Paul Teuten, Managing Director in Duff & Phelps’ M&A Advisory practice, spoke to Army Technology about the economic impact COVID-19 is having on the defense industry. Similar to other industries, defense is seeing a slowdown in deal activity during the pandemic.
Paul commented, “The current situation has caused quite a few actions to pause or be put on hold, or decisions to be deferred. Whether they continue rather depends on if it was the beginning of the transaction or the end of the transaction.”
He continued, “Clearly, in these market conditions, buyers tend to be very cautious and so the closer we are to a discussion about value, the harder it is to bridge the gap between buyer and seller.”
“The bright spot is the defense industry, which is demonstrating its trading resilience; it’s not that its businesses are impacted (they are – as companies respect government regulation to protect employee safety,) but revenues are typically holding up as the end customers are often government bodies and furthering national security with budgets unchanged,” stated Paul.
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