Industry Week in Review – April 12, 2013
Over the past week, President Obama introduced the White House’s $3.778 trillion spending plan for GFY2014, which called for almost $1 trillion in tax increases over 10 years and higher spending on programs such as education, transportation, and mental-health services.
The U.S. Department of Defense (“DoD”) revealed a GFY2014 budget of $527 billion, a spending plan that is $52 billion above the $475 billion Federal spending cap for the year set by the Budget Control Act of 2011. The DoD’s request includes $137.0 billion for personnel, $99.3 billion for procurement, and $67.5 billion for research and development. Without factoring sequestration into the 2013 enacted budget, the Army and Navy requests are decreased by about 2% each, while the Air Force request is up only 3.3%. The budget proposal mentions specific programs and capabilities in its request including $4.7 billion for cyber operations, $8.4 billion for 29 F-35 joint strike fighters, $14.3 billion for shipbuilding efforts, and $5.4 billion for the Virginia-class submarine program, among others.
Furthermore, the budget request for the Central Intelligence Agency and other non-military spy agencies is $4.4 billion less than last year’s request of $52.6 billion. Now that the budget has been released, DoD and military service leaders will speak before the House and Senate Armed Services Committees regarding the allocation of funds within the DoD. The President’s proposal, which is used by Congress for budget guidance, arrived over two months late and after the House and Senate had already offered proposals of their own.
Edac Technologies Corp. (Down 4.3%) – Shares were down this week after MidOcean Partners withdrew its $18.25 per share buyout offer, a bid that was $0.50 higher than the $17.75 per share bid by Greenbriar Equity Group and GB Aero Engine made last month. EDAC’s board announced it unanimously recommends that the company’s shareholders accept the offer by Greenbriar and GB Aero Engine.
ViaSat acquired LonoCloud, an early-stage company that provides cloud networking software. ViaSat intends to integrate core components of the LonoCloud Platform as a Service (“PaaS”) with the ViaSat broadband network. The acquisition is expected to shorten development cycles for new ViaSat service offerings. Terms of the deal were not disclosed.