Industry Week in Review – December 27, 2013
After the Senate voted to pass the 2014 National Defense Authorization Act (“NDAA”) last week, President Obama signed the legislation into law on Thursday. The bill now assures $552.1 billion in base military spending with an additional $80.7 billion for overseas contingency operations, namely the war in Afghanistan. Among the new legislation, President Obama praised the NDAA for allowing accelerated repatriation of detainees from the U.S. naval facility at Guantanamo Bay in Cuba as it allows greater flexibility to transfer detainees abroad and he will continue to work with Congress to take additional steps needed to close the facility. Following months of budget uncertainty and sequestration stipulations, the newly-signed law and broader budget agreement allow for a 1 percent raise for military personnel and create top-line spending limits for 2014 and 2015, which will erase an estimated $63 billion in arbitrary spending cuts that were to take effect on January 1st. Most importantly, the legislation critically reduces the threat of a future government shutdown on or around January 15th, when members from both chambers will be crafting spending bills under the new spending limits.
Big Movers
Meggitt plc (Up 4.0%) – Shares were up this week after the Company’s Training Systems division won a contract from the Australian Defence Force to provide hardware and software upgrades to training simulation facilities in a deal worth an estimated $18 million USD.
Relevant Transactions
Textron Inc. to acquire Beechcraft Corporation, a provider of turboprops, pistons, and light attack military aircraft for militaries, governments, and individuals in the United States and internationally. Textron will pay approximately $1.4 billion to acquire Beechcraft.
L-3 Communications Holdings Inc. acquired Mustang Technology Group, L.P., a provider of radar-based sensors and systems used in precision-guided weapons, electronic warfare, unmanned systems, and other military applications. Terms of the deal were not disclosed.
