Industry Week in Review – October 11, 2019

KippsDeSanto & Co. Industry Week in Review – October 11, 2019

Industry Week in Review – October 11, 2019

M&A Transactions

Astronics Corporation has acquired Diagnosys Test Systems Limited, a provider of testing, support, and repair of high-value electronics, electro-mechanical, pneumatic, and printed circuit boards in the global mass transit and defense markets. The transaction was valued at $7.0 million.

DC Capital Partners, LLC has acquired Tresys Technology Holdings, Inc., a provider of cyber security products, services and solutions for government and critical infrastructure applications, specializing in highly sensitive and classified environments. The terms of the deal, which closed in August, were not disclosed.

Dedrone Holdings, Inc. has acquired the assets and intellectual property associated with the DroneDefender program of Battelle Memorial Institute, a provider of counter-sUAS technology solutions for end-to-end sUAS threat detection and mitigation solutions for the U.S. federal departments and agencies including the DoD. Terms of the transaction were not disclosed.

Ducommun, Inc. has acquired Nobles Worldwide, Inc., a portfolio company of Levine Leichtman Capital Partners, a provider of ammunition handling systems to key aircraft, naval, and ground-vehicle platforms for the U.S. armed forces and its allies. The transaction was valued at $77 million.

Hensoldt Holding GmbH, a portfolio company of KKR & Co. L.P. has acquired IE Asia-Pacific Pty Ltd, a subsidiary of Intersoft Electronics BVBA, a provider of radar solutions and services to the Australian Defense Force and other agencies, specializing in radar support, testing, training, and installation services. Terms of the transaction were not disclosed.

Qorvo, Inc. has acquired Cavendish Kinetics, Inc., a provider of high-performance RF MEMS technology for antenna tuning applications. Terms of the transaction were not disclosed.

TECT Aerospace, Inc., a portfolio company of Stony Point Group, has agreed to acquire assembly operations of Triumph Group, Inc. based in Nashville, TN, a provider of long and large machining, processing, and large-scale assembly. Terms of the transaction were not disclosed.

Capital Raising Transactions

RapidSOS, Inc., a New York-based emergency technology company, announced the closing of a $55M Series B funding round led by Energy Impact Partners (“EIP”). RapidSOS currently connects more than 250 million Americans directly to 3,500+ local 911 and first responder agencies – transmitting real-time health and medical information, vehicle telematics, multimedia, building sensor data, and more in an emergency.

SparkCognition Inc., a global artificial intelligence (“AI”) leader that builds AI technology to advance the most important interests of society, announced the closing of its Series C funding of $100 million led by March Capital Partners. Other investors include companies across multiple industries, including Boeing HorizonX, Hitachi High-Technologies, Hearst Ventures, and many others.

Satelles Inc., a Reston, Va.-based provider of satellite-based time and location services, has announced raising $26 million in Series C funding. C5 Capital led the round and was joined by Iridium Communications and existing investors.

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Industry Week in Review – October 4, 2019

KippsDeSanto & Co. Industry Week in Review – October 4, 2019

Industry Week in Review – October 4, 2019

Transactions

ASGARD Partners & Co., LLC has acquired Revision Military Ltd., a provider of protective eyewear solutions for military and tactical use. Terms of the transaction were not disclosed.

BioNovelus, Inc. has agreed to acquire Corvus Consulting, LLC, a provider of scientific, engineering, technical, operational support, and training services to Federal and commercial clients. Terms of the transaction were not disclosed.

kSARIA Corporation, a portfolio company of Behrman Capital, has acquired Co-Operative Industries Aerospace & Defense, a manufacturer of electrical wiring harnesses, ignition leads, and flexible metal conduits for various aerospace and defense customers. Terms of the transaction were not disclosed

Midwest Composite Technologies, Inc., a portfolio company of CORE Industrial Partners, LLC, has acquired FATHOM, a provider of additive manufacturing services including fused deposition modeling, multi jet fusion, polyjet printing, selective laser sintering, and stereolithography, along with CNC machining, urethan casting, tooling and injection modeling capabilities. Terms of the transaction were not disclosed.

