Week in Review

Industry Week in Review – September 9, 2011

As General Ray Odierno began his first week as Army chief of staff, he dove head first into the increasingly hot topic of U.S. troop drawdown in Iraq.  With 46,000 U.S. forces currently deployed, mostly in advisory roles, significant drawdown must occur before the end of this year. The current security agreement with the Iraqi government calls for all American troops to pull out by the end of the year; however, lawmakers and senior officials are debating over how many troops will actually remain into 2012. Defense Secretary Leon Panetta endorsed a tentative plan for a force of 3,000 to 4,000 troops, but, other defense officials believe that that number should be closer to 10,000.

Although Odierno has not officially stated how many troops he believes should remain, he does believe that, “there comes a time…when [U.S. presence] becomes counter-productive” and the number of troops feeds the perception of an American “occupation.” Currently, he and other U.S. officials are looking to shift some tasks currently performed by American troops in Iraq to private contractors. In the end, however, the final decision about the size of a post-2011 force in Iraq would be up to the Iraqi government, U.S. leaders and military commanders.

Notes on some big movers

Globecomm Systems Inc., (Up 9.8%) – Shares are up this week after Globecomm announced the Company has been awarded two contracts valued at $66.6 million with options. Globecomm expects EPS of $0.73 to $0.83 this year.

Shaw Group, (Up 6.2%) – Shares are up this week after the company confirmed plans to sell its 20% stake in Westinghouse Electric Co. back to Toshiba Corp, a move that will eliminate about $1.7 billion of Shaw’s debt.

GKN Plc., (Down 8.0%) – Shares are down after a volatile week in the company’s stock price. The volatility stems from the company’s acquisition of Stromag Holding GmbH, a provider of mechanical drive components and accessories for use in industrial machinery, crane equipment and trucks.

Notes on some relevant transactions

Xceedium, Inc. to acquire Irdeto B.V. Cloakware Password Management Business, a provider of dynamic security and monetization technologies, and new forms of distribution for broadcast, broadband, and mobile entertainment, as well as, app, eStores and consumer devices. The acquisition allows Xceedium to provide corporate, government and critical infrastructure organizations new abilities to safeguard important data from insider threats and to meet compliance requirements. The terms of the deal were not disclosed.

KS International, LLC, a portfolio company of DC Capital Partners, LLC, to acquire Project Management Service, Inc. (“PMSI”), a specialized provider of engineering and construction management consulting services to both federal and state government agencies, for an undisclosed amount. The acquisition of PMSI will significantly enhance KS International’s engineering and technical services capabilities and expand its market position.

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