Industry Week in Review – May 13, 2011
On Thursday, Secretary Gates stated that the air war in Libya has cost the U.S. approximately $750 million to date, more than the $604 million the Pentagon had initially anticipated. Earlier in the week, the House Appropriations Committee announced plans for $121 billion in additional cuts in federal programs for 2012, including an $8.9 billion reduction in defense funding. The tightening budget environment has led to Deputy Defense Secretary William Lynn stressing the need for “targeted research and development” over the next decade, with a focus on “crucial technology areas” such as unmanned aircrafts, cyber tools, and long-range strike forces.
Notes on some big movers:
EADS (Up 7.7%): Shares rose for the week despite the Company reporting a 1Q11 net loss of €12 million, compared to a net profit of €103 million a year ago; Despite the decrease in net profit (impacted by a negative dollar accounting revaluation), the Company reported a 10% rise in revenues to €9.9 billion, EBITDA of €589 million, and a successful market introduction of the A320neo
GlobeComm Systems Inc. (Up 11.2%): Shares rose for the week as the Company reported that it has hired JPMorgan to advise on a possible sale that could potentially value the Company at $22 per share (shares were trading at $14.26 COB Friday)
Triumph Group, Inc. (Up 11.2%): Shares rose for the week as the Company reported record FY11 results on Monday; Net sales rose 124% to $2.9 billion, organic grew to 8%, and income from continuing operations increased 79% to $152.4 million, or $6.42 per diluted share
Notes on some relevant transactions:
SELEX Galileo, announced on Thursday that it has acquired Unmanned Technologies Research Institute (“UTRI”), a provider of innovative mini-micro UAS for defense and homeland security purposes. The acquisition will allow SELEX to further reinforce its UAS capability by leveraging the growing mini-micro market.
Fulcrum IT announced on Monday that it has acquired Information Technology Group (“ITG”), a provider of IT services to the DoD and Intelligence Community. The acquisition furthers Fulcrum’s growth in such markets and expands its cybersecurity, software development, and data management capabilities.
AMETEK, Inc. announced on Monday that it has acquired Coining Holding Company, a leading supplier of custom-shaped metal preforms, microstampings, and bonding wire solutions for interconnect applications in microelectronics packaging and assembly, for $148 million in cash. Coining has estimated annual sales of approximately $65 million (2.28x), and will join recently acquired Avicenna Technology in AMETEK’s Engineered Materials, Interconnects and Packaging Division.