Industry Week in Review – February 13, 2015
Aerospace & Defense Update
Bombardier Inc. underwent an executive reshuffle this week as Chief Executive and President, Pierre Beaudoin, grandson of company founder, Joseph-Armand Bombardier, stepped down from his position to make way for former CEO of United Technology Corporation’s aerospace division, Alain Bellemare to take over. Mr. Beaudoin’s father, Laurent Beaudoin, will also retire from his position as Chairman after 50 years with the firm. The Bombardier family’s exchange of control follows the halt in production of the Learjet project and increased concern over the Company’s ability to meet its debt covenants. Bombardier is required to have more than $1 billion in liquidity at the end of each quarter and with the $1.4 billion charge associated with the suspension of the Learjet project and few new orders, the Company faces increasing uncertainty. To address its cash flow, Bombardier has plans to issue an additional $600 million in equity and up to $1.5 billion in debt as well as suspend its dividend payments on both class A and class B shares, saving about $250 million.
On February 12th, the Senate approved Ash Carter as defense secretary with an overwhelming final tally of 93-5. John McCain praised Dr. Carter and spoke to his experience improving the financial management of the defense department as well as his work eradicating sequestration. Carter’s first day on the job will be February 17th and is expected to tap current Air Force Undersecretary Eric Fanning as chief of staff and U.S. Army Major General Ron Lewis as senior military adviser.
Government Technology Solutions Update
The General Services Administration (“GSA”) released a Request for Information (“RFI”) on February 11th to explore strategies to aid Federal agencies in the acquisition of cloud computing services. GSA is researching the types of contract vehicles used to acquire cloud services as well as the barriers that impede the agencies from staying current on technology changes. GSA is looking to improve its two cloud BPAs for Infrastructure-as-a-Service (“IaaS”) and Email-as-a-Service (“EaaS”) by including a need for professional services to help with planning and migration efforts.
The chief counterterrorism advisor to the President, Lisa Monaco, announced the launch of the Cyber Threat Intelligence Center (“CTIC”) on February 10th. The CTIC, modeled after the National Counterterrorism Center, will lead coordinated cyber threat assessments of intelligence collected by authorities and ensure that threat information is shared rapidly with cyber centers throughout the government. Monaco said that the CTIC will complement the Cyber Response Group (“CRG”), the interagency group that coordinates the Federal response to cyber threats, and enable it to work more effectively.
VSE Corporation (Up 7.0%) – Shares were up this week after the Company’s acquisition of four aerospace companies passed the Department of Justice’s Hart-Scott-Rodino requirements.
Accenture Federal Services agreed to acquire Agilex Technologies, Inc., a provider of digital solutions for the U.S. Federal Government. Terms of the deal were not disclosed.