Aerospace & Defense Report 2014 in Review

M&A INTERNATIONAL INC.
Aerospace & Defense Report
2014 in Review
www.mergers.net

2M&A International Inc. - we close deals in your industry
Table of Contents
1. Introduction............................................................................................................................................................................................ 3
2. Aerospace & Defense Industry Trends ................................................................................................................................................. 4
Top Commercial Primes.................................................................................................................................................................... 6
Commercial and Military MRO.......................................................................................................................................................... 9
Global Defense Spending .............................................................................................................................................................. 11
3. Aerospace & Defense M&A Activity .................................................................................................................................................... 13
Consolidation ................................................................................................................................................................................ 13
Select Acquisitions by Leading A&D Industry Players ................................................................................................................... 14
European Joint Ventures ............................................................................................................................................................... 16
Private Equity ................................................................................................................................................................................ 17
Global M&A ................................................................................................................................................................................... 18
Global M&A by Segment ................................................................................................................................................................ 20
Defense M&A ................................................................................................................................................................................ 23
Recent Notable Defense M&A Deals ............................................................................................................................................. 23
4. Highlighted Transactions .................................................................................................................................................................... 24
Precision Castparts Corp. Acquires Aerospace Dynamics .............................................................................................................. 24
Alliant Techsystems Inc. Merges with Orbital Sciences Corp.......................................................................................................... 25
Cobham plc Acquires Aeroflex Holding Corp. ................................................................................................................................. 27
Engility to Acquire TASC from KKR and General Atlantic .............................................................................................................. 29
5. Highlighted Platforms ......................................................................................................................................................................... 31
Bombardier CSeries ...................................................................................................................................................................... 31
Terminal High Altitude Area Defense (THAAD)............................................................................................................................... 33
Northrop Grumman Global Hawk ................................................................................................................................................... 35
Airbus A320neo ............................................................................................................................................................................. 37
6. About M&A International Inc................................................................................................................................................................ 39
7. Recent Transactions Closed by M&A International Inc.’s Specialists............................................................................................... 40
8. Main M&A International Inc. Aerospace & Defense Specialists......................................................................................................... 42

1Introduction
AEROSPACE & DEFENSE REPORT
Introduction
The aerospace and defense industry is
undergoing major structural change, driven
by increased globalization, rapid consolida-
tion and continued pricing pressures. While
commercial aerospace orders, deliver-
ies and backlog remain at historic highs,
defense budgets are under considerable
downward pressure. While the commercial
aerospace sector is seeing the introduc-
tion of new platforms and programs (787-
10, 777X, 757 replacement, etc.), certain
defense platforms and programs face the
risk of either cancellation or curtailment
(C-17, A-10, F-16, U-2, etc.). These trends,
discussed in the first section of this report,
will provide a basis for the analysis in the
second and third sections regarding the
resurgence in M&A deal activity and rising
valuations. This report also includes brief,
regional aerospace & defense updates from
our local experts.
Excellent Time to Sell
“As 2014 has come to a close, we wanted
to share some high level thoughts on
deal valuations and key trends within the
Aerospace & Defense (A&D) industry.
Businesses continue to trade at
exceptionally high valuations. A
combination of high stock prices, low
interest rates, lite covenants, pent-up
demand for deals, excess cash on
corporate balance sheets, private equity
overhang, improving fundamentals,
amongst other factors, has contributed
to a valuation environment that is
very strong. Competition among
buyers to acquire certain key strategic
businesses has at times been intense.
Notwithstanding near-term bullish
forecasts, the A&D industry is
undergoing major structural change.
It is our belief that business owners
should not overlook the impact of these
structural changes on the future survival
and prosperity of their businesses. A
careful assessment of one’s financial
and strategic objectives is as timely
today as it has ever been.
Bottom line: From a valuation
perspective, there has rarely been a
better time for an A&D business owner
to sell than the present. Our A&D Group
brings extensive industry expertise,
buyer knowledge and an understanding
of specialized issues facing A&D
business owners and companies.”
Stephen Perry
Head of M&A International Inc.’s
Aerospace & Defense Group

Aerospace & Defense Industry Trends
2
Figure 1: Cumulative Deliveries Value (US$b)
Commercial aircraft original equipment
manufacturers (OEMs) are expected to
amass over 36,000 deliveries in the next 20
years, including the development of new ver-
sions and upgrades, such as Boeing’s 777X
and Airbus’ A320neo. Over 25,000 of these
deliveries, valued cumulatively at US$2.6
trillion, consist of single-aisle aircraft. Me-
dium wide-body (US$1.2 trillion) and small
wide-body (US$1.1 trillion) aircraft rank a
distant second and third, respectively, for
deliveries over the next 20 years. Newer
and upgraded aircraft are expected to oper-
ate at increased range, reduced noise, in-
creased engine power and lower operating
cost. Emerging markets, such as Asia and
the Middle East, are expected to receive
over 50% of projected deliveries through
2033. Airbus’ A320neo and Boeing’s 737
MAX are expected to rank as the two top
commercial aircraft for cumulative delivery
value between 2014 and 2023. Lockheed
Martin’s F-35 is forecasted to be in the top
five for cumulative delivery value between
2014 and 2023, with fighter aircraft demand
primarily driven by the need to replace ag-
ing F-18 and F-16 aircraft fleets.
Airbus A320neo
Boeing 737 MAX
Boeing 787
Airbus A350XWB
Lockheed F-35
Boeing 777
Airbus A330
Bombardier Global
Boeing 777X
Airbus A380
Embraer E-Jets
Gulfstream 650
Airbus A400M
Sikorsky H-60
Boeing 747
Boeing 767/KC-46
Gulfstream 550
Lockheed C-130J
Gulfstream 450/P42
Boeing AH-64
$0 $30 $60 $90 $120 $150 $180 $210 $240 $270
2014-2023 2004-2013
Source: Teal Group Corporation; data as of 2014

2
Figure 2: Commercial Aircraft 2014-2033
Forecast by Region
Figure 3: Commercial Aircraft Deliveries 2014-2033
Source: Boeing
Source: Boeing
37 20 20 8
3%
4%
8%
8%
20%
20%
37%
36,770
Total
Deliveries
Regional Jets:
6%
Single-Aisle:
70%
Small Wide-
Body: 13%
Medium Wide-
Body: 9%
Large Wide-
Body: 2%
Average Deal
Value
2,490 25,680 4,520 3,460 620
Regional Jets: 6% Single-Aisle: 70% Small Wide-Body: 13% Medium Wide-Body: 9% Large Wide-Body: 2%
620
3,4604,520
25,680
2,490
Regional Jets: Single-Aisle: Small Wide- Medium Wide- Large Wide-
Regional Jets: 2% Single-Aisle: 47% Small Wide-Body: 23% Medium Wide-Body: 23% Large Wide-Body: 6%
US$100b
US$2,560b
US$1,140b US$1,160b
US$240b
39 20 17 6 12 3 3
3%
3%
12%
6%
17%
20%
39%
Asia-Pacific
Europe
North America
Latin America
Middle East
C.I.S.
Africa
US$5.2t
Total Value
# Aircraft
Dollar Value

2
Program Backlog
737NG 1,636
737 MAX 2,663
767 47
787 843
777 564
747 36
Total 5,789
Source: Boeing, Airbus, Market Research
Top Commercial Primes
Demand for commercial aircraft remains
extremely strong. In some cases, order
backlogs extend out 6-8 years at current
production rates. Boeing and Airbus accu-
mulated record industry backlogs in 2014.
The huge backlog reflects robust demand
for upgraded single-aisle aircraft, Airbus’
A320neo and Boeing’s 737 MAX.
Program Backlog
A320ceo 1,508
A320neo 3,621
A330 313
A350 779
A380 165
Total 6,386
Record Total Backlog
12,175
Airbus/Boeing Combined
Platform
H2
2011
H1
2012
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
Forecast
737 31.5 35 35 38 38 42 42
Plans to increase the monthly production rate to 47
beginning in 2017
747 1.5 1.5 2 2 2 1.5 1.5
Plans to further reduce the monthly production rate to 1.5
from Feb 2014 through the end of 2015
767 2 2 2 2 1 1.5 1.5
Expects to increase the monthly production rate to 2 in
2016
777 7 7 7 8.3 8.3 8.3 8.3 First 777X delivery expected in 2020
787 2.5 3.5 5 7 7 10 10
Plans to increase the monthly production rate to 12 in
2016 and 14 by 2020
Source: Boeing, Market Research
Boeing recently announced plans to ramp up production of the 737 aircraft from 42 per month to 47 per month beginning in 2017, claiming
global demand supports more of these fuel-efficient planes. The reduction in 747 output from 2 per month to 1.5 per month reflects a slower
recovery in the cargo market than the company anticipated. Monthly build rates of the 767 model rose slightly higher from 1 per month to
1.5 per month in order to respond to increased demand. 777 aircraft production increased from 7 per month to 8.3 per month as the 777X
nears its debut. In spite of early problems, Boeing’s 787 Dreamliner production has risen steadily from 7 per month to 10 per month and is
expected to continue growing.
Figure 4: Boeing Monthly Build Rate

2
Platform
H2
2011
H1
2012
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
Forecast
A320 38 40 40 42 42 42 42
Monthly build rate of 44 expected by Q1 2016 followed by
another increase to 46 in the following quarter
A330 8.5 9 9.5 10 10 10 10
Plans to maintain the current monthly production rate of
10 at least through 2015
A350 N/A N/A N/A N/A N/A N/A N/A
Currently in early production (first delivery for launch
customer Qatar Airways expected H2 2014); plans to
reach a monthly build rate of 10 by 2018
A380 2 2 2 2 2 2 2.7
Stabilized and refined production process in 2013; plans
to deliver 30 A380s in 2014, approaching a build rate of 3
Source: Airbus, Market Research
The A320neo leads the charge for the Airbus fleet, and its production increase from 40 per month to 42 per month carries into next year and
beyond. The company plans to maintain the current record levels of A330 output of 10 per month over the next 6 years to accommodate an
expected flat market. Airbus expects its A350 model to reach monthly build rates of 10 by 2018, but it currently remains in the early produc-
tion stage. For the A380, the company plans to keep production rates flat in the light of recent months of relaxed demand.
Figure 5: Airbus Monthly Build Rate
Figure 6: Aircraft Demand Drivers
$0
$20
$40
$60
$80
$100
$120
$140
14%
12%
10%
8%
6%
4%
2%
0%
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
3-MonthLIBOR
3-Month London Interbank Offered Rate (LIBOR), based on US$
DollarperBarrel
Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
Oil Prices
Interest Rates
Source: www.eia.gov

