Valuations in Aerospace & Defense: What Really Drives the Price? w/ Bill Alderman

Most people think valuations come down to simple formulas: EBITDA multiples, discounted cash flows, and comps. The reality in aerospace and defense is far more complex. That’s the reason so many owners and even investors misunderstand how acquisitions actually work in this industry. The truth is, not every buyer values the same business the same way. A small private buyer focuses on what they can finance. A mid-sized family-owned firm is driven by IRR and payback ratios. Large public companies move based on stock price and accretion. And private equity? Despite having the cash, they often find themselves at a disadvantage, outbid, or outmaneuvered by buyers who can leverage existing capacity, sales teams, and operating talent. That’s also why talent is one of the most overlooked yet critical pieces of any deal. The quality of management, the depth of customer relationships, and even succession planning can add or strip away millions from a sale price. In this episode, sell-side banker Bill Alderman returns for his quarterly M&A check-in. We break down the five buyer mindsets that actually drive valuation, and how management succession becomes the most valuable “intellectual property” in a deal. You’ll also learn: The five buyer archetypes, and how each one calculates value differently Why “financeability” sets the floor and “EPS accretion” sets the ceiling The critical role of management teams and succession planning in deal pricing How strategic buyers use capacity, salesforce, and cost absorption to outbid private equity Why valuation isn’t just math, it’s psychology, timing, and leverage What today’s seller-friendly market means for owners looking to exit in the next 12–24 months Guest Bio William H. Alderman (Bill) is the Founding Partner of Alderman & Company. Bill is an M&A specialist in the middle market of the aerospace and defense industry with over $2 billion in mergers and acquisition-related transactions to his name. Prior to founding Alderman & Company in 2001, Bill worked for 15 years on Wall Street and in the Aerospace & Defense Industry, principally on M&A transactions in the middle market. His employers included BT Securities, Fieldstone, and General Electric. Bill is a Securities Principal registered with the Financial Industry Regulatory Authority (“FINRA”) and has four securities industry licenses (Series 7, 24, 63, and 65). Bill is a commercial pilot and owns and operates a Cirrus SR22. URL Link: https://www.aldermanco.com/ LinkedIn - William Alderman https://www.linkedin.com/in/williamalderman/ About Your Host Craig Picken is an Executive Recruiter, writer, speaker and ICF Trained Executive Coach. He is focused on recruiting senior-level leadership, sales, and operations executives in the aviation and aerospace industry. His clients include premier OEMs, aircraft operators, leasing/financial organizations, and Maintenance/Repair/Overhaul (MRO) providers, and since 2008, he has personally concluded more than 400 executive-level searches in a variety of disciplines. Craig is the ONLY industry executive recruiter who has professionally flown airplanes, sold airplanes, and successfully run a P&L in the aviation industry. His professional career started with a passion for airplanes. After eight years’ experience as a decorated Naval Flight Officer – with more than 100 combat missions, 2,000 hours of flight time, and 325 aircraft carrier landings – Craig sought challenges in business aviation, where he spent more than 7 years in sales with both Gulfstream Aircraft and Bombardier Business Aircraft. Craig is also a sought-after industry speaker who has presented at Corporate Jet Investor, International Aviation Women’s Association, and SOCAL Aviation Association. Check out this episode on our website , Apple Podcasts , or Spotify , and don't forget to leave a review if you like what you heard. Your review feeds the algorithm so our show reaches more people. Thank you!