US high-tech sector will see more half-billion dollar acquisitions by year end, says dealmaker

The United States defence sector is likely to witness a spate of half-billion dollar acquisition deals in the high-tech sectors by the end of the year as the Department of Defense (DoD) focuses on doing "more with less", according to a senior aerospace and defence dealmaker.

Following General Dynamics' (GD's) early June agreement to buy US electro-optical and infrared sensors firm Axys Technologies (Axys) for USD643 million, we are likely to see further announcements of a similar kind "in the next four months", said David Baxt, Group Head of Aerospace and Defence Investment Banking at mergers and acquisitions (M&A) consultancy Jefferies Quarterdeck (Jefferies), which advised Axys on the deal.

Jane's noted at the time of the announcement that the strong price offered by GD - representing 12 times Axys' earnings before interest, tax, depreciation and amortisation (EBITDA) - reflects the competition to secure the group. GD faced significant competition during an auction process, sources familiar with the deal said.

Baxt declined to reveal the identity of GD's competitors, instead saying: "five large cap strategic names" were involved in bidding for Axys and described the deal as "very relevant".