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Enhancing Capabilities & Growth Output

The Growth Performance


Aerospace & Defence sector requires a highly systematic and  disciplined approach to managing growth capital and investment portfolio, based on prominent returns alongside in-depth analysis of the key drivers of market value.


Going by the major trends in A&D throughout 2018-19, it is very important to note that even under market uncertainties and volatility, the stakeholder stance and ability to remain agile helps successful growth in the long run. This also helps in remaining at par and equilibrium with financial & planning cycles.


The commercial aerospace industry is marching forward for continued growth. Given the current market analysis, air transport passenger demand is expected to grow at around 5-6 percent a year in the next ten years. However, in the business aviation segment, there is a decline in inventory of used air-crafts and increased utilization rates. 




Strategic Expertise & Privy Deal-flow


Selenine A&D Deals support key stakeholders, aerospace and defense companies and private equity firms on key M&A decisions, from identifying acquisition or divestiture candidates and performing detailed buy-side diligence, to developing critical strategies for capturing post-deal profits and exiting a deal through a profitable sale. 


Evolving Markets & Navigation Channels


The prices for brand new air-crafts however, remains high but in order to protect and enhance growth and current market positions  industry players should focus on key  priorities that align their interests with the evolving market structure.


By examining such evolving market structures and  dynamics of the aerospace and defense (A&D) sector, we are emphasizing critical need for global companies to focus on building relationships with  various aerospace, defense and security experts around the world. 


These include relationships with expert industry defense organisations, departments of defense and security across governments & nations, major aerospace stakeholders and alike. It is vital that new markets like India, Australia, Canada, New Zealand and other healthy options across the Euro-zone must also be explored, rather than only focusing on US an traditional EU markets.







Selenine A&D Investment Portfolio

Aerospace & Defense companies need to focus on several  strategic areas in the evolving industry landscape. From managing and aligning with the  development cost curves, to staying competitive in the market scenarios.


Our careful selection of investment opportunities, available aircraft selection for buying and selling, Defence Equipment & Security Equipments and machinery are key to the fundamentals of a strong investment portfolio.


In order to ensure that the best investment options, buying / selling opportunities, M&A routes are available, we not only handpick but also ensure a regular systems and market trends update is available to major industry stakeholders and defence & security experts.


Strategy, Innovation and Relationship Focus


We have growing relationships with major commercial aerospace leaders and stakeholders in the industry which include aircraft OEMs, defence organisations and satellite & space transportation firms. We  value our partnerships with these organisations in order to ensure strong investments, market growth and overhauling performance strategies in the long run.


Selenine Aerospace, defence & security industry practices is focussed on providing strategic guidance in  areas inclusive of M&A's, market entry in A&D,  growth investment & portfolio development, outsourcing operations, R&D investments, aeronautical engineering, preparation of smart defence and security technologies, innovation strategies and development of  first-run space  programs.


We understand pressures being faced by growing market demands on A&D companies. It is important to strategise how to use existing capital in this sector in order to support new product manufacturing and apt market delivery strategies. It is also critical to make strategic investment choices that yield long-term value especially in  product development, technological innovation, and R&D.



Government, Security & Defense Ministries


We have strong relationships with ministries and defense experts. Defense and Security are critical issues governing national security. It becomes paramount to  manage significant shifts in demand as defense funding,  funding for manufacturing, sale & purchase of aircraft, transfer of technology, equipment delivery and defense/security services is  funded by governments through their defense budgets.


Our strategic relationships with governments worldwide ensure smooth navigation for various markets & industry level requirements. We also support in ensuring apt funding strategies, partnership decisions, technological transfer and selection of A&D products with a comparative national study.

Year end analysis 2018 & 19 markets outlook

United States continues to be the key driver with an announced  defense budget of $750 billion for 2020. We are also looking at other major markets at overhauling their expenditures and defense and aerospace budgets bu around 30% from 2017-18 on an average. In this analysis, we have taken three major markets into account which include China, Western European nations in the euro-zone and Japan. 


Through our Geo-political trends report, we have projected a strategic impact of Brexit  and US-China trade disputes on the market scenario. However, there will be increase number of various smaller-to-medium level of industry stakeholders who will enhance their portfolios and offerings in 2019. The announcement of planned merger of Harris Corp & L3  Technologies is going to have a positive impact on the market and will be able to provide a good momentum to the market in 2019. We are focused on strong portfolio development, medium-sized M&A opportunities and advocating for increased aerospace budget by governments in major markets. 


Our focus on defense and security strategies is focused on driving a positive deal flow in the markets. It will critical to strengthen strong military capabilities, development of emerging technologies, applications of UAS, artificial intelligence monitoring and investments across A&D, anti-submarine warfare and digitization are going to be critical drivers.


While there is an increased demand for leasing and lending in the supply chain. We are witnessing many leading OEM's as opting out for inorganic strategies and routes for increasing service based revenue and growth. There is a possibility of increased backward integration and accommodation through key strategic M&A's.


 

We have already started to see an increase in interest and emphasis on digital transformation and usage in defense and security sectors and especially planned, state and of warfare capabilities. Out of all categories, strategic investors showed strong momentum in M&A activity for most of 2018, accounting for 89% share of deal flow value. The value is expected to increase by 2% in 2019 due to some major market momentum due to some mega-deals and high valued M&A's . North America and in particular the United States, continues to remain the most active acquirer in 2018 with a 75% share of deal value allocations, which is followed by Asia and Oceania regions respectively.


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Commercial Application, Investments & Market Capabilities


Understanding the UAS market 


The unmanned aerial system (UAS) was initially devised for usage as a  sophisticated military technology. However, over time and through sector growth, many other industries  have been able to utilize true applicability for various commercial applications. 


US is a leading market with growing capabilities of UAS applications for both military and commercial purposes. It is estimated that by 2027 alone the industry impact is going to be anywhere between $33 Billion to $50 Billion in contributing to the country's GDP.


We are projecting that the growth of UAS in United Sates markets for both commercial, defense and security applications is going to have a major impact on other markets across the globe. There is already an increasing application and use of UAS across Automotive, Engineering, Defense & Aerospace sectors where we are already witnessing major stakeholders in these sectors relying on for various applications to either aid, support or complement their products and services. 


Growth in Investments 


Investment in the UAS sectors are increasingly growing. While this is a positive trend for the industry, however, investors and many companies investing UAS growth are directing their funds to untested applications.  Air taxis are one such example where testing, feasibility, standards and government regulations are all for due agreement, before allowing this technology into the public domain and for market consumer usage. Having said that, deep end R&D investments for actual implementation and on the ground applicability.



Aerospace & Defense Practise


Selenine Group

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