Bankers and insiders say M&A action is heating up

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The space sector has seen a variety of mergers and acquisitions since the start of the year, but the deal-making is only heating up.

This week I spoke to bankers, private equity partners and investors to get a candid health check on M&A activity in the industry, and the consensus was fairly unanimous. As one financier said: “The dominoes are starting to fall.”

“This is a normal market cycle,” a second financier said, and the pendulum is swinging toward a shakeout: “A lot of those weaker companies fail, and there’s a lot of consolidation.”

“We’re early into the process of reckoning actual demand versus hype,” a third said.

Most people I talked to expect that – absent an unexpected and dramatic swing in macroeconomic conditions – this period of companies selling or failing will last the next 12 months. CNBC agreed to keep their identities anonymous so they could talk freely about non-public discussions and sentiments. 

“A lot of these sort of startup companies that have been around for the last few years will see the wall in front of them and likely sell ahead of that,” another financier said.

On the top end of the M&A market, multiple bankers told me that United Launch Alliance — the joint venture between Lockheed Martin and Boeing — continues to be shopped around, as has been reported, while packaging giant Ball is looking to sell off its aerospace subsidiary. ULA referred my request for comment on the sale process to Boeing and Lockheed. A Ball Aerospace spokesperson declined to comment.

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