QinetiQ Group plc has agreed to acquire Manufacturing Techniques (“MTEQ”), Inc., a provider of advanced sensor development, rapid prototyping operations, and C5ISR capabilities to the U.S. Army and Navy. The transaction was valued at an estimated $105 million.

Trimble Inc. has agreed to acquire Azteca Systems, LLC (dba “Cityworks”), a provider of geographic information system (“GIS”)-based enterprise asset management (“EAM”) and supply chain management (“SCM”) software and Software as a Service (“SaaS”) for utilities and local government / public sector (e.g., local municipalities, parks and recreation, planning and community development, public works, and streets, traffic and transportation). Terms of the transaction were not disclosed.

VT Group, Inc., a portfolio company of The Jordan Company, has agreed to acquire DELTA Resources, Inc., a provider of C5I and weapons systems engineering, integrated product support, and a full spectrum of technical services to the Naval Sea Systems Command (“NAVSEA”) and the Navy’s Program Executive Offices (“PEOs”). Terms of the transaction were not disclosed. KippsDeSanto & Co. served as the financial advisor to DELTA Resources, Inc.

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Industry Week in Review – September 27, 2019

KippsDeSanto & Co. Industry Week in Review – September 27, 2019

Industry Week in Review – September 27, 2019

Transactions

By Light Professional IT Services, Inc., a portfolio company of Sagewind Capital, LLC, has agreed to acquire Cole Engineering Services Inc., a provider of simulation-based training, gaming, support, and technical solutions. Terms of the transaction were not disclosed.

Centauri Corporation has acquired Kord Technologies, Inc., a provider of engineering, information technology, and programmatic support services to defense and civilian agencies. Terms of the transaction were not disclosed.

Commercial Vehicle Group, Inc. has acquired First Source Electronics, LLC, a provider of manufacturing solutions for end-products that are often deployed in extreme environments and have a high cost of failure, such as high-performance assemblies for tactical military communications, industrial material handling systems, and electronic braking systems for railway trains. The transaction was valued at an estimated $34 million.

EnerSys Inc. has acquired Northstar Battery Company, LLC, a provider of battery technology and energy storage solutions with its major operations, consisting of two production facilities, located in Springfield Missouri. The transaction was valued at an estimated $182.5 million.

Greenbriar Equity Group, L.P., has acquired Arotech Corp., a provider of training and simulation for air warfare, vehicles, and use-of force. They also provide maintenance services in connection with these systems. The transaction was valued at an estimated $80.8 million.

Jet Support Services, Inc. has acquired Tracware, Ltd., a provider of maintenance and business process control SaaS and related systems integration services for the aviation sector globally. Terms of the transaction were not disclosed.

Montagu Private Equity, LLP has agreed to acquire Jane’s Information Group, a subsidiary of IHS Markit, Ltd., and a provider of online subscription-based open source business intelligence data analysis reports for businesses in the aerospace, defense, and security industries. The transaction was valued at an estimated $470 million.

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Industry Week in Review – September 20, 2019

KippsDeSanto & Co. Industry Week in Review – September 20, 2019

Industry Week in Review – September 20, 2019

Transactions

Advanced Core Concepts, LLC, a portfolio company of Battle Investment Group, has agreed to acquire Universal Technology Corporation, a provider of electromagnetic spectrum management solutions, automation technology, software engineering, and data analytics to the national security community. Terms of the transaction were not disclosed.

ANSYS, Inc., has acquired Livermore Software Technology Corporation, a provider of explicit dynamics and other advanced finite element analysis technology. Terms of the transaction were not disclosed.

