I was recently a panellist at the Henslow Defence and Security Conference in Sydney – joined by Ken Fukumoto of Janes Capital Partners and Raphaël Petit of Oaklins France. The conversations there – on capital, on cross-border appetite, on where acquirers are actively looking – reinforced a view I hold strongly: the window for UK defence technology businesses is open now, and the international buyer pool is wider than most founders realise.

The conference illustrated the scale of that appetite. Across the US, Europe and the Indo-Pacific, defence budgets are at generational highs. NATO members are committed to sustained spending increases. Most of the world’s major primes and a growing number of well-capitalised private equity platforms are actively looking to acquire rather than build. UK businesses sit at an advantageous intersection of these forces: strong domestic procurement tailwinds, Five Eyes and AUKUS positioning that gives preferred access to allied nation frameworks, security-cleared facilities and teams that take years to replicate organically, and an innovation ecosystem – Cambridge, Oxford, Bristol – that continues to generate compelling early-stage capability. The businesses that engage now will do so at better valuations than those that wait.

The valuation picture strengthens that case. European listed defence stocks are trading at around 20.7x EBITDA against 18.2x for US peers. At transaction level, the upper quartile of European defence deals is approaching 20x EBITDA. The businesses reaching those multiples are not the largest – they are the most defensible. Proprietary technology. Recurring government revenue. Security clearances that take years to replicate organically. Software-defined models that scale. Those are characteristics many UK SMEs possess and consistently undervalue when assessing their own strategic options.

Private equity is active alongside strategic buyers, with global PE defence deal count at 82 transactions in 2025, approaching the 2021 peak. The buyer market is genuinely competitive. That competition supports price – but only for businesses that run a properly structured process. Our own recent transactions reflect that activity: OSL acquired by Danish prime Terma, Silent Sentinel by Motorola Solutions, the ExoAnalytic Solutions sale to Anduril, SRT Marine’s £17.5m equity fundraising, and Cook Defence Systems’ investment from HEICO – buyers spanning the US, Europe and beyond.

One note of caution: regulatory complexity on cross-border transactions is being consistently underestimated. NSIA in the UK, FIRB in Australia, and CFIUS in the US and equivalent regimes elsewhere create real conditionality risk. Manageable – but only when mapped from the outset.

The strategic case for UK defence businesses has rarely been clearer – the buyers, the capital, and the valuations are all pointing in the same direction.

For any enquiries or discussions, feel free to reach out to any member of the Cavendish team.