A new KippsDeSanto report has found that approximately 75 percent of dealmakers said they expect the number of mergers and acquisitions in the government services sector to climb by at least 5 percent this year.
KippsDeSanto said Tuesday it polled 168 strategic buyers and executives from private equity groups who are interested in defense, government services and aerospace sectors and found that approximately 68 percent of respondents said they expect M&A deals in the defense industry to rise by 5 percent or more in 2018.
Nearly 50 percent of respondents said they predict aerospace transactions to jump by 5 percent or more in 2018.
“Across all the sectors we surveyed, most respondents were optimistic that anticipated M&A activity levels would be up 5 percent or more,“ said Bob Kipps, managing director of KippsDeSanto.
“This confidence level for the aerospace, defense and government services sectors is resulting, in part, from last year“™s tax law changes, ongoing economic confidence and an improved U.S. defense budget picture,“ Kipps added.
At least 90 percent of dealmakers said they expect economic growth this year, according to the study.
More than 80 percent of respondents said they believe defense spending is the most influential factor to M&A activity and 48 percent said the addition of new technologies and capabilities is their top priority that drives their M&A strategy.
The report also showed that 57 percent of respondents consider command, control, communications, computers, intelligence, surveillance and reconnaissance as their top focus area for M&As in the defense sector, while 88 percent said cybersecurity is their top priority in the government services sector.