2
The recent decline in oil prices jeopardizes
the longest boom cycle for commercial air-
craft makers in the jet age. The upswing in jet
orders, which began before, and was largely
unaffected by the 2008 financial crisis, has
been driven in large part by two factors:
falling interest rates and climbing oil prices.
Abundant and inexpensive capital provided
airlines with an array of financing options to
modernize their fleets. Furthermore, high sus-
tained oil prices have precipitated demand
for more fuel-efficient aircraft. The unprec-
edented demand has led to the monumental
current combined backlog of over 12,000
unfilled orders for Boeing and Airbus, val-
ued at approximately US$2 trillion. Backlog
orders are, however, susceptible to delays/
deferrals with oil becoming less expensive.
Cheaper fuel reduces demand for more fuel-
efficient aircraft. Though lower fuel bills may
lessen the operating cost advantages of new
planes, the duration of the current global sup-
ply and demand imbalance for oil remains to
be seen and the more fuel-efficient aircraft
are likely to lead to huge cost advantages in
the long-term.
2012 2022
2009 150 275
2010 525 550
2011 800 1.400
2012 1.200 800
2013 1.300 1.500
2014 1.425 1.400
200
400
600
800
1,000
1,200
1,400
1,600
2009 2010 2011 2012 2013 2014
AirbusBoeing
Figure 7: Net New Orders of Aircraft Figure 8: Average Industry Fuel
Costs
Source: Airbus, Boeing
Year
Average Price
per Barrel of
Crude (US$)
% of
Operating
Cost
2003 28.8 14%
2004 38.3 17%
2005 54.5 22%
2006 65.1 26%
2007 73.0 27%
2008 99.0 33%
2009 62.0 26%
2010 79.4 26%
2011 111.2 28%
2012 111.8 30%
2013 108.8 30%
2014 101.4 29%
2015F 85.0 26%
Source: IATA Economics

2
US$1b
Figure 9: Commercial MRO
Source: Moog, ICF
Aircraft retirement ages directly impact the aerospace and defense industry, in particular those companies engaged in spares/aftermarket
and maintenance, repair and overhaul (MRO). Current trends demonstrate aircraft fleets are increasingly reaching the mature stage in their
life cycle, which will lead to rising spares/aftermarket and MRO spending.
Commercial and Military MRO

2
53
48
28
0% 20% 40% 60% 80% 100%
77%
90%
63%
48%
18%
49%
55%
58%
61%
48%
69%
38%
52%
60%
100%
61%
65%
28%
48%
53%
N/A
N/A
N/A
Current % of Retirement Age
Source: United States Air Force
Aircraft Type
Number of
Aircraft
Current
Average Age
Age at
Retirement
A-10 347 31 59
B-1 66 25 52
B-2 20 18 64
B-52 76 51 79
C/KC-135 417 51 84
C-130E 46 49 49
C-130H 268 26 N/A
C-130J 68 7 N/A
C-5A/C 59 41 68
C-5B/M 50 28 54
C-17 206 10 26
E-3 23 32 N/A
F-15 A/C/D 250 29 42
F-15E 222 21 44
F-16 C/D 1,023 22 36
F-16 Blk 30/32 317 25 43
F-16 Blk 40/42 395 22 40
F-16 Blk 50/52 245 18 37
F-22 166 6 34
KC-10 59 28 58
EC-130H 14 39 62
AC-130H 8 43 48
T-38 494 46 60
Figure 10: Military MRO (Age of Aircraft Fleet)

2
Figure 11: Global Defense Spending
Figure 12: Defense Spending
Source: SIPRI
Source: SIPRI, * SIPRI estimate
Developed countries, such as the US, France, UK, Germany and Japan, have exhibited only slight increases in the amount of national
military expenditure from 2004 to 2013. On the other hand, certain developing countries, such as Georgia, Ghana, Azerbaijan, Kazakhstan,
Afghanistan and Iraq, have significantly increased their national military expenditure from 2004 to 2013 by between 3-6 times.
US China* Russia*
Saudi
Arabia
France UK Germany Japan India
South
Korea
Italy
2013
Spending
(US$b)
$640 $188 $87.8 $67 $61.2 $57.9 $48.8 $48.6 $47.4 $33.9 $32.7
% Change,
2004–13
12% 170% 108% 118% 6.4% 2.5% 3.8% 0.2% 46% 42% 26%
2013
Spending as
a % of GDP
3.8% 2.0% 4.1% 9.3% 2.2% 2.3% 1.4% 1.0% 2.5% 2.8% 1.6%
Global Defense Spending

2
The United States’ defense spending de-
creased significantly in recent years as a
result of efforts to reduce the national defi-
cit and the withdrawal of forces from Iraq.
Despite budget sequestration, the United
States remained the global leader in military
expenditure in 2014, spending over three
times more than the next leading nation,
China. The subsequent top defense spend-
ers were France, Russia and Saudi Arabia.
Saudi Arabia signed multiple prominent
military contracts in recent years worth
US$43.5 billion with defense leaders Boe-
ing, General Dynamics and Raytheon. This
ultimately led to them becoming one of the
top five countries for global defense spend-
ing. Other countries that spent considerable
amounts on military equipment over the past
few years include Australia, Brazil, India,
South Korea and the United Arab Emirates.
Figure 13: Military Spending
Rest of the World:
Top 10 Foreign Military Spending
28 13 10 9 9 7 7
United States
28 13 10 9 9
5%
5%
7%
7%
7%
9%
9%
10%
13%
28% China*
Russia*
Saudi Arabia
France
UK
Germany
Japan
India
South Korea
Italy
US$705bUS$640b
US
Military Spending
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sum of select
recent notable
contracts shown
Figure 14: Military Contracts
Source: Defense Security Corporation, Market Research
Source: SIPRI, * SIPRI estimate

3Aerospace & Defense M&A Activity
Consolidation
Seeking to increase margins and market
share, leading tier 1 companies continue
to search for opportunities to merge with/
acquire strategic targets. 2014 had one of
the largest total disclosed values over the
past five years, driven by mergers of public
companies with combined enterprise values
in the billions, an effect of consolidation.
The merger of Alliant Techsystems Inc.
and Orbital Sciences Corporation was one
of the largest mergers in 2014. This trans-
action merged two prominent space and
defense companies into one strategic, fully-
integrated company with increased offerings
and greater expertise. Another component
of aerospace and defense consolidation
has been divestitures by public companies
of less strategic divisions post transaction,
such as United Technologies Corporation’s
divestiture of certain Goodrich assets.
Aerost
ructure
s
Flight
Contro
ls
A&D
Electro
nics
Enviro
n.
Contro
l
Syste
ms
Whe
els &
Brak
es
1. Priorität 0,11 0,18 0,22 0,26 0,27
2. Priorität 0,07 0,17 0,21 0,24 0,25
3. Priorität 0,82 0,65 0,57 0,5 0,48
Aerostructures
Flight Controls
A&D Electronics
Environ. Control Systems
Wheels & Brakes
Nacelles & Reversers
Engines
Electrical Power & Distr.
Interiors
Landing Gear
Auxiliary Power Units
0% 20% 40% 60% 80% 100%
3%
10%
25%
46%
46%
47%
48%
50%
57%
65%
82%
17%
42%
25%
25%
16%
21%
25%
24%
21%
17%
7%
80%
48%
50%
29%
38%
32%
27%
26%
22%
18%
11%
Supplier 1 Supplier 2 Others
Figure 15: Market Share
Source: ICF SH&E
A View From France
“The A&D sector has been particularly active in terms of M&A activity in France in 2014 with over 30 deals
publicly announced (deals involving at least one French party). Compared to 2013, the number of deals is
up by 50%. Three main strategic drivers can explain this high number of transactions.
Ongoing consolidation among metal & cast parts players: The steep ramp up in aircraft deliveries by
Airbus entails increasing capital needs for the entire supply chain. Weaker or smaller players encountering
difficulties to maintain production quality or to access adequate financial resources often resolve these
issues by joining a bigger and stronger player.
Acquisitions in the US and Canada are actively sought by Airbus’ suppliers. This is a way for them
to fulfill a double request from Airbus: 1) diversify its customer base by acquiring suppliers of Boeing and
Bombardier’s programs and 2) increase operating costs in US$, thereby reducing exposure to the €/$ rate
risk as Airbus implements its policy to grow payments in US$ to its European suppliers.
Growing attention to innovation: 2014 has seen numerous funding initiatives for innovative projects
in A&D, mainly around UAV projects, 3D printing and lightweight cabin equipment. Engine manufacturer
Safran Group has also launched “Safran Corporate Venture,” its own private equity fund dedicated to
innovation in engine technologies.
All these strategic moves are facilitated by the much easier access to financial resources provided by bankers
and PE funds. After being considered for many years as an industry that was “too risky” or “too technical”,
investors now seem to value the high barriers-to-entry, the comfort of having a backlog of several years of
activity, and the implementation of ambitious growth strategies by skilled CEOs. In this favorable context,
there is a good chance that the M&A activity of French A&D players will remain very dynamic in the coming
months.”
Raphael Petit
Aerospace & Defense Specialist
M&A International Inc.
France

Select Acquisitions by Leading A&D Industry Players
The tables below detail mergers and acquisitions valued in excess of US$500 million made by key aerospace and defense companies in
the last 20 years.
Target Year Value (US$b)
Rockwell Defense 1996 $3.2
McDonnell Douglas 1997 29.2
Hughes Space & Communications 2000 3.8
Jeppesen Sanderson 2000 1.5
Aviall 2006 2.1
Vought Operations in S. Carolina 2009 1.0
Argon ST 2010 0.8
Gulfstream Aerospace 1999 $5.5
GTE Government Systems Corp. 1999 1.1
Primex Technologies 2001 0.5
Motorola Integ Info Sys Group 2001 0.8
GM Defense 2003 1.1
Veridian Corporation 2003 1.6
Anteon International Corp. 2006 2.2
Jet Aviation Management 2008 2.2
Axsys Technologies 2009 0.6
Vangent 2011 1.4
E-Systems 1995 $2.3
Chrysler Technologies 1996 0.5
Texas Instruments Defense 1997 3.0
Hughes Electronics Defense 1997 9.5
AlliedSignal 1999 $16.7
Pittway Corp. 2000 2.2
Universal Oil Products 2005 0.8
Novar 2005 2.5
First Technology 2006 0.7
Metrologic Instruments 2008 0.7
Sperian Protection 2010 1.4
EMS Technologies 2011 0.6
Intermec 2013 0.7
Grumman Corp. 1994 $2.2
Westinghouse Military & Elec Sys 1996 3.6
Logicon . Inc. 1997 1.4
Litton Industries
–Avondale Industries
2001
1999
5.0
0.5
Newport News Shipbuilding 2001 2.5
TRW . Inc.
–BDM International
–LucasVarity
2002
1997
1999
14.3
1.1
8.0
Essex Corp. 2007 0.6
General Dynamics Military Aircraft 1992 $1.5
Martin Marietta Corp.
–GE Aerospace
1994
1992
13.0
2.7
Loral Corp.
–IBM Federal Systems
1996
1993
7 .6
1.6
COMSAT General Corp. 2000 2.6
ACS Federal 2003 0.7
* = includes acquisitions under US$500m
Bold = merger
Italics = acquisition by company prior to being acquired/merged itself

