On the defense side, it’s actually an even better picture than on the commercial front; we’re looking at a defense budget in 2025 approaching a trillion dollars, and that’s up from about 875 billion in 2024. The North America RBC defense supplier index is up about 86% year over year. The European defense index is up about 95% and a lot of that is growing, as relates to just the growing presence in NATO membership, increasing their level of defense spending across the board.
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Our first edition was also released during a global financial crisis in Spring 2009, which actually turned out to mark the start of the next decade’s historic bull run. Joshua, the leader of the Israelite tribes after the death of Moses, who conquered Canaan and distributed its lands to the 12 tribes. His story is told in the Old Testament Book of Joshua. Under Joshua’s godly leadership, the Israelites conquered the land of Canaan. Joshua died at the age of 110 and was buried at Timnath Serah in the hill country of Ephraim. At the Jordan River, the waters parted, as they had for Moses at the Red Sea.
July, while we reached a tariff agreement with the EU, which included a 15% premium charge, there was an agreement to essentially give aircraft and related parts a pass on tariffs. And between the U.S. and Canada and the U.S. and Mexico, there’s also been some resolution on that as well. And you’ve certainly seen that in the public trading valuations that that has taken a bit of level of uncertainty out of the market, but you haven’t really seen a lot of cross-border transactions because of some of that uncertainty that that was in the marketplace earlier this year. There have been some we worked on the sale of a company called LMB to Lore. And just to put it in perspective, that was announced in February, and here we are in September.
Investment Banking, (Includes Valuation Models + Online Course), 3rd Edition
A lot of companies talked about end market for market and also being able to address some of the pricing issues related to tariffs. Customers understand the tariff cost dynamics and pricing has been sticking as manufacturers have been addressing that issue. Allison brings over 20 years of experience from Citi, where she held various senior leadership roles spanning technology, operations and transformation. Prior to that role, Allison was Head of Operations and Technology for Latin America, driving key transformation programs on automation / manual process reduction. She had also held global leadership positions including Global Head of Transformation as well as Interim Head of Global Operations.
- July, while we reached a tariff agreement with the EU, which included a 15% premium charge, there was an agreement to essentially give aircraft and related parts a pass on tariffs.
- And I think that shadow, I won’t say it’s completely gone, but it’s a lot it’s a lot narrower, it’s a lot paler.
- So as that market grows, and there’s just more third party capital coming into this into that sector, you’re seeing a lot of M&A and a lot of consolidation.
- He also spent seven years with Macquarie in New York with a focus on building the firm’s private equity buy-side and infrastructure businesses.
- I’d say tariffs was another persistent issue that came up.
We talked about it last year, there being a pent up demand for deals, both in terms of new transactions and in terms of exiting from existing deals. And that’s continued to be the theme, I would say, if I look at it, you know, there was an abnormal amount of private equity exit activity from the second half of ‘20 into all of ‘21 those 18 months were the most we’ve seen in a long period in history, I believe. We’ve seen some decent activity in terms of new entries. And so there’s starting to be somewhat of a constructive LBO market, although I would say we’ve seen green shoots, and we’ve been participants in it, but it’s also early days.
Creativity is key to unlocking private equity deals
Although the pandemic has created a lot of disruption and uncertainty around M&A and future market conditions, I don’t believe that it will change the fundamentals that we cover in the third edition.
- And there’s, frankly, not that not that many interesting take-privates at this point.
- With regards to deal making appetite and activity, we have a pretty interesting environment.
- He is co-chair of his Harvard class and has served on the board of a number of public companies and philanthropic institutions, including the US board of Upper Canada College and the board of trustees of Horace Mann School in New York.
- We are still a bit cautious on public corporate transactions that involve some antitrust scrutiny, just because I don’t think we’ve seen many transactions, large transactions that have happened that have gone through that process unscathed.
- He advised on the restructurings of WorldCom and Nortel, two of the largest done to date.
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Some things certainly related to destocking and your higher rates, crimping spending expenditures a little bit. Where there are diversified capital goods businesses that play on data centers, water, electrification, technology infrastructure, there’s clearly a lot of demand and a lot of interest, and we’ve seen that, you know, for the public corporates, as well as from private equity. And I combined that with, you know, building and construction, which, if this easing cycle holds, combined with strong employment rates. I think in terms of rates and inflation, people are directionally getting comfort with where we’re going. So I’m not saying that’s completely off the table, but there’s confidence management teams in the field board level that we know where that’s going. They’re actually knowing always that there could be two steps forward, one step back.
I mean, the other piece we always talk about Josh is just trying to make sure that even large private equity assets have multiple alternatives, and one of them that you mentioned earlier that it’s been great to see that market revive the bid is on the IPO side. And, you know, we take a look at, you know, like StandardAero out of Carlisle’s portfolio, having, you know, what I would call a very successful IPO so far, you know, certainly upsides from a billion to 1.4 you know, priced at 24 bucks a share, currently trading above 32 per share. I think there was a an appetite out there for a strong industrial business like this, especially in aerospace and defense. Maybe give me some thoughts on the IPO market and how you’re seeing it as a true alternative for some of our clients that are thinking about monetizations.
So yeah, people in the joshua rosenbaum rbc construction related sectors are very excited. Private equity, they generally represent anywhere from 30 to 50% of total deal volume in aerospace and offense, and I think that is, I think their level of activity is just going to continue to increase. So I do think that we’ll continue to see more first-time private equity buyers enter the sector, just because the trends are so favorable.
Before Citi, Allison managed the client marketing team at Lazard Frères Asset Management, where she created high volume client materials and played a key role in launching the firm’s first online client offering. Well when you think back to roughly a year ago, when we last had a sit down post our annual industrials conference in terms of the state of the world, as I was reflecting on this, there’s been significant progress. You know, at that time, we’re talking September, October of 2023 you had a 10 year that was at 5%, you had very stubborn inflation, you kind of had a macro backdrop, the likes of which most people hadn’t seen in their professional careers. It’s still more, I’d say, a corporate environment than a private equity environment, but private equity is increasingly active. We have a world where I’ll speak for RBC specifically, we’ve actually done two great IPOs in the sector, both in Aerospace And Defense, lower and StandardAero.
From Harvard University in Computer Science/Engineering Sciences. Trevor has been deeply involved in several community initiatives, including Chair of the Board of Directors for YMCA Calgary and serving as a member of the Dean’s Advisory Council for the Lazaridis School of Business and Economics at Wilfrid Laurier University. He has also been active in coaching youth hockey and baseball. In 2020, Trevor served as Co-Chair of RBC’s national employee giving campaign. While it’s a huge difference from last year, we are nowhere near the feeding frenzy of 2020 and 2021.
Obviously if rates come down and unemployment remains low, this space could get beyond interesting. Non-residential people are worried about offices, but there’s a lot of need for suburbanization offices. There’s also onshoring – not just huge battery semiconductor plants, but all sorts of onshoring in the industrial manufacturing sector. So it’s actually been a pretty good market for building and construction. There’s been a big focus on defense, including next-generation technologies like autonomy, tactical communications and cybersecurity. The aftermarket for commercial aerospace has also been very strong after pent-up demand from the pandemic and limited ability for OEMs to increase production of new plans as a result of supply chain and other operational issues.