SI International purchased by UK company
Filed under: Acquisitions, England, SI International, Serco, U.S. Air Force
Serco, a large service provider from the UK with worldwide operations, announced that it had purchased the US defense contractor, SI International. The $400 M deal expands Serco into the US defense market and represents another broadening of their market base. This continues the trend of European companies buying US ones in order to reach the large DoD budget here. By buying a US company many of the technology transfer and security requirements that impact foreign companies doing business can be minimized. SI International has 4,500 employees and primarily supports the US Air Force, an area that Serco does not do much business with.
The Guardian has the story here.
Fighting takeover Point Blank wins contract
Filed under: Acquisitions, Contract Awards, Florida, Point Blank Solutions, U.S. Navy, production program
According to the South Florida Business Journal, Point Blank Solutions won a contract to provide tactical vests. The contract could be worth over $20 M. Point Blank Solutions has been supplying body armor to the US Armed Forces for several years. At the same time the company is trying to prevent being bought by a hedge fund. They turned down one offer for the company last year, but now it looks like the shareholders will be allowed to vote on the deal.
For more see the South Florida Business Journal article.
DRS reports
Filed under: Acquisitions, DRS Technologies, Finemeccanica, IT, Italy, production program
DRS Technologies reported that sales were a record high for the last quarter. See an article here. DRS also reported a 40% increase in profits and a record backlog of over $1 B dollars. As discussed here, Finmeccanica has agreed to buy the American company. This would be one of the largest foreign acquisitions of an American defense company.
Lockheed Martin expands in Australia
Filed under: Acquisitions, Australia, IT, RLM Holdings, Tenix Group, logistics
Lockheed Martin has moved to buy a joint venture it had set up in Australia today. See a press release here. RLM Holdings was a company established by Lockheed Martin and the Tenix Group to manage the Jindalee Operational Radar Network (JORN) and provide other defense services. The JORN is a large array over-the-horizon surveillance system that can detect surface and aerial targets at very long range. RLM also manages other defense radar systems as well as providing services to the Australian defense forces. This acquisition will have to be approved by the Australian Government.
Boeing pays premium for unmanned aircraft partner
Filed under: Acquisitions, Insitu, Military Aviation, development program
Boeing had been working with Insitu, a Washington state company, on unmanned aircraft. Now it just bought the company. See an article here. Based on reports, Boeing payed quite a premium for the company. Insitu had an estimated earnings last year of $80 M and Boeing reportedly payed five times that for the company. Of course all this is based on anonymous reports as the details have not been made public yet. So if you were able to invest money in Insitu you made it back.
BAE grows in the US
Filed under: Acquisitions, Arizona, BAE Systems, Contract Additions, Contract Awards, Federal Budget Process, Military Aviation, development program, logistics, production program
This article discusses the effect BAE has had on Phoenix, AZ. It also illustrates how the non-US company has grown through the acquisitions of US companies and has gained more and more US defene business. In Phoenix alone the number of BAE employees has tripled in the last five years or so, and the company has been buying facilities and companies. The article also shows how some in Congress feel a British company is better than a joint German and French, making it easier for BAE to continue to gain work in the US.
Various suitors view Harris for takeover
Filed under: Acquisitions, Harris Corporation, IT, production program
This article discusses the situation of Harris Corporation who makes radios for the US military and various civilian applications. There business has boomed over the last few years and their size and contracts have made them a target of the larger US and European defense contractors. Unfortunately the good performance of the company has driven the stock to an all time high making an acquisition very expensive. This is especially true of concerns that with the change in US administrations that there will be a falling off in the US Defense budget. Another concern is that Harris does work on several classified programs making it difficult for foreign companies, like EADS or BAE, to purchase them. Even if it wasn’t in such a time of Congress looking askance at these kinds of acquisitions, the security requirements might be too hard.
Finmeccanica follows through
Filed under: Acquisitions, Congress, DRS Technologies, Finemeccanica, IT, Italy, augusta westland, production program
Bump - Fresh off good financial reports for the quarter, EADS is now looking at DRS Technologies as well. See an article here. This makes it sound like DRS might be a good buy.