Sundstrand Corp. 1999 $4.2
Chubb Security 2000 2.0
Kidde Limited 2005 4.2
Rocketdyne Propulsion & Power 2005 0.7
Initial Electronic Security Group 2006 1.2
GE Security 2008 1.8
Goodrich Corp.
–Freedom Chemical Company
–Coltec Industries
–TRW Aeronautical Systems
2010
1998
1998
2002
18.6
0.6
2.0
1.5
10 Lockheed Martin Divisions 1997 N/A
Raytheon Aircraft Integration Sys 2002 $1.1
Vertex Aerospace 2003 0.7
Titan Corp. 2005 2.7
Insight Technology 2010 0.6
Cessna Aircraft 1992 $0.6
United Industrial Corp. 2007 1.0
Beechcraft Corp. 2014 1.4
Target* Year Value (US$b)
MAG Aerospace Industries, Inc. 1998 $0.2
Intertechnique SAS 1999 0.4
C&D Zodiac, Inc. 2005 0.6
Polaris Pool Systems, Inc.
(nka:Zodiac Pool Care, Inc.)
2005 0.3
Sell GmbH 2010 0.3
+ 20 sub-$100M or undisclosed acquisitions since 2002
Sextant Avionique 1999 N/A
Racal Electronics 2000 2.2
DCN Int'l (minority stake) 2007 1.0
Alcatel Critical Systems 2007 1.2
Marconi Selenia Communications
S.p.A. (nka:Selex ES S.p.A)
2002 $0,6
AgustaWestland 2004 1,9
SELEX Galileo 2007 0,5
DRS Technologies 2008 5,1
Snecma
–Sopartech (Labinal)
2005
2000
7.6
1.1
Sagem 2005 N/A
Sdu Identification 2008 0.6
GE Homeland Protection 2009 0.6
L-1 Identity Solutions 2011 1.6
Aérospatiale
–Matra Hautes Technologies
2000
1999
N/A
N/A
DaimlerChrysler Aerospace
– Siemens Defense Electronics
2000
1998
N/A
N/A
Construcciones Aeronáuticas 2000 N/A
Airbus S.A.S. 2006 3.5
Vector Aerospace Corp. 2011 0.7
Satair 2011 0.5
Siemens Plessey Electronics 1998 $0.5
GE, Marconi Electronics Systems
– Tracor
1999
1998
12.7
1.3
Lockheed Martin Aerospace Elect. 2000 1.7
Lockheed Martin Control Systems 2000 0.5
Alvis 2004 0.5
Digitalnet Holdings 2004 0.6
United Defense Industries 2005 4.5
Armor Holdings 2007 4.2
Tenix Defence 2008 0.7
Detica Group 2008 1.1
* = includes acquisitions under US$500m
Bold = merger
Italics = acquisition by company prior to being acquired/merged itself

European Joint Ventures
Joint ventures offer strategic advantages for all
parties involved in the formation of the entity.
European aerospace and defense companies
that utilize joint ventures have combined as-
sets in order to gain greater scale and strate-
gically position themselves as global industry
leaders. Recently, Airbus and Safran received
approval from the European Union antitrust
regulators to form a joint venture to consoli-
date the satellite, space launcher and missile
propulsion segments of both companies and
create a large, specialized company that will
serve the European community. The CEO of
Airbus, Fabrice Brégier stated, “With this joint
venture, industry has made a strong state-
ment and has assumed leadership to foster
Europe’s autonomous access to space.”
Figure 16: European Joint Ventures
Source: Company reports
A View From the UK
25%
37.5%
37.5%
21%
33%
46%50% 50%
ATR-600 Series
ATR 72-500 Series
ATR 42-500 SeriesJoint
Venture
Selected
Platforms
Percent
Ownership
Share-
holders
Typhoon (EF-2000)
– Tranche 1
– Tranche 2
– Tranche 3A
ASRAAM
Diamond Back
Dual Mode Brimstone
Laser Guided Zuni
Meteor
Viper-E
“The UK aerospace market is the second largest globally, after the US, with more than 3,000 companies.
The UK defense industry is a cornerstone of the British economy with an industry turnover of more than
£22 billion a year. Below are key drivers of the M&A trends in the UK A&D industry:
Civil aerospace - supply chain consolidation: In recent years we have witnessed an increase in mergers
and acquisitions between companies operating in the same supply chain, rather than between directly
competing businesses. With growing demand for higher commercial aircraft production rates, businesses
are looking to increase capital, enhance human resource capabilities and expand production facilities, and
many see vertical integration as one way of doing this. Last year, we saw Ultra Electronics Holdings plc
acquire ICE Corporation Inc., a specialist provider of aerospace electrical power management systems, in
order to extend its capabilities in the aerospace sector. With growing pressure on companies to increase
production, bolstering capabilities through supply chain consolidation is increasingly favorable; however,
there is concern over how this strategy may dampen innovation as companies look to sell rather than invest.
Defense - reduced military spending: In the defense sector there are some more fundamental issues
to overcome in terms of future defense spending and how M&A opportunities can be harnessed to help
companies improve their current position. With reduced defense and military spending budgets now in
place in Western economies, a number of defense companies are coming under increasing pressure to
explore new opportunities. Diversifying into new commercial aviation markets is one strategy and last year
we saw Cobham acquire Aeroflex, a producer of components and systems for wireless communications,
and BAE Systems acquire SilverSky, an expert provider of cloud security solutions.
Similarly, companies are also looking at other emerging economies that have growing defense budgets,
such as India and Brazil, as they offer opportunities. With political and regulatory factors creating a complex
industry environment, M&A is not always a viable option and as a result joint ventures are growing in
popularity. One example is in India, where only 13 Indian companies are fully licensed to bid on Indian
government defense contracts and several of these are actively looking for UK partners to boost capacity
and capabilities to take on these large contracts.”
Philip Barker
United Kingdom

Private Equity
Group
Select Transactions
Company Sub-Sector Acq.
MB Aerospace Aero-Engine Components 2013
Quantum Spatial Software/ Gov’t Services 2013
Iron Data Software/ Gov’t Services 2011
Compusearch Software/ Gov’t Services 2010
Novetta Solutions Cybersecurity/ Gov’t Services 2010
Landmark Aviation FBO/ MRO 2012
Booz Allen
Hamilton
Management Consulting/ Gov’t
Services
2008
Sequa Corporation Aerospace MRO and Metal Coating 2007
Wesco Aircraft Aerospace Distribution 2006
Aeronautical & GI
Holdings
Aircraft and Naval Systems/ Sensors 2014
IMECO Ship MRO 2013
National Response
Corporation
Diversified Regulatory/ Emergency
Services
2012
Doss Aviation Military Aviation Training & Simulation 2011
BeyondTrust
Software
Software/ Gov’t Services 2014
EMCORE, Space
Photovoltaics
Business
Space 2014
Anaren Microwave/ RF Components and
Subsystems
2013
CPI International Microwave/ RF/ Power and Control
Systems
2011
Private Equity
Private Equity acquisitions and exits account-
ed for 26% and 10%, respectively, of all trans-
actions in 2014. Of the acquisitions executed
by private equity firms, 60% were add-on
acquisitions for current portfolio companies.
The most acquisitive firms of 2014 were
Trive Capital, Arlington Capital Partners and
J.F. Lehman & Company with five, four and
three transactions, respectively. A popular
private equity strategy in 2012 and 2013 was
to acquire strategic add-ons for current plat-
forms, whereas numerous PE firms realized
investments in 2010 and 2011. This probably
suggests that private equity firms are building
current portfolios with the intention of realizing
investments over the next several years.
2010 22 46 29
2011
21 37 24
2012 34 14 24
2013 48 14 36
2014 39 25 27
0
10
20
30
40
50
60
2010 2011 2012 2013 2014
27
36
2424
29
25
1414
37
46
39
48
34
2122
Add-on Exit Platform
Figure 17: Private Equity Transactions by Type
Source: Dacis DM&A, CapIQ
Source: CapIQ, Dacis, company websites
A View From Seattle
“The consolidation of 1st Tier Boeing
suppliers has continued for the ongoing
reasons of scale, diversification and
desire on the part of the OEM to deal with
fewer suppliers and larger components.
With many private 1st Tier companies
having been acquired, the consolidation
has moved into the 2nd Tier. Therefore,
we are continuing to see significant
strategic transaction opportunities for
both 1st and 2nd Tier suppliers. We
expect this to continue well into 2016.”
Scott Hardman
United States, Seattle
Arlington Capital
Partners

