M&A activity snapshot
Aerospace and defense manufacturing is one of the few industrial categories where deal volume and pricing both rose through a weak broader market. Capstone Partners reports A&D deal count rose 10.3% in 2025, with disclosed enterprise value up 73.1%. The pace held into 2026, with Q1 2026 A&D M&A volume up 37% year over year, totaling $47.1 billion of disclosed enterprise value.
This page covers suppliers of machined, cast, and assembled parts to primes and engine makers. Census classifies aircraft parts makers under NAICS 336413, Other Aircraft Parts and Auxiliary Equipment Manufacturing, which excludes engines and fluid power subassemblies. Capstone notes that fragmentation continued to define the Component Manufacturing segment as buyers sought scale and specialization.
Commercial aerospace alone posted 196 transactions in 2026 year to date, up 15.3%, with add-on activity up 25.8% and platform formations up 94.1%.
Who is buying
Strategics still lead, but sponsors are gaining share. In commercial aerospace, strategics accounted for 63.3% of 2026 year-to-date deals. Engine makers are buying supply security: GE Aerospace agreed in September 2026 to buy Consolidated Precision Products from Warburg Pincus and Berkshire Partners for $11.75 billion.
Public consolidators buy proprietary content. TransDigm agreed to acquire Simmonds Precision Products from RTX for approximately $765 million in cash, a fuel and proximity sensing business.
PE-backed platforms roll up machining and special-process suppliers. Centerbridge-backed Precinmac acquired Precision Aerospace Holdings in April 2026, a platform that had combined five EDM and precision machining shops under one roof. Foreign strategics also bid, subject to the security reviews covered below.
What buyers look for
Buyers pay for position on long-running programs and for proprietary or sole-source parts. In the Simmonds deal, TransDigm stressed that approximately 40% of Simmonds' revenue is derived from the aftermarket and nearly all of its revenue is generated from proprietary products. Build-to-print shops without that content are valued more like general precision machining.
Capacity is the other draw. Capstone's Brad Drake says suppliers with proprietary capabilities, manufacturing capacity, and a proven track record in ramping up volumes will command a premium. Deloitte points to the same constraint, describing constrained casting and forging supply chains that contractors are working around.
Compliance is diligenced as closely as financials. Deloitte notes that A&D contractors still have to manage cyber compliance, classified-environment readiness, quality systems, cost transparency, intellectual property and data rights, among other obligations.
What makes a strong company
The strongest A&D suppliers usually show:
- A CMMC status that matches their contracts. The DFARS CMMC rule took effect November 10, 2025, and it requires primes to flow the correct CMMC level down to subcontractors.
- Current DDTC registration. Under 22 CFR 122.1, one occasion of manufacturing a defense article triggers registration, even with no exports.
- AS9100 certification plus Nadcap accreditation for critical processes, governed by major aerospace, defense, and space subscribers.
- Sole-source or proprietary part numbers on both commercial and defense platforms, with aftermarket revenue.
- Documented controls over export-controlled technical data and drawings.
Valuation and deal structure
Reported A&D multiples are higher than general manufacturing. Capstone reports A&D deals averaged 3.0x EV/Revenue and 11.4x EV/EBITDA in 2025, while Q1 2026 EBITDA multiples contracted to 9.5x. Capstone's set includes defense technology and security deals, so it is a market reference rather than a component-supplier benchmark.
Scarce assets set the top of the range. GE Aerospace values CPP at about 18x 2027 EBITDA including expected net integration benefits, and about 26x without them. That deal is a large, proprietary castings business, not a proxy for a lower-middle-market machine shop.
Structure is shaped by regulation as much as price. Deals involving foreign buyers can require a CFIUS review of the transaction's effect on U.S. national security. For cleared facilities, a contractor under FOCI is ineligible for classified access until mitigation measures satisfy its cognizant security agency. Both can add time and closing conditions.
Outlook
Demand drivers look durable for 12-24 months. The combined Airbus and Boeing backlog has reached about 17,000 aircraft, an estimated 12 years of production, while Boeing delivered 600 aircraft in 2025, 206 below 2018 levels. On defense, the FY2027 President's Budget request proposed spending of $1.5 trillion.
Expect continued add-on buying of qualified machining, casting, and special-process suppliers, plus more carve-outs from primes. Compliance readiness, especially CMMC as the phased rollout continues, will increasingly separate suppliers that clear diligence quickly from those that do not.
Own an aerospace or defense parts business and want a market-data starting point? Run the valuation tool or read the manufacturing M&A overview. See also: how buyers build a targeted M&A list in a niche vertical.