Aerospace and defense firms face unique challenges in forming joint ventures. Some partnerships that seem reasonable to gain economies of scale are challenged by regulators concerned with maintaining domestic capabilities. Other partnerships are thrust upon OEMs as a requirement for doing business in foreign lands, creating heartburn as winning today’s billion-dollar sales packages require transferring technologies to create tomorrow’s competitor. In serving this industry, Water Street Partners brings a unique blend of experience structuring and restructuring some of the world’s most important A&D joint ventures with a deep understanding of the complex geopolitical and strategic challenges behind them.
We often work with clients on structuring JVs in emerging markets in order to satisfy local requirements – including offset obligations, technology sharing, and local production and employment – while helping them with creative structures that maximize their level of governance and control to mitigate issues with FCPA, ITAR, and other sources of risk. We perform this work across the transaction lifecycle, helping clients get comfortable with their partners from a capability/compatibility standpoint, get aligned on scope and JV evolution, achieve clarity on financial flows and sources of value, secure internal alignment on transactions, and creatively overcome gaps in key terms (i.e. valuation, IP transfer, control, etc.).
In addition to transaction work, we provide support to existing A&D JVs by helping individual shareholders, JV Boards, and their management teams achieve alignment on key joint venture dimensions like strategy and growth, governance, operating model, and shared services.
Water Street Partners helps global commercial and military prime contractors and select Tier-1 and -2 suppliers to structure, restructure, and govern their most important aerospace and defense joint ventures. Our work spans across all industry sub-sectors (defense, commercial aerospace, regional jet, general aviation, defense, space, etc.), across the value chain (e.g., R&D joint ventures; manufacturing and sales joint ventures; MRO and after-market support joint ventures) and around the world (the Americas, Europe, Middle East, and Asia Pacific). Over the last five years, we’ve served six of the ten largest global A&D firms and their joint ventures, as well as a dozen of the top 30.