Global M&A
Since 2010, international deals have con-
sistently accounted for 40%-45% of annual
transactions. After a low point in 2012, in-
ternational M&A rebounded with one of its
strongest years. In 2014, international M&A
successfully completed 103 transactions, with
approximately US$20 billion in enterprise val-
ue, half of the total disclosed enterprise val-
ues for the entire aerospace and defense in-
dustry. In general, the number of international
deals over the past five years has correlated
highly with the total number of aerospace and
defense transactions overall.
The average total enterprise value (TEV)/
EBITDA multiple over the five-year period of
2010-2014 for the UK, Europe, Middle East/
Africa, Canada and Asia-Pacific are 9.6x,
9.8x, 7.1x, 8.9x and 6.8x, respectively. Over
the same time frame, the top three targeted
regions for acquisitions outside of the US
were Europe, the U.K. and Canada.
2010 2011 2012 2013
Average Deal
Value
17,238 12,674 10,709 7,3
No. of Deals 92 81 58 95
$0
$5
$10
$15
$20
$25
$30
0
20
40
60
80
100
120
2010 2011 2012 2013 2014
103
95
58
81
92
TotalDisclosedDealValue
(US$billions)
NumberofTransactions
Total Disclosed ValueNumber of Transactions
45 30 9 9 6 1
1%
6%
9%
9%
30%
45%
Europe
UK
Canada
Asia-Pacific
Mid East / Africa
Other Americas
Figure 18: International Transactions (2010-2014)
Figure 19: Acquisitions in Non U.S. Regions (2010-2014)
A View From Germany
“Today’s market challenges have had a direct effect on M&A market activity as entire value chains are
in the midst of a global restructuring. Suppliers at all tier levels have begun to realize that a presence
on at least three continents is required in order to maintain a competitive position. Accordingly, there
is global pressure for consolidation and collaborations, including potential equity partnerships, that will
be increasingly important going forward in order to reach high-growth targets, to initiate/expand market
access and to acquire key technologies. Especially against the background of declining defense budgets,
further consolidation specifically in the defense sector is long overdue. Any companies that have not yet
approached globalization in earnest should realize that “business as usual” is not an option.
A growing requirement to offer increasingly innovative products, such as multi-level products and
services and new technologies, requires investments in R&D, HR, training and production. For example,
stricter regulations and government requirements cause continuous pressure to innovate regarding
fuel efficiency and environmental protection. To offset these costs, a growing number of companies are
moving towards flexible platforms and modular design to permit economies of scale and transferring
production activities to low-wage countries.”
Michael Thiele
Germany

Following three years of declining deal vol-
ume (273 deals in 2010, 206 in 2011 and 176
in 2012), A&D transaction activity picked up
in 2013 and 2014 with 215 and 256 deals,
respectively (Figure 20).
Public market valuations for A&D companies
are at their highest levels since before the
2008 financial crisis (Figure 21).
Others Electricity T&D total
09-4Q 31 24 55
10-1Q 45 33 78
10-2Q 40 17 57
10-3Q 37 28 65
10-4Q 46 27 73
11-1Q 30 21 51
11-2Q 35 23 58
11-3Q 25 11 36
11-4Q 32 29 61
12-1Q 14 22 36
12-2Q 24 19 43
12-3Q 16 18 34
0
20
40
60
80
100
09-4Q
10-1Q
10-2Q
10-3Q
10-4Q
11-1Q
11-2Q
11-3Q
11-4Q
12-1Q
12-2Q
12-3Q
12-4Q
13-1Q
13-2Q
13-3Q
13-4Q
14-1Q
14-2Q
14-3Q
14-4Q
72
51
74
59
67
48
53
49
63
34
43
36
61
36
58
51
73
65
57
78
55
54
41
50
30
37
323832
39
18
19
22
29
11
23
21
27
2817
33
24
18
10
242930
161517
24
16
24
14
32
25
3530
46
374045
31
Disclosed Undisclosed
Others total
09-4Q
0,0x
4,0x
8,0x
12,0x
16,0x
09-4Q
10-1Q
10-2Q
10-3Q
10-4Q
11-1Q
11-2Q
11-3Q
11-4Q
12-1Q
12-2Q
12-3Q
12-4Q
13-1Q
13-2Q
13-3Q
13-4Q
14-1Q
14-2Q
14-3Q
14-4Q
9,3x
7,5x
13,8x
10,1x
13,8x
12,1x
9,0x
7,5x
8,7x
7,3x
9,1x
9,4x
9,3x
10,2x
9,3x
10,0x
10,9x
11,5x
9,0x
8,6x
6,6x
6
3
4
8
9
5
4
3
7
5
7
6
7
8
11
10
13
12
11
8
3
EBITDA Multiple Number of Deals with Reported TEV/EBITDA Multiples
chart_15.pdf 1 17/02/15 17:52
Figure 20: Number of A&D Transactions
Figure 21: EBITDA Multiples based on Publicly Traded Companies
N

Global M&A by Segment
After the low point in 2012 of 176 transactions
and US$20.1 billion in disclosed A&D enter-
prise values, 2014 amassed over US$41.5
billion in total disclosed enterprise values on
256 transactions within the aerospace and
defense industry. The increase in both the
number of transactions and transaction vol-
ume from 2012 to 2014 represents CAGRs
of 13% and 27%, respectively. In 2014, 23
transactions were closed with an enterprise
value of over US$250 million. Of these deals,
11 had a valuation of over US$1 billion.
The most active Aerospace and Defense seg-
ments by disclosed deal values in 2014 (Fig-
ure 22) include: Engines & Engine Systems
(US$7 billion), Satellite, Satellite Services &
Space Systems (US$6.6 billion) and Cyber-
security, Intelligence Services and Homeland
Defense (US$5 billion). Segments with the
greatest deal activity in 2014 (Figure 23) were
Machined & Cast Parts (38 transactions),
MRO & Logistics (34 transactions) and Gov-
ernment Services, IT Services & Software (29
transactions). Controls & Systems (15.4x),
Specialty Defense Systems & Services
(13.4x) and Aircraft Interiors (12.9x) generat-
ed the highest TEV/EBITDA multiples in 2014.
The top strategic acquirers in 2014 consisted
of a mix of both commercial aerospace and
defense primes, with Triumph Group leading
the way with four transactions, followed by
Lockheed Martin, Zodiac Aerospace and BAE
Systems, with three transactions each.
Engines & Engine Systems
Satellite, Satellite Services & Space Systems
Cybersecurity, Intelligence Services & Homeland Defense
Machined & Cast Parts
MRO & Logistics
Defense Electronics
Sensors & C4ISR
Test & Measurement
Specialty Defense Systems and Services
Electronics Manufacturing (EMS) & Harnessing
Aircraft Interiors
Components & Subsystems
Connectors
Controls & Systems
Government Services, IT Services and Software
Composites
Land Systems
Navy/Maritime
Engineering and Project Management
Aerostructures
Simulation & Training Systems
Distribution
Unmanned Vehicles
Prime Defense Contractors
$0 $2,500 $5,000 $7,500 $10,000
$13
$23
$25
$51
$80
$292
$385
$419
$581
$794
$914
$930
$1,683
$1,700
$2,326
$3,849
$3,946
$3,983
$5,082
$6,611
$7,025
Total Disclosed Value(US$m)
Figure 22: Value of Disclosed Deals by Segment (2014)

A View from Cleveland
“We have seen the fortunes of a number of midwest manufacturing companies improve in the A&D sector.
These companies include providers of products as diverse as jet and turboprop engines and components,
aluminum structural aircraft components, aircraft braking systems, landing gear assemblies and
components, tanks and other military vehicles, heat exchangers for military aircraft and vehicles, steel for
armor plating, etc. Thus, although Midwest A&D manufacturers do not generally manufacture products as
exotic as a new F-35 fighter, they are benefiting from the engineering and design of many less glamorous
items and the “guts” of the more exotic ones.”
Mark A. Filippell
United States, Cleveland
Machined & Cast Parts 38
MRO & Logistics 34
Government Services, IT Services
and Software
29
Components & Subsystems 24
Sensors & C4ISR 17
Defense Electronics 16
MRO & Logistics
Government Services, IT Services and Software
Sensors & C4ISR
Defense Electronics
Specialty Defense Systems and Services
Controls & Systems
Test & Measurement
Cybersecurity, Intelligence Services and Homeland Defense
Composites
Satellite, Satellite Services & Space Systems
Aircraft Interiors
Land Systems
Unmanned Vehicles
Engineering and Project Management
Aerostructures
Navy/Maritime
Electronics Manufacturing (EMS) & Harnessing
Connectors
Distribution
0 10 20 30 40
1
2
2
4
4
4
5
5
6
6
6
6
7
8
8
10
14
16
17
24
29
34
38
Number of Deals
Figure 23: Volume of Deals by Segment (2014)

14-4Q
14-3Q
14-2Q
14-1Q
13-4Q
13-3Q
13-2Q
13-1Q
12-4Q
12-3Q
12-2Q
12-1Q
11-4Q
11-3Q
11-2Q
11-1Q
10-4Q
10-3Q
10-2Q
10-1Q
09-4Q
0x 4x 8x 12x 16x
6.6x
8.6x
9.0x
11.5x
10.9x
10.0x
9.3x
10.2x
9.3x
9.4x
9.1x
7.3x
8.7x
7.5x
9.0x
12.1x
13.8x
10.1x
13.8x
7.5x
9.3x
7
9
9
12
11
10
9
10
9
9
9
7
9
8
9
12
14
10
14
8
9
Number of Deals with Reported
TEV/EBITDA Multiples
6
3
4
8
9
5
4
3
7
5
7
6
7
8
11
10
13
12
11
8
3
6
TEV/EBITDA
6
3
4
8
9
5
4
3
7
5
7
6
7
8
11
10
13
12
11
8
3
6
Aerostructures
Aircraft Interiors
Composites
Connectors
Controls & Systems
Defense Electronics
Distribution
Land Systems
MRO & Logistics
Navy/Maritime
Sensors & C4ISR
Test & Measurement
Unmanned Vehicles
0x 5x 10x 15x 20x
9.7x
11.5x
13.4x
9.0x
10.3x
7.9x
11.3x
9.8x
7.7x
7.8x
11.7x
7.2x
9.2x
10.2x
10.2x
15.4x
10.0x
8.7x
12.9x
8.6x
10
12
13
9
10
8
11
10
8
8
12
7
9
10
10
15
10
9
13
9
Number of Deals with Reported
TEV/EBITDA Multiples
TEV/EBITDA
4
2
3
1
2
5
13
4
1
2
5
3
8
5
5
2
1
4
3
1
Cybersecurity, Intelligence Services
and Homeland Defense
Electronics Manufacturing (EMS)
& Harnessing
Engineering & Project Management
Government Services, IT Services
and Software
Satellite, Satellite Services
and Space Systems
Specialty Defense Systems
and Services
Figure 24: TEV/EBITDA All A&D
Transaction Multiples by Quarter (Last 12+ Quarters)
Figure 25: TEV/EBITDA All A&D
Transaction Multiples by Segment (Last 12+ Quarters)
Source: Dacis DM&A, CapIQ Source: Dacis DM&A, CapIQ
N
N

