Major Defense Contractor Grows Through Successful Multi-Billion Dollar Acquisition
Result
Following the successful transformative acquisition, Renaissance has continued to engage with ‘A&DPrime’ client across multiple growth-oriented initiatives as client has continued to align its portfolio organically across the sector.
The early 2020’s witnessed considerable shifts in global geopolitics with an active conflict in Ukraine and the continued emergence of China as a near-peer adversary
Governments in response have been realigning defense priorities to reset procurement and modernization priorities. As a result, aerospace and defense primes have been focused on how to realign business portfolios to respond to new demand signals. While the attraction of the sector is the ability to continue positions on generational programs for decades – a built-in inertia and momentum – this can also be the key constraint to adapting quickly organically. In some cases, muscle-moving adaptation to areas of growth can be accelerated through M&A.
Starting with strategy to build clarity and confidence for M&A rationale
The decision to embark on and execute a transformational acquisition strategy requires substantial alignment of executive management team and Board through setting the context of the market outlook and existing business portfolio. Challenging views and conceptions of operational positioning in the supply chain – for example “is being a Prime or Supplier better in this end market”, “would this enhance our direct and/or end-customer positioning”, and/or “do we have the competencies and resources to be a better home for this business,” creates healthy discourse for triangulation and level-setting through objective, data-based approaches.
Aligning stakeholders to successfully sign a transaction
‘A&DPrime’ hired Renaissance to assist with developing its M&A strategy, evaluate key targets, and ultimately to diligence its major acquisition. Renaissance leveraged its expertise, proprietary market data and forecasts and subject matter experts to build clarity in key sector growth trends and dynamics to underpin the strategy and screening of targets. As target priorities became clear, Renaissance then supported evaluation of a large acquisition target from the outside-in to support client’s understanding of the target, acquisition thesis and valuation. Together with client’s broader advisory bench, Renaissance then supported diligence of the target during a rapid auction process, leveraging substantial pre-process preparation, to build conviction and alignment across clients’ stakeholders toward gaining comfort with and signing the transaction.
