How to Sell an Aerospace or Defense Manufacturing Company

Most aerospace and defense suppliers in the lower middle market are valued on a multiple of adjusted EBITDA. As a general guide, smaller build-to-print job shops often trade around 4x to 6x EBITDA, certified shops with special processes, long-term agreements, and diversified programs often reach roughly 6x to 9x, and companies with proprietary products, sole-source positions, or aftermarket revenue can command more. Smaller owner-operated shops are usually valued on seller's discretionary earnings instead. Your actual value depends on your certifications, customers, programs, margins, and team.

Yes. AS9100 is effectively the entry ticket to most aerospace supply chains, and NADCAP accreditation for special processes such as heat treat, chemical processing, NDT, or welding is expensive and slow to earn. Buyers pay for certifications because they would otherwise spend years and significant money to get them, and because they come with approved-supplier status at your customers.

ITAR registrants must notify the State Department's Directorate of Defense Trade Controls of changes in ownership or control, and a sale or transfer to a foreign person requires advance written notice, generally at least 60 days before closing. Buyers also need to understand how controlled technical data will be handled during diligence. These steps should be planned with your export-control counsel early in the process.

Sometimes, but it adds steps. A foreign buyer may trigger a CFIUS review, ITAR advance notice requirements, and, if you hold a facility security clearance, foreign ownership, control, or influence mitigation. Many owners run a process focused on U.S. buyers for simplicity, while still considering foreign buyers when they offer a clearly better outcome.

It depends on the deal structure. In a stock sale the contracting entity stays the same, so contracts usually continue, subject to any change-of-control terms. In an asset sale, prime government contracts generally require a novation agreement with the government, and subcontracts and purchase orders from primes often require the customer's consent. Small business size status may also need to be recertified after the transaction.

Buyers now ask early about your compliance with DFARS cybersecurity requirements, your NIST SP 800-171 assessment score, and your readiness for CMMC, which is being phased into Department of Defense contracts. A gap can reduce value or stall a deal, so it is one of the first items to review before going to market.

The most active buyers are private equity-backed aerospace platforms building out capabilities through add-on acquisitions, larger strategic suppliers adding capacity or a special process, family offices, and independent sponsors. Individual buyers using SBA financing are common for smaller job shops. A competitive process that reaches several of these groups at once produces the strongest price and terms.

Most sales take nine to twelve months from preparation to closing. Aerospace and defense deals often need extra time for quality-system and customer diligence, export-control and cybersecurity review, and customer consents, so preparing those items before going to market shortens the timeline.

Your company is marketed on a no-name basis, buyers are screened and sign a non-disclosure agreement before learning your identity, and sensitive information is released in stages. Export-controlled technical data is kept out of the general data room and only shared under proper controls with eligible buyers.

It depends on your goals. Some owners sell the real estate with the company, others keep it and sign a long-term lease with the buyer for ongoing income, and some complete a sale-leaseback. Any real estate component is handled under my California DRE license, #02372118, and the right choice is usually clearer after comparing the options side by side.