merged with
acquired
Defense M&A
Defense M&A activity continues to be adverse-
ly impacted by the lingering effects of seques-
tration. The total number of transactions de-
creased from a high of 93 in 2010 to a low of 59
in 2014, representing a CAGR of -9% over the
five-year span. From 2012 to 2014, defense
M&A activity remained flat, with approximately
60 defense transactions per year. The defense
sub-segment – cyber security, IT services and
software development – has been able to gen-
erate consistent deal flow, with a CAGR of 19%
from 2012 to 2014. Due to the increased threat
of compromised data and intelligence, along
with the events of the Sony hacking scandal
and Edward Snowden, defense customers are
ramping up security and data protection from
outside threats. Defense primes are meeting
the new security requirements through inter-
nal research and development or by targeting
smaller companies that specialize in data pro-
tection as potential acquisitions.
2010 2011 2012 2013
Average Deal
Value
25,4 26,1 25,1
No. of Deals
93 73 59
0%
20%
40%
60%
80%
100%
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013 2014
59
63
59
73
93
DefenseDealsasa%ofallA&DTransactions
NumberofDefenseM&ATransactions
Defense Deals as a % of all A&D Transactions
Number of Defense Deals
Figure 26: Defense Transactions 2010-2014
Recent Notable Defense M&A Deals
Defense/Government
Hybrid A&D
acquired
Date Annc’d
5/20/14
TEV
$1.5B
TEV/EBITDA
11.9x
acquired
Date Annc’d
5/20/14
TEV
$1.5B
TEV/EBITDA
11.9x
acquired
acquired
Date Annc’d
Oct-2014
Date Annc’d
Jun-2014
TEV/EBITDA
7.9x
TEV/EBITDA
15.6x
Price
US$1.1b
Price
US$1.6b
acquired
acquired
Date Annc’d
Feb-2014
Date Annc’d
Jun-2014
TEV/EBITDA
8.6x
TEV/EBITDA
15.6x
Price
US$1.5b
Price
US$1.6b
acquired
acquired
Date Annc’d
May-2014
Date Annc’d
Dec-2013
TEV/EBITDA
11.9x
TEV/EBITDA
0.3x
Price
US$1.5b
Price
US$1.4b
acquired
Date Annc’d
5/20/14
TEV
$1.5B
TEV/EBITDA
11.9x
acquired
Date Annc’d
5/20/14
TEV
$1.5B
TEV/EBITDA
11.9x
Date Annc’d
Apr-2014
Date Annc’d
Dec-2012
TEV/EBITDA
23.1x
TEV/EBITDA
8.5x
Price
US$3.3b
Price
US$4.3b
acquired
acquired
Date Annc’d
Oct-2014
Date Annc’d
Jan-2012
TEV/EBITDA
17.0x
TEV/EBITDA
n/a
Price
US$1.0b
Price
US$1.0b

4Highlighted Transactions
Precision Castparts Corp.
Acquires Aerospace Dynamics
Transaction Summary
On March 20, 2014, Precision Castparts
Corp. (NYSE:PCP) announced it has
agreed to acquire the assets of Aerospace
Dynamics International, Inc. (ADI) from The
Marvin Group for US$625 million in cash.
Subject to customary closing conditions and
regulatory approvals, the transaction is ex-
pected to close in the first quarter of fiscal
year 2015. The acquisition is expected to be
immediately accretive to earnings, adding
an estimated $0.10-$0.15 to EPS in the first
year, assuming no synergies1
. Precision
Castparts will integrate ADI into its airframe
products segment.
Aerospace Dynamics International
(ADI) Overview
ADI is a tier-one supplier for the commercial
and military aerospace industries. The Com-
pany manufactures machined parts and
specializes in large complex components,
hard metal machining and critical assem-
blies. Product offerings include structural
airframes (e.g., bulkheads, caps, fittings,
etc.), skins and panels (e.g., barrel panels,
wing skins, fuselage structural webs) and
multi-spindle machining (e.g., wing ribs,
landing gear beams, spars, etc.). ADI has
strong positions across many platforms in-
cluding the Boeing 737, 777 and 787 and
the F-18 and F-3. However, its main cus-
tomer is Airbus, with significant contracts on
the A350 platform in particular.
The Company is California-based and em-
ploys approximately 625 people in a 310,000
sq. ft. facility, with 50,000 sq. ft. of assembly
space and 220,000 sq. ft. of manufacturing
space. It operates over 45 spindles with ca-
pabilities including 3, 4, 5 and 6 axis high-
speed vertical and horizontal milling, 6 axis
high-speed horizontal machine centers,
CNC gantry profilers and CNC turning. ADI
utilizes raw materials, such as aluminum,
monolithic-graphite, high-strength steels,
titanium, stainless steel, inconel and invar.
Commentary
“ADI is an acquisition we have pursued for
several years,” said Precision Castparts
chairman and CEO Mark Donegan. “They
have invested in world-class facilities and
developed large part capabilities that will
expand our aerostructures product offering
and role on next-generation aircraft. The
PCC Aerostructures team, led by Andrew
Masterman and Joe Snowden, will aggres-
sively work with other PCC locations to
provide the fasteners, forgings and castings
that ADI currently purchases on the outside,
and look to drive additional opportunities to
optimize capacity and cost decisions across
our aerostructures businesses. ADI also
adds another leverage point to our growing
presence in Southern California.”
1
Market research, estimating ADI sales of US$210m and EBITDA of US$35m – US$40m
ADI Key Figures
Headquarters Valencia, CA, USA
Employees 625
Founded 1989
Revenue1
~US$210m
EBITDA1
~US$35m – US$40m
Deal Term Summary
Total Deal Value US$625m
Revenue Multiple1
~3.0x
EBITDA Multiple1
~15.6x – 17.9x
Acquirer Financing 100% Cash
ADI’s Management
John Cave President and CEO
ADI’s Capabilities
Machining, Assembly, Design
Engineering, Program Management
ADI’s Select Products
A340 Wing Rib, F-22 Nozzle Seal,
F-18 Bulkhead, C-5 Landing Gear, 777
Hinge Beam, Lay-Up Mandrel
Precision Castparts
Strategic Rationale
Significant Synergies
Augments Exposure to
High-Growth Commercial
Platforms
Seamless Integration
Benefits from Aerospace Dynamics
Precision Castparts will provide fasteners, forgings
and castings to ADI, which currently sources these
products externally, driving capacity optimization and
cost reduction.
ADI has significant presence on next-generation
aircraft, such as the Airbus A350, which will add to
Precision Castparts’ current diminutive US$3m of
shipset content on the program.
ADI is a single-location operation in close proximity
to several of Precision Castparts’ plants in Southern
California, allowing for simple integration post
acquisition.
Deal Rationale

Alliant Techsystems Inc. Merges
with Orbital Sciences Corp.
Transaction Summary
On April 28, 2014, the Board of Directors of
Alliant Techsystems Inc. (NYSE:ATK) (ATK)
approved the spinoff of ATK’s Sporting
Group and the immediate merger of ATK’s
Aerospace and Defense Groups with Orbital
Sciences Corp. (NYSE:ORB) (Orbital). ATK
shareholders will own 100% of the tax-free
spinoff of ATK’s Sporting Group. The new
aerospace and defense company formed
through the merger of equals will be owned
by both ATK’s (53.8%) and Orbital’s (46.2%)
shareholders. Both parties have certain
termination rights requiring the terminating
party to pay a termination fee of US$10
million and reimburse expenses up to
US$10 million. Pending customary closing
conditions and regulatory approvals, the
transaction is expected to close before the
end of the calendar year.
Orbital ATK (NYSE:OA) Overview
The newly-formed Orbital ATK, Inc.
(NYSE:OA), headquartered in Dulles, Vir-
ginia, will be an industry leader, utilizing its
advanced capabilities and continual innova-
tion in an effort to support the ever-evolving
aerospace and defense markets. The
company will employ 4,300 engineers and
scientists, 7,400 manufacturing and operat-
ing specialists and 1,400 management and
administration personnel in facilities span-
ning 17 states and amassing over 19 million
square feet. The leadership of Orbital ATK
will consist of nine directors from Orbital and
seven directors from ATK, with other remain-
ing executive positions equitably and evenly
selected from both companies. Orbital ATK
will focus on growing and strengthening its
position in the launch vehicle & propulsion
systems, satellite & advanced systems,
missile & defense electronics, armament
systems & ammunition and aero structure &
components segments, representing 25%,
22%, 18%, 22% and 13%, respectively, of
revenue going forward.
Orbital ATK Key Figures
Headquarters Dulles, VA, USA
Employees 13
Revenue1
~US$4.5b
EBITDA1
~US$585m
Cash2
~US$300m
Shares Outstanding2
~US$60.5m
Deal Term Summary
Total Deal Value3
US$6,400m
Revenue Multiple3
1.4x
EBITDA Multiple3
11.1x
Acquirer Financing: 100% Cash
Orbital ATK’s Management
Ron Fogleman (ATK)
Board
Chairman
Dave Thompson (ORB)
President and
CEO
Blake Larsen (ATK) COO
Garrett Pierce (ORB) CFO
1
Consolidated Income Statement for 2013
2
Expected Balance Sheet at close
3
Represents combined value
25 22 22 18 13
13%
18%
22%
22%
25%
Launch Vehicles & Propulsion
Systems
Satellites & Advanced
Systems
Armament System &
Ammunition
Missile System & Defense
Electronics
Aerostructures & Components
U.S.
Governmen
t
Internation
al &
Commercia
l
73 27
27%
73%
US Government
International & Commercial
Consolidated 2013 Revenue Consolidated 2013 Sales Breakdown
Sales by Customer
42%
58%
Aerospace
Defense
Sales by Segment

Commentary
David W. Thompson commented: “This
merger-of-equals combination of Orbital
and ATK Aerospace and Defense brings to-
gether two of the space and defense indus-
try’s most innovative developers and cost-
efficient manufacturers, who have worked
closely together for over 25 years. By build-
ing on complementary technologies, prod-
ucts and know-how and highly-compatible
cultures, the new Orbital ATK will deliver
even more affordable space, defense and
aviation systems to our existing custom-
ers and be strongly positioned to expand
into adjacent areas.” ATK CEO Mark W.
DeYoung said: “We are both focused on en-
hancing the capability of existing customer
systems by developing solutions that can be
more flexibly deployed to support their mis-
sion with enhanced cost-effectiveness. We
also see significant opportunities for growth
as new programs are initiated or begin to
ramp up production.”
Strategic Rationale
Revenue Synergies
Cost Synergies
Organizational
Integration
Benefits from the Merger
The merged company expects to generate between
US$100m-US$200m in revenue synergies through
improved product offerings and strengthened
customer relationships.
Expected pre-tax cost synergies of US$70m-
US$100m through vertical and supply chain
integration, work center re-balancing and SG&A
reductions to be fully realized by 2016.
Similar cultural values and methodologies,
along with deep relationships at all levels,
should provide a seamless organizational
integration.
Deal Rationale

