Aerospace & Defense Business Valuation Calculator – United States

The United States dominates global aerospace and defense with $900+ billion in combined annual spending, creating the deepest M&A market for A&D companies worldwide. Defense-focused PE firms (Veritas, Arlington, American Industrial Partners) have deployed record capital, while strategic acquirers from L3Harris to Northrop pursue capability consolidation across the supply chain.

What distinguishes US A&D valuations is the intersection of program positions, security infrastructure, and technology differentiation. DoD prime positions on priority platforms (NGAD, B-21, Columbia-class submarines) command 12-15x EBITDA premiums. Cleared facilities with Top Secret/SCI programs trade at significant premiums versus commercial-only operations. Defense electronics and software companies routinely see 15-20x multiples when selling to strategics seeking digital capabilities.

Valuation frameworks segment sharply by business model: aftermarket parts and services trade at 10-14x EBITDA with recurring revenue characteristics; production contracts at 7-10x reflecting program lifecycle risk; and R&D-stage defense tech at revenue multiples when conventional metrics don't apply. Commercial aerospace suppliers remain subject to Boeing/Airbus production rate volatility affecting near-term valuations.

The buyer landscape reflects defense budget priorities: strategic acquirers target capabilities aligned with JADC2, hypersonics, and space. Defense-focused PE has consolidated missile components, avionics, and specialized manufacturing. CFIUS scrutiny increasingly restricts foreign buyers even from allied nations, pushing valuations higher for US-owned platforms.

ITAR/EAR compliance creates due diligence complexity requiring specialized counsel. Facility clearance transitions (DSS-sponsored versus contractor-sponsored) affect deal timelines. Cost accounting system adequacy (CAS-covered contracts) and DCAA audit history are critical diligence areas. SOC 2 and CMMC 2.0 requirements increasingly affect cybersecurity valuations.