Filed under: Business Line, CACI, Companies, development program, Elbit, IT, logistics, Military Aviation, production program
The world wide defense industry continues to consolidate as contractors larger-and-small continue to acquire other companies to expand their roles in certain business lines or due to shrinking defense budgets causing a refocus. Several deals closed or where announced in the last few months.
Last month for example Cubic Corporation (CUB) announced that they would move to acquire Abraxas Corporation. Cubic provides test support and range services to a variety of defense customers worldwide. Abraxas supports cybercrime and defense and security customers. The deal was estimated to be worth around $124 million. Last week Cubic received regulatory approval for the acquisition to go forward.
CACI (CACI) the large intelligence and IT service support contractor as of 1 November completed its acquisition of privately held TechniGraphics. TechniGraphics provides geospatial services and this will expand CACI’s ability to gain market share. CACI has done very well over the last few years and some consider its business model as the way most defense contractors will go as the large hardware contracts become fewer due to budgetary pressures.
The Israeli defense contractor Elbit who manufacture aerospace systems including UAV as well as parts and support services for aircraft completed its acquisition of the U.S. company M7 Aerospace yesterday. The $85 million sale will allow Elbit more penetration of the U.S. market as M7 provides government and commercial customers aviation logistics, maintenance and supply chain management. Due to export control and security laws and regulations it is often easiest for overseas companies to establish U.S. subsidiaries or acquire U.S. companies to enter its defense market.
M&A has been picking up as the market adjusts to the expected flattening or decline of the U.S. and European defense budgets. As the funding shrinks it will cause companies to consider their products and market shares. Some will want to sell parts to get out of those business areas and some will want to acquire to get into them.
The biggest deal that is hanging out there is what Northrop Grumman (NOC) wants to do with its ship building group. Previously they have stated they would like to sell it as declining U.S. Navy ship building plans limit their opportunities. Depending how the U.S. defense budget ultimately resets these plans could be reconsidered.
These trends will continue and may accelerate over the next few years as the defense industry adjusts as it did in the Nineties to the changing market.
Elbit Systems U.S. Subsidiary Receives $68 Million ID/IQ Contract to Supply Head-Up Displays for U.S. Department of Defense — Press Release
Filed under: Business Line, Companies, Elbit, Events, Press Releases, production program
Elbit Systems U.S. Subsidiary Receives $68 Million ID/IQ Contract to Supply Head-Up Displays for U.S. Department of Defense
HAIFA, Israel, October 13, 2010/PRNewswire-FirstCall/ — Elbit Systems Ltd. (NASDAQ and TASE: ESLT) announced today that its wholly-owned U.S. subsidiary, Elbit Systems of America, LLC, was awarded a 5-year, $68 million Indefinite Delivery/Indefinite Quantity (ID/IQ) contract from the U.S. Army Contracting Command in Huntsville, Alabama to supply the U.S.Army, Navy, Marines Corps and Coast Guard with AN/AVS-7 Head-Up Display components including the latest Elbit Systems of America Flat Panel Day and Night Head-Up Display units.
Initial delivery orders totaling $23 million have been awarded under the ID/IQ contract. This is a follow-on contract to a $75M ID/IQ contract awarded in September 2005.
The new display units increase situational awareness and safety by allowing pilots to fly “head out of the cockpit” during day and night operations.
Commenting on the award, Elbit Systems of America President and CEO, Raanan Horowitz noted, “This follow-on order attests to our customer’s satisfaction with our systems and performance track record. Elbit Systems of America is pleased to provide cutting-edge technology for the warfighter, delivering high quality Helmet Mounted Displays at accelerated pace and supporting critical missions and needs. The AN/AVS-7 has proven itself by providing situational awareness and added safety to Army aviators on all US Army helicopter platforms and we are proud we can provide now an upgrade to these systems.”
About Elbit Systems
Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (“C4ISR”), unmanned aircraft systems (“UAS”), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services.
For additional information, visit: http://www.elbitsystems.com.
Source: Elbit Systems Ltd
Filed under: Business Line, Companies, development program, Elbit, Elbit Systems, Events, Press Releases
UAS Dynamics Successfully Demonstrates STORM’s Data Link During Flight Test
CHARLOTTE, N.C. and FORT WORTH, Texas, April 14 /PRNewswire/ — UAS Dynamics, LLC, validated the performance of the Ku-band Common Data Link (CDL) on its STORM unmanned aerial system (UAS) during flight testing conducted in late March at the Yuma Proving Grounds in Yuma, Ariz. The flight tests also validated features of STORM’s system architecture that enable data from the on-board payloads to be accessed by remote users in real-time over a secure Ethernet connection to the ground control station.
