Industry Week in Review – March 25, 2011
Despite the spread of unrest in the Middle East and Libya and the continued after-effects Japan must deal with from the recent natural disasters, stocks posted gains for a third straight day on Friday with the Dow rising more than 3% for the week, the S&P gaining 2.7%, and NASDAQ surging 3.7%. On Thursday it was announced that NATO had reached a “political agreement” to command the no-fly zone over Libya and was considering taking on overall responsibility, although a senior U.S. official confirmed late Thursday that NATO would be taking over all operations. The U.S. had previously been leading the coalition against Gadhafi and interpreted the U.N. Security Council’s resolution to include airstrikes on Libyan ground forces threatening the rebel stronghold of Benghazi and other areas. The shift in command comes as no surprise as President Obama has reiterated throughout the week that the U.S. would turn over control of the Libya mission to allies in a matter of “days, not weeks.” Moving forward, the U.S. role in Libya is expected to be limited to areas of unique capabilities such as refueling tankers and ISR platforms, with the possibility of naval vessels playing a role in blockading Libya against arms shipments. Elsewhere, unrest has continued to build and spread throughout the Middle East with political protests / calls for regime changes taking place in countries such as Syria, Saudi Arabia, Yemen, and Bahrain.
Notes on some big movers:
- Vector Aerospace Corporation (Up 16.7%): Shares rose for the week following the announcement that the Company has entered into an exclusivity agreement with EADS; The Canadian listed MRO company for commercial and military engines and rotorcrafts did approximately $500 million in revenue and approximately $70 million in EBITDA in 2010 and announced in November that it was exploring strategic alternatives
- Northstar Aerospace Inc. (Up 13.8%): Shares rose for the week as the Company announced that a conference call will be held for investors and analysts on Monday, March 28th, to discuss the release of its 4Q10 results
- Boeing Co. (Up 6.1%): Shares rose for the week following the broader market trend; The Company is also announced that it is expanding its GoldCare service to include the Next-Generation 737 product line, completed a contract to deliver four 737s to EL AL, the Israeli national carrier, valued at 342.3 million, and conducted a successful flight test for its 747-8 Intercontinental plane
- Cubic Corporation (Up 9.9%): Shares rose for the week as the Company announced that it received a $2.5 million contract to provide an optical data link system to the contractor team developing a new small-caliber guided weapon system for DARPA, as well as an $18.8 million contract for functional and analytical support to the U.S. Army Combined Arms Support Command’s Sustainment Battle Lab located at Fort Lee, Virginia.
- Astronics Corporation (Up 12.3%): Shares rose for the week following the broader market trend
Notes on some relevant transactions:
McAfee announced on Wednesday that it signed a definitive agreement to acquire privately owned Sentrigo, a leading provider of database security, including vulnerability management, database activity monitoring, database audit, and virtual patching, which ensure databases are protected without impacting performance or availability. The acquisition enables McAfee to extend its database security portfolio and deliver comprehensive, industry-leading solutions to serve the rapidly growing database security market, estimated to reach more than $600 million by 2012. Dave DeWalt, President of McAfee, stated “The integration of Sentrigo with McAfee will provide customers with the highest level of security across their database environments and allow companies to rapidly deploy a database security strategy in a cost-effective manner.” In addition to the acquisition announcement, McAfee announced the release of a complete database security platform which will include products from across its portfolio. The transaction is expected to close in April 2011 and financial terms were not disclosed.