Industry Week in Review – May 6, 2011
The big news this week was that U.S. Navy Seals entered Pakistan by a radar-evading variant of the special operations MH-60 Black Hawk helicopter and killed Osama bin Laden, who then received a burial at sea after U.S. diplomats could not find a nearby country willing to accept the body.
Notes on some big movers:
Harris Corp. (Down 9.4%): Shares fell for the week as the Company reported a decline in its 3Q11 net income despite sales rising 6%; Government spending is tightening and slowing demand for the communications and combat equipment it sells
DigitalGlobe, Inc. (Down 13.0%): Shares fell for the week as the Company lowered its FY11 revenue and EPS guidance while reaffirming its EBITDA guidance; The Company expects revenue in a range of $330 – $350 million, EPS in the range of $0.10 – $0.20, and EBITDA in the range of $223 – $243 million
Computer Sciences Corp. (Down 14.7%): Shares fell for the week as the Company announced that it probably missed its full-year sales and profit forecasts; In February, the Company forecasted earnings of $5.20 a share and sales of$16.2 billion, but now expects earnings of $4.75 a share and sales of $16.1 billion
Notes on some relevant transactions:
Esterline Corporation announced on Wednesday that it has entered into exclusive negotiations with Sagard Private Equity Partners to acquire the Souriau Group, a leading global supplier of highly-engineered connectors for harsh environments. The acquisition will enhance Esterline’s Sensors & Systems segment by category, customer, and geography, and reinforce Esterline’s existing presence in France. Esterline has agreed to pay approximately $715 million for Souriau, which expects to generate sales and EBITDA ending June 2011 of $350 million (2.04x) and $64 million (11.2x), respectively.
VSE Corporation announced on Tuesday that it has signed a definitive agreement to acquire Wheeler Bros., Inc. (“WBI”), a supply chain management company that provides vehicle parts to the U.S. Postal Service and the Department of Defense. The purchase price is $180 million in cash, with potential additional payments of up to $40 million, if certain financial targets are met during the first four years after completion of the acquisition. For the year ended September 30, 2010, WBI recorded revenues of approximately $158 million (1.14x).
KEYW Corporation announced on Monday that it has acquired Forbes Analytic Software, Inc. (“FASI”), a provider of cyber superiority solutions to the U.S. Intelligence Community. KEYW purchased all of the outstanding capital stock of FASI for $14.7 million in cash and 171,970 shares of KEYW common stock, bringing the total purchase price to approximately $16.7 million, with FASI generating 2010 revenue of approximately $12 million (1.39x).