Industry Week in Review – March 4, 2011
U.S. markets fell sharply Friday as the continued unrest in Libya and news of protests planned in Saudi Arabia pushed gas prices above $104 a barrel, negating much of the rally seen Thursday that was a result of the anticipated jobs report, which stated the economy added 192,000 jobs in February and the unemployment rate fell to 8.9%. Fears of a government shutdown were put to rest for the time being as President Obama signed legislation late Wednesday night that will keep the government funded and running for another two weeks through March 18. The bill easily passed through the House by a 335 to 91 vote and the Senate by a 91 to 9 vote, but unlike other short-term spending measures, the continuing resolution included $4 billion in funding cuts.
None of the funding cuts are taken from DoD programs, but the possibility of a year-long continuing resolution continues to exist, which would cut more than $60 billion from the remainder of the FY2011 budget, as well as create a $23 billion shortfall in the defense budget and preclude many contract starts. In other news, EADS announced on Friday that it would not appeal the U.S. Air Force’s decision to award the major tanker contract to rival Boeing, as Ralph Crosby, Chairman of EADS North America stated “The acquisition architecture for this procurement … was quite mechanistic and mathematical. The outcome was decided by price, and Boeing’s offer was at a lower price than ours.”
Notes on some big movers:
- Astronics Corp. (Up 11.6%)
- Global Defense technology & Systems, Inc. (Up 42.3%)
- CIBER Inc. (Up 17.8%)
- KBR, Inc. (Up 7.9%)
Notes on some relevant transactions:
- Precision Aviation Group announced on Thursday the acquisition of Gardner Aviation Specialist
- GTEC announced on Thursday that it has entered into a definitive agreement to be acquired by Ares Management LLC
- BBA Aviation announced on Wednesday that its Legacy Support business, part of the Aftermarket Services and Systems division, has reached an agreement to acquire GE Aviation Systems’ legacy fuel measurement business for a cash consideration of $62.5 million
- Salient Federal Solutions announced on Wednesday the acquisition of Command Information and its wholly-owned subsidiary AnviCom
- China Aviation Industry General Aircraft Co., Ltd. (CAIGA) announced on Monday that it has entered into a definitive agreement to acquire Cirrus Industries, Inc.
- CAE announced last Friday that acquired Research Triangle Institute’s Technology Assisted Learning (“TAL”) Unit