As rumored this weekend Finmeccanica bought DRS today. The deal is for around $5 B. See an article here. This is the biggest acquisition so far by an European company. DRS has been an attractive take over target for a few years, one of the reasons its stock was so high. If this deal can make it through the necessary regulatory and legal review it will be quite stunning. Prior to this BAE and EADS had been doing smaller acquisitions, under a $1B. In today’s political environment due to the KC-45 deal and it being an election year it should be interesting to see Congress’s reaction.
THe Guardian speaks the truth (and obvious)
Filed under: Acquisitions, Commentary, Congress, Contract Awards, Federal Budget Process, Protest
A nice article in the UK’s The Guardian paper, here, discusses how the trend in the US defense industry is mergers & acquisitions and protests. This as the article points out is a product of fewer, bigger contracts. Much of the increased defense budgets of the last 8 years have gone to personnel, operations and maintenance, and the reset of existing equipment. Very few large procurements have been ordered, in fact, many of the large programs are winding down such as the C-17 and F-22. The Navy also is buying less ships as they get more and more expensive and the DDG-51 class transitions to the LCS and a new destroyer. In the Clinton years you saw the same process but that was due to the decrease in budgets from the Reagan years leading to less work requiring less companies. Protests were common as there was only so much work to go around. Now it is the same in that once a contract is awarded there is little hope for another one for several years. Whether these trends accelerate with a new administration or not we will have to wait and see until Feb, 2009. It may be like in 1992 there will be two budgets submitted to Congress. One on time by the outgoing President and then an update in the summer.
Looking to buy DRS
Filed under: Acquisitions, Finemeccanica, Italy, SETA, production program
This article discusses the idea that Finmeccanica, the Italian defense conglomerate, is looking at DRS Technology for an American acquisition. Like EADS and BAE the Italian company has been expanding its presence in the US. Its helicopter arm, Augusta Westland, won the VH-71 Presidential helicopter teamed with Lockheed Martin and is also trying to win the CSAR-X recompete post-protest. DRS which makes advanced sensors and electronics while providing SETA services has long been an attractive take over target. It’s stock though has done very well recently and for Finmeccanica to buy it would require a substantial investment. Read more
EADS acquires American company
There has been rumors that EADS would move to acquire a North American company soon, with CAE being the most talked about. EADS did buy a company, PlantCML, that manufactures communications systems primarily for emergency services. It does have some ties with their existing products, but primarily EADS will use PlantCML to market their products in the US. Previously PlantCML had been owned by a investment company.
Moving to the dollar zone attractive to EADS
Filed under: Acquisitions, CAE, EADS, Industry Analysis, Military Aviation
According to this article at DefenseNews.com, EADS is looking at aggressively growing their North American division. Ideally they would like to become a company that builds complete systems in the US and then provides them to the Department of Defense. Currently their two biggest contracts, the UH-72A and KC-45, will see final assembly in the US while the majority of components are made in Europe or overseas. In a related story, here, EADS is complaining about the high exchange rate of the dollar to the Euro. EADS sells things mainly in dollars, but pays their European suppliers and employees in Euros. Any movement of production and labor to the US will allow them to utilize dollars for these costs. Read more
Fear of US export control laws lead Canada to deny sale of company
According to this article the Canadian government denied the sale of MacDonald Dettwiler and Associates Ltd.’s satellite business to Alliant Techsystems Inc. See a previous post about the planned sale here. Canada cited the fact that if the company became American the laws protecting US technology exports would deny Canada access to the company’s satellite that focuses on the Canadian Arctic. Due to several scandals in the Nineties the US ramped up the laws governing technology transfer and export and make it very difficult to do this. Read more
Financial Times predicts rough road ahead for defense contractors with Democrat president
Filed under: Acquisitions, Congress, Federal Budget Process, Industry Analysis, Restructuring
The Financial Times in this story is predicting that with the election of Hillary Clinton or Barack Obama that there will be significant consolidation within the US defense industry. The people they talk to say for the next two years there shouldn’t be significant changes in US spending, but the FY10 budget will set the next trend. Read more
Alliant Technology downgraded on buy of McDonald, Dettwiler and Associates unit
Alliant Technology was downgraded by Finch Ratings to negative after it announced the purchase for $1.3 billion the geospatial and information services units of McDonald, Dettwiler and Associates. An article is here. For more on Alliant Technology see this.