Cobham plc Acquires Aeroflex
Holding Corp.
Transaction Summary
On May 19, 2014, Cobham plc (Cobham)
entered into a definitive agreement to ac-
quire Aeroflex Holding Corp. (Aeroflex) with
shareholders receiving US$10.5 per share in
cash. Cobham paid US$920 million to share-
holders and assumed Aeroflex’s US$540 mil-
lion in liabilities. To help finance the transac-
tion, Cobham agreed to a US$1,300 million
senior unsecured bridge loan facility from
Bank of America, Merrill Lynch International
Limited and The Royal Bank of Scotland.
Cobham plans to integrate Aeroflex into its
existing Advanced Electronic Solutions and
Communications & Connectivity divisions.
The combined entity will generate annual
cost synergies of approximately US$85 mil-
lion stemming from complementary capabili-
ties, characteristics and customers. Cobham
expects the transaction to be accretive to
earnings beginning in year 2015. Cobham
completed the acquisition of Aeroflex on
September 12, 2014.
Aeroflex Holding Corp. Overview
Since its inception in 1937, Aeroflex has been
a global leader in providing radio frequency
components, microwave integrated circuits,
components and systems used in a variety
of industries, including commercial space
and avionics, commercial wireless commu-
nications, medical, defense and energy. In
2013, the US and Europe accounted for 75%
of Aeroflex’s total revenue. During the same
period, 70% of revenue originated from the
higher-growth commercial segments, with no
single customer accounting for more than six
percent of total revenue. The Company cur-
rently employs 2,600 employees, including
650 engineers, across 20 facilities located
around the world. Aeroflex operates through
two main divisions: Aeroflex Microelectronic
Solutions and Aeroflex Test Solutions. Micro-
electronic Solutions offers an array of micro-
electronics and specialty products through
11 facilities and 1,600 employees, amassing
US$361 million in sales for 2013. Test Solu-
tions has 1,100 employees and occupies two
primary facilities located in Wichita, Kansas,
and Stevenage, United Kingdom. The divi-
sion produces specialized test and measure-
ment products, which contributed $286 mil-
lion in sales in 2013 (43% of total revenue).
Aeroflex Key Figures
Headquarters Plainview, NY, USA
Employees 2,6
Revenue1
US$639,9m
EBITDA1
US$122.5m
Cash2
US$47.5m
Deal Term Summary
Total Deal Value US$1,460m
Revenue Multiple1
2.3x
EBITDA Multiple1
11.9x
Aeroflex’s Management
Leonard Borow CEO
John Adamovich, Jr. CFO
1
LTM as of March 31, 2014
2
Expected Balance Sheet at close
$0
$60
$120
$180
$240
$300
$0
$200
$400
$600
$800
$1,000
2009 2010 2011 2012 2013
$647.1$673.0
$729.4
$655.1
$599.3
$129.7$131.5
$183.7
$166.1
$145.3$145.3
$166.1
$183.7
$131.5 $129.7
Adjusted EBITDARevenue
Revenue(US$)
AdjustedEBITDA(US$)
Key Aeroflex Customers
Aeroflex Historical Revenue & EBITDA (Adj.)

Commentary
Cobham’s Chief Executive Officer, Bob
Murphy, commented: “The acquisition of
Aeroflex is absolutely aligned with our stra-
tegic objective to obtain more exposure to
growing, commercially-oriented end mar-
kets that increasingly demand more data,
connectivity and bandwidth. The scale and
complementary nature of the combination
enables our two technology businesses
to unlock significant synergy benefits to
generate increased shareholder value,
while supporting our customers even more
effectively. Bringing these two companies
together further underpins our objective to
deliver sustainable organic growth.”
Strategic Rationale
Strategic Fit
High-Quality Asset
Return on Capital
Both companies have similar styles of competition.
Aeroflex’s exposure to growing commercially-driven
end markets would have a significant impact on
Cobham’s portfolio.
With over 70 years of developing its core
capabilities within the connectivity sector, Aeroflex
has positioned itself as a primary supplier to an
enduring customer base.
Within three years, the transaction will achieve
a return that is greater than its cost of capital,
assuming a 9% post-tax weighted-average cost
of capital.
U.S.
Governmen
t
Internation
al &
Commercia
l
59 41
41%
59%
Defense
Commercial
2013 Cobham Pro Forma
Sales Breakdown
End Market
33% 67%
Connectivity
Other
Connectivity
Deal Rationale

Engility to Acquire TASC from
KKR and General Atlantic
Transaction Summary
On October 28, 2014, Engility Holdings, Inc.
(NYSE:EGL) (Engility) announced they have
entered into a definitive agreement to ac-
quire TASC, Inc. (TASC) from private invest-
ment firms KKR and General Atlantic in an
all-stock transaction valued at approximately
US$1.1 billion, including the assumption of
net debt and the net present value of tax as-
sets. TASC stockholders (i.e., KKR and Gen-
eral Atlantic) will receive about 18.9 million
shares of Engility, representing approximate-
ly a 51% ownership stake in the combined
company on a pro forma, fully-diluted basis.
Engility stockholders will receive a special
cash dividend of US$11.40 per share, subject
to final adjustments at closing. The transac-
tion is expected to close in the first quarter of
2015. While the acquisition forms a premier
government services provider, the combined
company will continue to serve customers un-
der the Engility and TASC brands due to the
strong name recognition in their respective
markets. TASC CEO John Hynes will become
the COO of the combined company.
TASC Overview
Since its foundation in 1966, TASC has be-
come a leading provider of high-end mission-
critical systems and specialized services for
the intelligence community, US Department
of Defense and US civilian and government
agencies. In 2009, due to tightening conflict-
of-interest rules for defense contractors,
Northrop Grumman sold TASC to KKR and
General Atlantic for $1.7 billion. With over
100 locations in the US and allied coun-
tries, TASC employs approximately 4,000
professionals, of which over 80% hold secu-
rity clearances and 58% have top-secret or
sensitive compartmented information (SCI)
clearance. The company offers cybersecuri-
ty, data analytics, enterprise transformation,
intelligence missions and operations, ISR
and systems engineering and integration,
and principally serves the areas of aviation,
countering weapons of mass destruction,
geospatial intelligence, mobile applications,
public safety and space. TASC has a particu-
larly strong presence in the intelligence mar-
ket, from which it derives 61% of its revenue.
Estimates for 2014 revenue and adjusted
EBITDA are US$1.1 billion and US$90 mil-
lion, respectively.
TASC Key Figures
Headquarters Chantilly, VA, USA
Employees ~4,000
Revenue1
US$1,100m
Adj. EBITDA1
US$90m
Net Debt2
US$613m
Funded Backlog3
US$385m
Deal Term Summary
Total Deal Value US$1,100m
Revenue Multiple 1.0x
EBITDA Multiple4
7.9x
TASC Services
• Cyber Offerings
• Enterprise Transformation
• Integrated ISR
• Data Analytics
• Intelligence Missions and Operations
• System Engineering and Integration
TASC’s Management
John Hynes CEO
Wayne Rehberger CFO
1
Estimate for CY2014
2
Includes net present value of tax assets
1
As of 09/30/2014
4
After adjusting for ~US$370m in net present value of acquired tax assets
Key TASC Customers
11%
28%
61%
Intelligence
Defense
Civil
12%
88%
Prime Contracts
Subcontracts
TASC End Markets TASC Contract Mix
Source: Press releases, company websites, company presentations
CIA DIA FAA Homeland
Security

Commentary
Engility’s CEO, Tony Smeraglinolo, com-
mented, “We expect this transaction to
accelerate our growth strategy of broad-
ening our capabilities, diversifying our
customer base, adding substantial scale to
our business and increasing our address-
able market. TASC enhances Engility’s
existing broad service offerings by adding
capabilities in intelligence analysis, space
systems architect analysis, cybersecurity,
ISR operations, etc. Together, we expect to
offer customers an even more comprehen-
sive suite of high-quality offerings to meet
their evolving missions and affordability
requirements.”
Strategic Rationale
Customer and End Market
Diversification
Creates Substantial
Revenue Opportunities
Cost Savings and Tax
Attributes Significantly
Increase Cash Flow
• Highly-complementary customer footprints and
limited contract overlap.
• Engility’s stand-alone customer mix includes 64%
defense, 35% federal/civil and 1% intelligence;
pro forma, the combined entity has a diversified
mix of 48%, 24% and 28%, respectively.
• Bringing Engility’s cost-effective model to TASC’s
target markets creates the potential to improve
recompete and new-bid win rates.
• Acquiring TASC also provides numerous new
offerings to Engility’s services portfolio, as well as
enhancing current capabilities.
• With improved scale, US$35m in cost synergies
are expected to be realized by year end 2016,
with a run rate of US$50m by 2018.
• Additionally, TASC has ~US$1.4b of tax
attributes, allowing for utilization of tax assets for
the maximum annual tax shield.
Deal Rationale

