Transformation of M&A in 2025
The Mergers & Acquisitions (M&A) landscape in the commercial aerospace sector underwent significant change in 2025. Aggressive tariffs and a shift toward domestic consolidation altered corporate strategies, while a more flexible approach by the US Federal Trade Commission (FTC) allowed some historic megadeals to proceed.
The year was marked by a ‘K-shaped’ recovery: smaller financial buyers faced liquidity challenges, while well-capitalized strategic buyers moved ahead, resulting in a high-premium environment in early 2026. Notable acquisitions include TransDigm, VSE, and HEICO targets.
Market Trends and Deal Volume
Despite challenges, 2025 saw record-level deal value in general M&A. At the start of the year, corporate strategies shifted from cross-border expansion to domestic consolidation due to tariff pressures. However, changes in FTC leadership encouraged settlements and megadeals, enabling deals previously considered impossible.
In total, 398 aerospace and defense transactions were completed in 2025. While the total deal count fell 14% from 2024, the second half of 2025 showed a clear recovery, particularly in the Aerospace segment, which accounted for roughly 38% of all M&A activity.
The surge was largely driven by the aging fleet problem, prompting airlines and investors to focus on the aftermarket and MRO (Maintenance, Repair, and Overhaul) segments. Companies providing programmatic exposure and aircraft life extension services attracted high premiums.
Shift in Buyer Dynamics
A notable trend in 2025 was the increasing difficulty for financial buyers to exit industrial companies, resulting in trapped capital and limited investment capacity for mid- and small-sized funds.
Strategic buyers, however, capitalized on this gap. With ample cash reserves and a focus on supply chain enhancement, they successfully acquired high-quality commercial aviation targets. Examples include:
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TransDigm Group: Acquired Jet Parts Engineering and Victor Sierra Aviation Holdings (Jan 2026)
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VSE Corporation: Acquired Precision Aviation Group at a 13.5x adjusted EBITDA multiple (Jan 2026)
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HEICO Corporation: Acquired EthosEnergy (Feb 2026)
These acquisitions boosted valuation levels and demonstrated a strategic shift in the sector.
Outlook for 2026
Looking ahead, M&A activity in commercial aviation is expected to remain strong in 2026. Key supporting factors include:
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Predictable tariff regimes
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Continued growth in travel demand
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Robust strategic buyer interest
Alderman & Company reports its M&A backlog is the highest in 25 years, signaling strong deal activity in the months to come. While backlogs do not equate to completed deals, the current pipeline indicates significant growth potential for the US commercial aviation market.
Key Takeaways:
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2025 saw a high-premium M&A market driven by strategic buyers.
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The aftermarket and MRO segments are emerging as investment hotspots.
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Liquidity constraints affected financial buyers, while well-capitalized strategics advanced.
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2026 is projected to continue strong M&A momentum in commercial aviation.