iSys to be purchased by Widepoint
Filed under: Acquisitions, IT, U.S. Dept. of Homeland Security, Widepoint
Widepoint, an Illinois based company, will buy iSys. Details can be found here. This will broaden Widepoint’s business in Federal information management and identity assurance. iSys currently has contracts with DoD and Home Land Security. Of interest, it looks like iSys is significantly larger than Widepoint.
Technest Holdings sells EOIR subsidiary to private investment firm
This is a case where the parent company became realistic and realized that there was a good chance that they would not win a contract where they were the incumbent. Technest Holdings sold their EOIR subsidiary to a private investment firm for $34 M dollars. $23 M of it contingent on the winning of a contract from the US Army for the fourth time in a row. Each time a contract is re-competed it gets a little harder for the incumbent to win it. If the customer or contracting officer doesn’t desire new blood, the situation with the company may have changed as to its small business or minority owned status. See the full article here.
Kratos Defense & Security Solutions Completes Acquistion of Haverstick Consulting
Kratos Defense & Security Solutions, a California based company that provides IT and C4ISR solutions to the US military, completed the acquisition of Haverstick Consulting for about $85 M. Haverstick represents a more diverse business line for Kratos as they provide more technical support to systems and testing. See Fox Business News here. This is a common way for defense companies to expand their capabilities as well as their bottom line. If you are interested in expanding in a different area, or in a different geographical location, buy another company. You can also use this process to gain as big a market share of a product or service as possible.
Private Russian Bank Sells EADS Stake to Government Bank
According to AFX News Limited:
Russia’s JSC VTB Bank is selling its 5 pct stake in the European Aeronautic Defence and Space Co (EADS) to the VEB state bank for development and foreign trade for 1.45 bln usd, banking industry sources told Russia’s Vedomosti newspaper. … The sources added that VEB will then transfer the stake to Russia’s United Aircraft Corp (UAC).
Vnesheconombank Chairman Vladimir Dmitriev later confirmed the deal. More details here, and here.
Further information on Cobham Defense Eletronic System’s buy of BAE unit
Filed under: Acquisitions, BAE Systems, Cobham Defense Electronic Systems
The C4ISR Journal has more detail on the purchase of BAE’s Pennsylvania based surveillance and attack unit. Cobham has been buying other companies as it builds up its capabilities and revenue. See the article here.
BAE Announces That It Is Buying MTC Tech
Yesterday BAE announced that it would purchase MTC Technologies for a total price of $450 Million. The news story is here. Information about the Dayton, Ohio headquartered MTC Technologies can be found here.
ITT Industries Completes Acquistion of EDO Corporation
In a major addition to its products and capabilities, ITT Industries completed the acquisition of EDO Corporation on December 20th. The total price of the transaction was about $1.7 billion as the EDO shares were valued at $56. EDO over the last six year also had been aggressively acquiring companies to increase the span of their business line. EDO does have complimentary products with ITT in the areas of electronic warfare. This acquisition will also expand ITT’s reach into Huntsville, Alabama where the US Army’s Aviation and Missile Command (AMCOM) is located.
BAE Systems Agrees to Sell Their Surveillance and Attack Business
Filed under: Acquisitions, BAE Systems, Cobham Defense Electronic Systems
BAE Systems sold their Surveillance and Attack system development group located in Lansdale, PA to Cobham Defense Electronic Systems Corporation. See the Press Release here. This moves the corporation away from subsystem development and into being a primary developer and integrator of total systems. The work being done there was part of their Electronic and Integrated Solutions group, which “designs, develops, and manufactures a wide range of electronic systems and subsystems for military and commercial applications.” Their web page here.
-
Search This Site
Custom Search -
FREE Business Downloads
-
Latest Defense News