STORM is UAS Dynamics’ product offering in response to the U.S. Navy and Marine Corps’ small tactical unmanned aerial system (STUAS) competition. UAS Dynamics is a joint venture between General Dynamics Armament and Technical Products and Elbit Systems of America, LLC.
“The successful integration of a Ku-band CDL in this class of UAS represents a significant achievement,” said Peter Klein, chief engineer for UAS Dynamics. “The validation of the CDL and the system architecture, combined with the demonstrated air vehicle performance, keeps us on target to meet all of the performance objectives for the STORM system.”
UAS Dynamics, LLC, with offices in Charlotte, N.C., Fort Worth, Texas, and Fort Mill, S.C., is an American company formed by General Dynamics Armament and Technical Products, a business unit of General Dynamics (NYSE:GD) , and Elbit Systems of America, LLC, wholly owned by Elbit Systems Ltd., (NASDAQ: ESLT) . UAS Dynamics focuses on meeting the expanding and evolving needs of the U.S. Department of Defense and other U.S. government agencies by providing state-of-the-art unmanned aerial systems for the full spectrum of operational requirements. More information about UAS Dynamics is available at www.uasdynamics.us.
Source: UAS Dynamics
Filed under: Business Line, Companies, Countries, Elbit, Events, IAI, Israel, Military Aviation, production program, Turkey
The Turkish Government announced yesterday that they are willing to take delivery of six of the ten Unmanned Air Vehicles (UAV) reconnaissance systems purchased from Israeli companies. The six systems passed performance tests and this will allow Israel to ship them to Turkey. Another four systems that were part of the contract will have to pass similar tests to be delivered.
Israel has been progressively trying to sell equipment to foreign customers and has had some success with Turkey and India. This contract was let five years ago and was a major coup for Elbit and Israel Aerospace Industries (IAI) when they won it. Some development issues have led to the long delivery period. Israel’s defense establishment hopes to garner further sales of such equipment as these UAV demonstrate their capabilities for Turkey.
Filed under: Business Line, Companies, Congress, Editorial, Elbit, Events, Federal Budget Process, Military Aviation, production program, Services, States, Texas, U.S. Marine Corps
The U.S. Marines like the Army have been heavily stressing their helicopter fleet in Iraq and Afghanistan. That service has begun to upgrade their lift capability with the procurement of CH-53K and V-22 aircraft. At the same time they have refurbished their older CH-53D aircraft to maximize their use.
Elbit makes a display that has been fitted into many Army and Marine helicopters already called the ANVIS-HUD. The Marine Corps did not have the money available in their budget to add this to the CH-53D as part of their refurbishment. Now the local Congressional Representative, Kay Granger (R-TX), has proposed a $22 million earmark to do this.
This illustrates one of the issues with earmarks. Sometimes they can be used for good things that the services may not have available funds for. Not all earmarks are for blatant waste or fraud like those that make the headlines. There are also cases where the company or the Service have lobbied Congress to include these kind of marks.
Ideally the budget would be planned by the Services, OSD and the President and Congress would do little to change it. That is not possible as the Constitution gives the House the authority to start all funding bills. What is in the bill is what is given to the Executive Branch at the end. Earmarks are a part of this process. As this example shows though not all earmarks are bad and they can buy useful capability for the military that might not be able to fit in the regular budget.
CH-53 photo by Flickr user Obskurantist.
Filed under: Business Line, Canada, Contract Awards, Countries, Elbit, Elbit Systems, Events, India, Israel, IT, production program
The Canadian Navy is conducting a modernization program for their Halifax class frigates. Lockheed Martin Canada has won the contract to upgrade the electronics and command and control systems on board the ships. As part of this that company awarded the Israeli based Elbit Systems subsidiary, Elisra Systems, a contract for electronic warfare equipment.
That contract is worth about $55 million. Israel has had to develop a fairly sophisticated indigenous arms industry that covers all aspects from large weapon systems to small arms to electronics. In the last few years those companies have started to win foreign contracts. India recently has turned to Israel for an Airborne Early Warning (EAW) system. This contract demonstrates how capable the Israeli industry is, and is probably a sign of more such contracts to come.
Filed under: Business Line, Contract Awards, Countries, Elbit, Events, Israel, Military Aviation, production program
Fresh off the recent successful use of UAV in support of operations against Hamas in Gaza, the Israeli government awarded Elbit Systems a contract for more Skylark 1 systems. The press release is carried at PRNewswire.com. The contract will also buy logistics support and training for the system. The value of the contract is about $40 million.