5Highlighted Platforms
Select Narrow-Body Jet Airliner Competitors Specifications
Platform Wingspan Length Range Seat Count Unit Cost (US$m)
Boeing 737
MAX 7
117’ 10” 110’ 5” 3,800nm 126-140 $85
Airbus
A319neo
117’ 5” 111’ 0” 4,200nm 124-156 $94
Embraer
E-195-E2
110’7” 136’ 2” 2,200nm 118-144 $60
Bombardier CSeries
Description
The CSeries is a new family of single-aisle,
twin-jet aircraft currently under development
and in production by Bombardier. The pro-
gram launched in 2008 and competes in the
100- to 149-seat aircraft market against oth-
er narrow-body, medium-range jet airliners,
including the Boeing 737, Airbus A320 and
Embraer 195. Bombardier aims to compete
by delivering wide-body comfort, including
high overhead bin-per-passenger capac-
ity and upsized windows, seats and aisles,
while simultaneously offering economic ad-
vantages, such as reduced cash operating
cost and fuel burn. The company projects
the CSeries will have a lighter airframe,
15% cash operating cost and 20% fuel burn
advantage compared with its Boeing and
Airbus counterpart programs.
Two models are currently available for order:
the CS100 and the larger CS300, designed
for lower- and higher-density operations,
respectively. The CS100 is currently in early
production and test phases with expected
entry-into-service by the second half of
2015. Three CS100 prototypes have flown to
date, including its maiden flight in September
2013. The CS300, still under development,
is expected to follow with entry-into-service
approximately six months after the CS100.
Features
Advanced Structural Materials
• Aluminum fuselage
• Advanced composite empennage, rear
fuselage, nacelles and wings
Advanced Flight Deck and Avionics
• Large LCD displays and dual flight
management system with RNP0.1
capability
• Dual Cursor Control Devices, datalink
with full format printer, CAT IIIa
autoland and fly-by-wire with sidestick
controls
• Optional electronic flight bag, CAT IIIb
capability and head-up display
Pratt & Whitney PurePower®
PW1500G Engine
• World’s highest bypass ratio certified
turbofan
• Double-digit fuel burn reduction,
50% noise reduction and reduced
emissions
Economic Advantages
• 15% cash operating cost advantage
• 20% fuel burn advantage
• Over 25% direct maintenance cost
advantage
Environmental Advantages
• 20% CO2
emissions advantage over
average
• 50% less NOx emissions
• 255 EPNdB; 4x smaller noise footprint
Interior Flexibility and Comfort
• Upsized storage, windows and seats
• New Lavatories for Persons with
Reduced Mobility
Source: Airbus, Boeing, Bombardier, Embraer
Bombardier CSeries Specifications
Platform Wingspan Length Range Seat Count Unit Cost (US$m)
CS100 115’ 1” 114’ 9” 2,950nm 108-125 $62
CS300 115’ 1” 127’ 0” 2,950nm 130-160 $71

Recent Developments
In February, Bombardier announced a re-
vised expenditure estimate for the CSeries
program from the original assessment of
US$3.4 billion to US$4.4 billion, as a result
of an extra US$750 million in tooling and
development costs and US$300 million in
interest and borrowing. The news trailed the
announcements in January, revealing six-
to nine-month delays for entry-into-service
for both the CS100 and CS300, as well as
a 1,700 employee layoff in the Bombardier
aerospace division. The announced delay
marked the fourth time the program has
encountered postponement. In March, the
company froze salaries of approximately
38,000 non-unionized employees in efforts
to achieve profit margin targets in the face of
costly delays.
Increasing costs, layoffs, delays and slow
orders have hindered the program, but it
remains an integral part of Bombardier’s
growth plan, as the company anticipates
sales from the CSeries jets will nearly dou-
ble annual company revenue by 2020. The
company is targeting 300 firm orders with
20 to 30 customers by entry-into-service
and claimed a total of 182 orders with 17
customers by the end of 2013. In February
2014, Bombardier announced firm orders
totaling 201 and remained confident it will
hit its target number by delivery date.
Republi 0 40 40 4
Ilyushin
Financ
0 32 32 3
Lufthan
sa
30 0 30
LCI 3 17 20 1
Other 30 49 79 4
0
10
20
30
40
50
60
70
80
79
20
3032
40
49
17
32
40
30
3
30
NumberofAircraftOrdered
CS100 CS300
Republic
Airways
Ilyushin
Finance Co.
Lufthansa LCI Other
2008
2013
2014 US$4.4b
US$3.9b
US$3.4b
0
10
20
30
40
50
60
0
40
80
120
160
200
2009 2010 2011 2012 2013
182
148
133
90
50
AnnualOrders
CumulativeOrders
CSeries Orders
Increasing Program Costs
Stagnant CSeries Orders

Terminal High Altitude Area
Defense (THAAD)
Description
The shortcomings of the PAC-2 missile,
as an anti-ballistic missile system, created
a need for a new system and resulted in
the creation of the Terminal High Altitude
Area Defense (THAAD) missile program.
The THAAD program is a highly-mobile
and deployable anti-ballistic missile system
capable of intercepting ballistic missiles in-
side or outside the atmosphere during the
terminal phase of flight. The system utilizes
hit-to-kill technology in the form of kinetic
energy to eliminate incoming threats and
remaining debris. The ability to accept in-
formation from other external sources, such
as Aegis and satellites, and to coordinate
with other missile systems increases the
coverage area, providing augmented levels
of effectiveness. The U.S. Army operates
the THAAD system, the Missile Defense
Agency manages the system and Lockheed
Martin acts as the prime contractor and sys-
tem integrator.
Components
Airframe: Single-stage unit utilizing a nose-
mounted infrared (IR) seeker and a solid-
fuel motor. The shroud assembly protects
the IR seeker during flight and separates
once outside the atmosphere. As a hit-to-kill
vehicle, THAAD does not carry nor employ
a warhead.
Launch System: Missiles are housed in
canisters mounted on the rear of a Oshkosh
M1120 HEMTT 10-ton truck. Each truck car-
ries the payload capacity of eight THAAD
missile rounds.
Electronics - Guidance: Initially, an inertial
measurement unit and an integrated avion-
ics processor provides flight control for the
missile. The combined systems provide
missile guidance, navigation, control, data
communication, event sequencing and pro-
cessing functions. Once the shroud assem-
bly disengages, THAAD uses an infrared
sensor for terminal homing.
Specifications
Length 19 ft. (5.8 m)
Max Altitude 95 mi (150 km)
Max Range 125 mi (200 km)
Max Speed 1.7 mi/s (2.8 km/s)
Target Intercept
Range
120 mi (195 km)
Target Intercept
Altitude
90 mi (145 km)
Kill Mechanism Kinetic Kill Vehicle
Timeline of Development
2000 Contract awarded to Lockheed
Martin
2006 First and second batteries
awarded
2008 First battery activation
2009 Second battery activation
2011 Third and fourth batteries
awarded
2011 First interceptor delivery
2011 First Foreign Military Sale
(FMS)
2012 50th
interceptor delivered
2012 Third battery activation
$0
$100
$200
$300
$400
$500
$600
2014 2015 2016 2017 2018 2019 2020 2021 2022
$470$470$470$470$470$464
$490
$447
$566
Budget(US$m)
R&DProcurement
Budget

Electronics - Fire Control: In the initial
stage, external sources, such as satellites,
provide target cueing for the THAAD mis-
sile system. The system then uses internal
processes to track, identify and assess the
proper impact point and kill approach. If the
initial engagement is unsuccessful, THAAD
is designed to allow a second attempt.
Propulsion System: In the initial stage,
the missile employs an Aerojet single-stage
solid-fuel rocket motor and thrust vector
controls for propulsion and maneuvering.
During the terminal phase and separation of
shroud assembly, divert-and-attitude-con-
trol-system (DACS) maneuvers the kill ve-
hicle. DACS utilizes four divert thrusters to
steer the missile to the point of interception.
THAAD Outlook
After years of development and testing, the
THAAD program heads towards full procure-
ment. With THAAD’s unique skillset and
capabilities, THAAD Vice President and Pro-
gram Manager at Lockheed Martin, Mathew
Joyce, continues “to see strong interest from
around the globe.” In December 2013, Lock-
heed Martin received an award for a US$3.9
billion production contract. The contract will
produce 110 interceptors for the U.S. Army,
along with interceptors and ground hardware
for the UAE. In June 2014, the South Korean
military began analyzing THAAD and its ben-
efits in response to heightened tension within
the region. The THAAD missile defense sys-
tem could play a key role in improving South
Korea’s missile defense program and help
alleviate concerns before the US transitions
command of the country’s wartime defense
to South Korea.
Interceptor Production Forecast
User 2014 2015 2016 2017 2018 2019 2020 2021
U.S. Army 27 42 36 36 36 36 36 36
Foreign 0 0 25 25 25 25 25 25
Total 27 42 61 61 61 61 61 61
Source: Market Research

Northrop Grumman Global Hawk
Description
The Global Hawk is a high-altitude, long-
endurance unmanned aerial vehicle (UAV)
with intelligence, surveillance and reconnais-
sance (ISR) capabilities. Primarily used by
the U.S. Air Force and Navy for a variety of
operations, including peacekeeping missions
and full-scale combat, the Global Hawk is de-
signed to provide military commanders with
near real-time ISR and detection of moving
targets over a large geographical area for
battle management, targeting and situational
awareness. With Northrop Grumman as the
prime contractor, the platform entered devel-
opment and limited production in 2001 with
the RQ-4A model. In 2011, the RQ-4A was
retired as the next generation RQ-4B was
developed, featuring enhanced open-system
architecture, increased AC power for sen-
sors, longer wingspan and fuselage, larger
payload capacity, improved fuel capacity and
increased gross takeoff weight. The RQ-4B
is produced in three configurations: Block 20,
30 and 40.
Global Hawk’s Battle With the U-2
The U-2 is a one-manned, ultra-high-
altitude reconnaissance aircraft manufac-
tured by Lockheed Martin and primarily
operated by the U.S. Air Force and the Cen-
tral Intelligence Agency. Although it is over
50 years old, the aircraft has been upgraded
with key sensors, including electro-optical/
infrared cameras, radar and signals intel-
ligence antennas in the past 15 years, pro-
viding an alternative to the Global Hawk for
high-altitude ISR missions. While the Global
Hawk possesses greater endurance and
range, the U-2 has greater payload capac-
ity and can reach higher altitudes, enabling
more slant range for sensors. The U-2 has
additional capabilities, such as anti-icing
and defensive systems, not found on the
Global Hawk.
Global Hawk Supply Chain
Supplier
System/
Subassembly
Aurora Flight
Sciences
Graphite
Composite
Empennage
Curtiss Wright Flight Control
Computer
GE Aviation 25 KVA Generator
and Flight Control
Actuators
Goodrich Electrical Braking
System
Héroux-Devtek Landing Gear
Honeywell Environmental
Control System
L-3
Communications
Integrated
Communications
System
Parker Hannifin Fuel Subsystem
Components
Raytheon Integrated Sensor
Suite
Rolls-Royce AE3007H
Turbofan Engine
Sierra Nevada
Corp.
GPS and SCAT-1
Receiver
Triumph Group Graphite
Composite Wing
35% 65%
59%
41%
R&D
Procurement
Program Summary
US$9,874m
Total Program Cost to Date
US$489m
Funding Needed to Complete
45 Total Units
US$219.4m Per Unit
PrimeFunding
Overview(1)
Qty.(1)
1
As of August 2013
Source: U.S. Government Accountability Office, Northrop Grumman, Lockheed Martin, Market Research

