’s
reported IPO filing and the continued surge in defense tech capital reinforces
how quickly the sector’s center of gravity is evolving toward production-ready
platforms, dual-use technologies, and modern defense systems. Buyers are
increasingly willing to pay for scarcity, technical depth, and clear exposure to
durable, well-funded programs.
Commercial Aerospace Recovery
Commercial aerospace showed signs of improvement, though the recovery
remains uneven. Aftermarket and MRO businesses continue to benefit from strong
utilization, aging fleets, and long-term demand for repair and replacement
activity, while airlines remain cautious amid ongoing production constraints, fuel
cost volatility, and broader uncertainty in global travel patterns.
Strong M&A Appetite Continues
Despite these headwinds, M&A appetite for premium aerospace and defense
assets remains strong. Capital remains available, buyer conviction is high, and
businesses with differentiated capabilities, entrenched customer relationships, and
exposure to priority end markets continue to command significant interest.
As always, we appreciate your partnership and welcome the opportunity to
connect.
Sincerely,
Trevor Bohn & Ryan Murphy