Alenia Aeronautica has delivered the last C-27J to the Lithuanian Air Force — Press Release
Filed under: Acquisitions, Business Line, Companies, Events, Military Aviation, production program
Alenia Aeronautica has delivered the last C-27J to the Lithuanian Air Force
Alenia Aeronautica has delivered on the 21st of October 2009 to the Air Force of the Lithuanian Republic the last out of 3 C-27Js, as per the contract signed in June 2006, fully meeting time schedule. The first aircraft had been delivered to the Lithuanian Air Force in December 2006 and the second one in December 2008.
The ceremony took place at Siauliai Military Airport (Lithuania) at the presence of the Defence Ministry – Miss Rasa Jukneviciene – Commander of the Armed Forces – Maj Gen Arvydas Pocius – and Commander of the Lithuanian Air Force – Brig Gen Arturas Leita, and of Alenia Aeronautica’s top management.
The Lithuanian Defence Ministry has expressed his full satisfaction for this successful programme for the Country’s Armed Forces.
Giovanni Bertolone, CEO of Alenia Aeronautica, commented, “After one month from the ceremony for the delivery of the first refurbished G.222 for the U.S. Air Force (USAF) and assigned to the Afghan Air Force, today’s delivery, with the last C-27J to the Lithuanian Air Force, stands once again for the strong commitment by Alenia Aeronautica in fulfilling its contractual duties and in assuring its customers’ full satisfaction”.
The C-27J, developed by Alenia Aeronautica, is an aircraft capable of accomplishing many missions among which transport of troops, goods and medical stuff, paradrop operations, search and rescue (SAR), support to civil protection and maritime patrolling activities.
The C-27J represents the most advanced programme of last-generation tactical transport airplanes and will be used by the Lithuanian Air Force for the transport of troops and materials, also outside national borders, within the operations led by NATO agreements, whose organisation Lithuania has been member since 2004.
Photo by Alvydas Tamošiunas, Lithuanian Air Force Air Base.
Boeing Responds To KC-X Draft RFP Release
Filed under: Acquisitions, Boeing, Business Line, Companies, Congress, EADS, Events, Military Aviation, Northrop Grumman Corp., Proposal, Services, U.S. Air Force, logistics, production program
Yesterday after the Air Force put out the draft RFP for the new tanker program. The third try at this acquisition Boeing responded with the following statement:
“Our next step is to conduct a detailed review of the document. We want to understand how requirements will be defined and prioritized and how the proposals will be evaluated. That information will help us decide which plane to offer or whether to offer both planes. We appreciate that there will be frequent, open discussion with the U.S. Air Force as we go forward. Both the Air Force and the American taxpayer will benefit from the tanker options we can offer. Boeing has a KC-7A7 ‘family of tankers’ available to meet the warfighter’s requirements. Whether it’s the agile, flexible 767-based tanker or the large 777-based tanker, Boeing will deliver a combat-ready tanker with maximum capability at the lowest cost.”
More details on Boeing’s plans may be found at the KC-7A7 United States Tanker website.
U.S. Army’s Small Arms Struggles Continue
Filed under: Acquisitions, Business Line, Colt Defense, Companies, Congress, Events, Federal Budget Process, Services, U.S. Army, development program, logistics, production program
Over at CNET: Military Tech Mark Rutherford writes about how the Army has just put on hold its program to develop a new crew personal weapon to replace the M4 carbine and 9 mm pistols they currently use. The goal had been to develop a subcompact, lighter weapon. Interestingly the M4 “short” version of the M16 was developed for crew use and then became adopted military wide due to the need to have a shorter weapon to use from vehicles and in rapid response situations due to the threat in Iraq and Afghanistan. The Army had moved out on the XM8 system that would have had a rifle version and a support weapon firing 25mm rounds. This ultimately was canceled for a variety of reasons some political and some technical. The small arms situation with the U.S. is at such a state that the Special Operations Command (SOCCOM) went out and bought their own weapon, the SCAR. Attempts to get the whole military to adopt this were stymied as well. Much of these problems have to do with Colt and the U.S. desire to maintain and American designed and made small arms. The U.S. needs to move out and buy a new system to replace the M16/M4 family especially as there are issues with them in dusty environments. Really this has been one of the worst recent failures in U.S. acquisition history.
Textron to Sell Unit to Raise Cash
Filed under: Acquisitions, Business Line, Events, Federal Budget Process, Military Aviation, Woodward Governor, commercial aviation, production program
Textron Incorporated has been struggling of late due to downturns in the business jet market and the cancellation of the RH-70 Armed Reconnaissance Helicopter (ARH) contract that its component, Bell, was developing. Earlier this month Forbes reported that the company was looking at possibly selling portions of itself to keep cash flow going. At that time the discussion was about its finance business, but now CNNMoney.com writes that Textron agreed to sell its aircraft control and fuel management development and manufacturing group, HR Textron. This group will be purchased by Woodward Governor for about $365 million. This is to help that company expand its business in the airframes systems market. As there continue to be changes in the defense budget there will be more fallout among the defense industry. The Nineties saw significant mergers and contractions and that is certainly possible in the future as the U.S. military purchases less-and-less big ticket systems.
Unitech to be Purchased by Lockheed
Filed under: Acquisitions, Business Line, Events, Florida, IT, Lockheed Martin, Unitech, training
Lockheed Martin has agreed to buy Unitech sometime this year. Unitech is a smallish simulation producing company located in the Orlando area. The Orlando Sentinel reports that a deal to buy the company was worked out recently. Unitech complements the work that Lockheed has done in the simulation area in Orlando for years. The company has earnings of around $140 million, and it is common in these types of deals for private companies to pay about one year’s earnings for it. Many smaller defense contractors grow from one or two contracts to a size of between one to two hundred million and are then bought by another company. Larger companies buy them to gain work or expertise in a discipline or area that they might not have.
Digital Fusion Now Part of Kratos
Filed under: Acquisitions, Alabama, Business Line, Digital Fusion, IT, Kratos, Military Aviation, U.S. Army, development program
Kratos Defense & Security Solutions announced that it had completed the acquisition of Digital Fusion as an expansion of their capabilities in UAV and C4ISR. MSNBC has the press release. Digital Fusion which is based in Hutsville, AL and primarily supports the U.S. Army provides Kratos new opportunities in that market. One of the easiest ways for a company to grow capability or enter a new market is to acquire an existing company that already has the work. While there are sometimes issues of merging corporate cultures and people in the long most of these M&A activities are beneficial.
US Government takes a step to allow DRS purchase by Finmeccanica
Filed under: Acquisitions, DRS Technologies, Finemeccanica, IT, Italy
The US Government’s Committee on Foreign Investment approved the planned acquisition of DRS Technologies by Italian company Finmeccanica. The deal is worth over $5 B and is structured as a stock purchase at $81 or so a share. DRS traded today at just over $80. DRS had long been rumored as an attractive takeover target, and the purchase by a European company again highlights their desire to get into the US Defense market.
See a short article at NJ.com.
Cross posted at BNET.
SI International purchased by UK company
Filed under: Acquisitions, England, SI International, Serco, U.S. Air Force
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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, Agusta Westland, Congress, DRS Technologies, Finemeccanica, IT, Italy, 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.