The tightening defense budget forced the
U.S. military to choose between the U-2 and
Global Hawk as the primary high-altitude
ISR program, resulting in a seesaw of events
over the past few years. In 2012, the U.S. Air
Force intended to terminate the Global Hawk;
however, on March 4, 2014, it reversed its
position in its FY2015 budget proposal, call-
ing for procurement of Block 30s and retire-
ment of the entire U-2 fleet. The reversal is
primarily attributable to the program reduc-
ing the Global Hawk’s cost per flying hour
(CPFH) to US$24,000, 25% less than the
U-2’s CPFH. The Global Hawk also benefit-
ted from support from Congress, in part due
to aggressive lobbying by Northrop Grum-
man on Capitol Hill. The U.S. Air Force plans
to develop and install U-2 sensors (e.g., the
SYERS-2A camera) and other equipment on
the Global Hawk, as the platform still lacks
numerous U-2 capabilities.
Recent Developments
On September 15, 2014, the U.S. Air Force
announced it was awarding Northrop Grum-
man a US$354 million firm fixed-price con-
tract for three Global Hawk Block 30s. The
UAVs are scheduled to be delivered in 2017
and will expand the U.S. Air Force’s Global
Hawk fleet to a total of 37 aircraft, 21 of
which will be Block 30 configurations. The
contract also includes the retrofit of two ex-
isting U.S. Air Force Block 30s with airborne
signals intelligence payload (ASIP) sensors
to support advanced ISR data collections.
The ASIP retrofit kits are scheduled for de-
livery in late 2016 and 2017. In March 2014,
South Korea announced plans to purchase
four Global Hawks through the U.S. Foreign
Military Sales program for approximately
US$815 million, with the first delivery due by
2018. According to Mick Jaggers, Northrop
Grumman’s Global Hawk program manager,
the prime intends to develop a single model
of the UAV with a universal payload adapter,
capable of carrying a variety of sensors.
A single-configuration fleet with modular
capability will enable the Global Hawk to
perform diverse missions requiring varying
sensor systems.
Global Hawk and U-2 Specifications
Platform Wingspan Length
Gross
Takeoff
Weight
Payload
Maximum
Altitude
Ferry
Range
Maximum
Endur-
ance
Defense
System
Global Hawk Block
20/30/40
131 ft 48 ft 32,250 lbs 3,000 lbs >60,000 ft 12,300 nm 36 hours No
U-2S 103 ft 63 ft 40,000 lbs 5,000 lbs 70,000 ft >7,000 nm 12 hours Yes
Source: Northrop Grumman, Lockheed Martin
Global Hawk and U-2 Budget Battle:
Timeline of Events
Jan
2012
U.S. Air Force submits
proposal to cancel Block
30 procurement and retire
current Global Hawk
fleet due to high cost and
inadequate performance.
Sep
2012
Congress withdraws
US$544m appropriated for
Block 30 in prior years but
maintains US$260m budget
for FY2013 to continue
Block 30 operations.
Feb
2013
U.S. Air Force contemplates
proposing termination of
Block 40.
Sep
2013
Congress terminates
procurement of Block 30s in
FY2014 budget.
Mar
2014
U.S. Air Force requests for
procurement of Block 30s,
retirement of U-2 fleet and
investment funds to ensure
Block 30 viability beyond
2023 and for Block 40
development.

Airbus A320neo
Description
The A320neo (new engine option) is the lat-
est of many product upgrades to the A320
Family of aircraft, which remains under
development by Airbus. The upgrades of-
fer greater fuel efficiency to the company’s
single-aisle aircraft and replace the A320ceo
(current engine option). As of today, Airbus
offers the efficiency improvement package
for the A319, A320 and A321 models of the
A320 Family. Incorporating both Sharklet
wingtip devices and new more fuel-efficient
engines, the A320neo offers significant ben-
efits compared to today’s A320ceo, includ-
ing reduced fuel burn, significantly reduced
noise and lower operating costs.
Airbus currently offers the Pratt & Whitney’s
PW 1000G Family and CFM International’s
LEAP-X, high-bypass turbofan engines as
the new engines available for customers to
order.
The A320neo has won over 3,250 firm or-
ders from 63 customers since its launch in
December 2010. Entry into service will start
in Q4 2015 with the A320neo, to be followed
by the A321neo and the A319neo.
Features
Two Engine Options
• Pratt & Whitney PW1000G family
• CFM International LEAP-X
Pratt & Whitney PW 1000G
• High-bypass geared turbofan engine
• Exclusive engine for Bombardier
CSeries, MRJ airliners and Irkut
MS-21
CFM International LEAP-X
• High-bypass turbofan engine
• Currently under development by CFM
International, a 50-50 joint venture
between GE Aviation of the U.S. and
Snecma of France
Environmental Improvements
• 20% fuel burn advantage
• NOx
emissions 50% below CAEP/6
• Aircraft noise up to 15dB below
Chapter 4
Environmental Advantages
• 14% lower cash operating costs
• 20% annual fuel savings
• 255 EPNdB; 4x smaller noise footprint
Competitive Edge
• 8% lower fuel burn per seat and 12%
per trip compared to the Boeing 737
MAX8
• A319neo has lower fuel burn per
seat than the CS300 and with
a high reliability and maturity at
entry-into-service
Airbus A320neo Family Specifications
Platform Wingspan Length Range Seat Count
Unit Cost
(US$m)
A319neo 117’ 5” 111’ 0” 3,700nm 124-156 $94
A320neo 117’ 5” 123’ 3” 3,300nm 150-180 $103
A321neo 117’ 5” 146’ 0” 3,200nm 185-236 $121
Select Narrow-Body Aircraft Competitor Specifications
Platform Wingspan Length Range Seat Count
Unit Cost
(US$m)
Boeing 737
MAX 7
117’ 10” 110’ 5” 3,800nm 126-140 $85
Bombardier
CS100
115’ 1” 114’ 9” 2,950nm 108-125 $62
Embraer
E-195-E2
110’ 7” 136’ 2” 2,200nm 118-144 $60
Source: Airbus, Boeing, Bombardier, Embraer

Recent Developments
India-based airline IndiGo, a leading buyer
of the A320neo, recently agreed in October
to buy a record 250 A320neo aircraft to
strengthen its fleet and better target India’s
high-growth market. The milestone repre-
sents A320neo’s success relative to the
competition. The 737 Max, Boeing’s rival up-
grade package, received just over 2,500 or-
ders to date, well shy of the more than 3,250
orders that the A320neo received since
its inception. Multiple sources indicate the
A320neo boasts approximately 60% market
share against its re-engined counterpart.
An early update to the A320neo Family is the
introduction of the longer-range A321neo,
which will increase the aircraft’s range to
approximately 4,000 nautical miles from the
3,650 miles offered by the initial version of
the plane. Airbus plans to position the plane
as a replacement for the aging fleet of Boe-
ing’s 757 jetliners. An updated form of the
A321neo is currently under development by
Airbus, with the expectation of securing or-
ders for the aircraft in the near future.
AerCap 175 25 200 25
Air Asia 291 291
Air
Lease
31 79 110 79
Americ
an
100 100 100
EasyJe
t
100 100
IndiGo 160 20 180 20
Lion Air 109 65 174 65
Lufthan
sa
60 40 100 40
Norweg
ian
100 100
SMBC 110 110
0
100
200
300
AerCap/ILFC
AirAsia
AirLeaseCorporation
AmericanAirlines
EasyJet
IndiGo
LionAir
Lufthansa
Norwegian
SMBC
110
100100
174180
100100
110
291
200
40
65
20
100
79
25
110100
60
109
160
100
31
291
175
NumberofAircraftOrdered
A321A320
A319neo
A320neo
A321neo 734
2,579
49
Orders from Top Customers
Orders by Platform
Source: Airbus

6About M&A International Inc.
Stephen Perry
Head of M&A International Inc.’s
Aerospace & Defense Group
stephen.perry@mergers.net
M&A International Inc.’s M&A teams actively
represent buyers and sellers in the aero-
space & defense industry as well as those
seeking to raise private equity and debt capi-
tal. We possess significant sector expertise,
industry relationships and experience in suc-
cessfully executing complex transactions on
behalf of our clients.
www.mergers.net
This report was prepared by Janes Capital
Partners, one of our Aerospace & Defense
specialist firms.

7Representative Transactions
Recent Transactions Closed by M&A International Inc.’s Specialists

8Main M&A International Inc.
Aerospace & Defense Specialists
Country Contact Email
Africa
South Africa (Johannesburg) Yaron Zimbler yaron.zimbler@mergers.net
Asia
Japan (Tokyo) Taro Okayama taro.okayama@mergers.net
Europe/MENA
Finland (Helsinki) Claes von Heiroth claes.vonheiroth@mergers.net
France (Paris) Raphael Petit raphael.petit@mergers.net
Germany (Stuttgart) Michael Thiele michael.thiele@mergers.net
Italy (Milan) Michele Manetti michele.manetti@mergers.net
Italy (Turin) Davide Eugenio Milano davideeugenio.milano@mergers.net
Switzerland (Berne) Juraj Janos juraj.janos@mergers.net
United Kingdom (London) Brian Livingston brian.livingston@mergers.net
United Kingdom (London) Philip Barker philip.barker@mergers.net
North America
Mexico (Mexico City) Alejandro Rocha alejandro.rocha@mergers.net
United States (Cleveland) Mark Filippell mark.filippell@mergers.net
United States (Irvine) Stephen Perry stephen.perry@mergers.net
United States (Seattle) Scott Hardman scott.hardman@mergers.net
South America
Chile (Santiago) Carlos Fuenzalida carlos.fuenzalida@mergers.net
Costa Rica (San José) Guillermo Perez guillermo.perez@mergers.net

Established in 1985, M&A International Inc. (www.mergers.net) offers the
unparalleled, global resources of over 650 M&A professionals operating
in every major financial center of the world. Our specialist teams cover
every industry sector and advise clients on acquisitions, divestitures and
financing. We have closed over 1,400 transactions totaling more than
US$75 billion in transaction value in the past five years.
Founders of the M&A Mid-Market Forum (www.midmarketforum.com).
M&A International Inc. disclaimer
This report is provided for information purposes only. M&A International
Inc. and its members make no guarantee, representation or warranty of any
kind regarding the timeliness, accuracy or completeness of its content. This
report is not intended to convey investment advice or solicit investments
of any kind whatsoever. No investment decisions should be taken based
on the contents and views expressed herein. M&A International Inc. and
its members shall not be responsible for any loss sustained by any person
who relies on this publication.
© March 2015 M&A International Inc. All rights reserved. M&A International
Inc. refers to the alliance of member firms of M&A International Inc., each
of which is a separate and independent legal entity.

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