Industry Week in Review – April 8, 2011
Shares fell for the week as oil and gold prices spiked on Friday and investors awaited anxiously for news about the pending government shutdown. With the sixth Continuing Resolution set to expire at midnight on Friday, April 8th, lawmakers agreed on a seventh temporary spending bill, set to expire at midnight on April 14th, which will allow for an additional week to work on an agreement that will set funding levels for the remaining six months of the federal government fiscal year. The one week agreement cuts an additional $2 billion from current spending levels, but temporarily averts a shutdown that would have resulted in approximately 800,000 “non-essential” government workers being furloughed and a wide range of government services coming to a halt. The government is still at risk of shutting down if an agreement cannot be reached by the new deadline, but it appears that progress has been made on a longer-term spending agreement that would include approximately an additional $40 billion in spending cuts. Elsewhere, the British Ministry of Defence is calling for a 12-month spending freeze as part of an agreement on funding for the financial year that started earlier in the week. MoD insiders are stating that the moratorium applies to all but the critical areas of spending, such as equipment for operations in Libya and Afghanistan.
Notes on some big movers:
- Northrop Grumman Corporation (Down 8.0%)
- AeroVironment, Inc. (Down 10.8%)
- Bombardier, Inc. (Up 12.4%)
- Vector Aerospace Corporation (Up 14.7%)
- SRA International Inc. (Up 10.5%)
Notes on some relevant transactions:
Goodrich Corporation announced on Friday that it has signed an agreement with SSCP Aero Holdings S.C.A., a company backed by the European private equity firm Stirling Square Capital Partners, to acquire Microtecnica S.r.l.
KeyW Corporation announced on Friday that it has acquired JKA Technologies.
SAIC announced on Friday that it has reached an agreement to sell to Wipro Ltd. and certain SAIC operations focused on providing specialized IT services to oil and gas companies.
SRA International announced on Friday that it has entered into a definitive merger agreement to be acquired by an affiliate of Providence Equity Partners.
Deltek announced on Friday that it has acquired FedSources, and its parent company Washington Management Group.
Teledyne announced on Friday that its subsidiary, Teledyne DALSA, Inc., has acquired a minority interest in the parent company of Optech Incorporated.
EADS announced on Tuesday that its subsidiary, Eurocopter Holding, has agreed to acquire the issued and outstanding shares of Vector Aerospace for approximately $13.28 per share, or an enterprise value of approximately $637.8 million.