Week in Review

Industry Week in Review – February 24, 2012

AerCap Holdings NV, which own 350 planes and is the third largest global leasing company in the world, issued a warning this week that Airbus and Boeing are building too many planes. Both Boeing and Airbus are boosting output by about 40% over the next two years, citing demand from emerging markets and the need for developed-nation carriers to replace their aging fleets.

However, Aengus Kelly, chief executive of AerCap Holdings, believes that “clearly there is a vast amount of over-ordering.” In reference to Lion Air of Indonesia, Kelly asked, “is it realistic that a small airline in Indonesia is the largest customer of the world’s largest exporter?” Lion Air’s order for 230 planes, at list prices, is valued at $22.4 billion.

Although executives of both suppliers and airlines are rationalizing the record orders seen over the past 12 months by soaring domestic and regional demand in Europe and Asia, Aengus Kelly doubts whether some big deals, such as Lion Air’s, will ever be realized in full.

Big Movers

Finmeccanica SpA (Up 5.3%) – Shares rose this week after the company announced its objective to sell assets worth roughly €1 billion ($1.3 billion) with an intent to strengthen its financial structure.

Dynamics Research Corp. (Down 15.7%) – Shares fell this week after the company announce FY2012 expected earnings per share (“EPS”) to be in the range of $1.06 to $1.14, and revenue and EBITDA to be in the range of $353 to $363 million and $37 to $39 million, respectively. Analysts had been expecting FY2012 EPS of $1.41 and revenue and EBITDA of $399 million and $45 million, respectively.

Relevant Transactions

NetStar-1, a portfolio company of Lake Capital, has merged with Whitney, Bradley and Brown Inc., a management consulting firm focused on business transformation, organizational realignment, and process improvement. The combined company will operate under the Whitney, Bradley and Brown name and will have over $130 million in revenue. KippsDeSanto & Co. acted as financial advisor to Whitney, Bradley and Brown in this merger. Terms of the deal were not disclosed.

Salient Federal Solutions, Inc. to acquire ATS Corporation, a provider of software and systems development, systems integration, and IT infrastructure and outsourcing primarily to government agencies in the United States, for $3.20 per share or around $73 million. Salient expects to build on ATSC’s offerings and relationships and help them address the many immediate customer requirements for delivery of rapid solutions

Logistics Management Institute acquired Belzo, Inc., a provider of IT project management and logistics services, for an undisclosed amount. The acquisition is expected to expand LMI’s Southeast Region presence.

Dell Inc. acquired AppAssure Software Inc., a developer of backup and replication software for Windows Server, Hyper-V, VMware, and Microsoft Exchange, among others. The acquisition will allow Dell customers to modernize their data protection strategies and keep up with the pace of their organization. Terms of the deal were not disclosed.

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