CAMP Systems International, Inc., a subsidiary of Hearst Communications, Inc., has agreed to acquire Inventory Locator Service, LLC., a subsidiary of The Boeing Co., and provider of the largest electronic marketplace for the aviation industry to buy and sell parts, equipment, and services. Inventory Locator Service also offers manufacturers and parts suppliers ways to improve inventory planning and processing. Terms of the transaction were not disclosed.

Enlightenment Capital has made a strategic investment in Expression Networks, LLC, a provider of software engineering and data analytics supporting mission planning in the national security community. The investment was made through Enlightenment Capital’s SBIC Fund, L.P., which closed in May after securing $72.3 million in commitments.

iDirect Government, LLC, a subsidiary of ST Engineering, has acquired Glowlink Communications Technology, Inc., a provider of solutions that mitigate satellite interferences and improve the quality of satellite communications. The deal is valued at an estimated $20 million.

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Industry Week in Review – September 13, 2019

KippsDeSanto & Co. Industry Week in Review – September 13, 2019

Transactions

Anduril Industries, Inc., a provider of border control technology including drones and towers which track movement using artificial intelligence, has secured a funding round that values the company at more than $1 billion and includes participation from Andreesen Horowitz.

BAE Systems plc has acquired Prismatic Ltd., a provider and developer of new and improved UAV systems and services. Terms of the transaction were not disclosed

dB Control, a subsidiary of HEICO Corporation, has acquired TTT-Cubed, Inc., a provider of cutting-edge RF Sources, Detectors, and Controllers for a certain wide range of aerospace and defense applications. Terms of the transaction were not disclosed.

Dinocrates Group has acquired Global Management Systems, Inc., a provider of local area network (LAN), operational support, configuration management, telephone data management, and voice over IP (VOIP) services to defense and civilian agencies, as well as commercial customers. Terms of the transaction were not disclosed.

Precision Aviation Group, Inc., a portfolio company of GenNx360 Capital Partners, has acquired Momentum Services Corporation, a provider of global service solutions for commercial and military aviation displays of all sizes with significant cost savings, high-yield, and minimum turn time. Terms of the transaction were not disclosed.

Raptor Scientific, LLC, a portfolio company of L Squared Capital Partners, LLC, has acquired Space Electronics, LLC, a provider of electronic circuit testers that are used by aerospace and defense OEMs. Terms of the transaction were not disclosed.

Red River Technology, LLC, Inc. has acquired CWPS, Inc., a provider of managed information technology (IT) and IT support services to commercial enterprises and government sectors. Terms of the transaction were not disclosed. KippsDeSanto & Co. served as the financial advisor to CWPS, Inc.

Saturn Satellite Networks, Inc., a subsidiary of Airspace Internet Exchange, has acquired NovaWurks, Inc., a provider and developer of modular satellites. Terms of the transaction were not disclosed.

Susquehanna Private Capital, LLC has acquired McNally Industries, LLC, a provider of precision systems for the defense and industrial markets primarily supporting new and legacy platforms. Terms of the transaction were not disclosed. KippsDeSanto & Co. served as the financial advisor to McNally Industries, LLC.

Tenex Capital Management, L.P. has agreed to acquire Allied Wire & Cable, Inc., a provider of specialty manufacturing and value-added distribution of wire and cable products for aerospace, government, military, and telecommunications markets among others. Terms of the transaction were not disclosed.

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Industry Week in Review – September 6, 2019

KippsDeSanto & Co. Industry Week in Review – September 6, 2019

Industry Week in Review – September 6, 2019

Transactions

AE Industrial Partners, LLC has acquired Triman Industries, Inc., a provider of highly engineered products and services to the global military aftermarket in support of a variety of mission critical air, land, and sea applications. Terms of the transaction were not disclosed.

AMETEK, Inc. has acquired Pacific Design Technologies, Inc., a provider of advanced, mission-critical thermal management systems and components used in a broad set of current and next-generation commercial aerospace, defense, and space platforms. The transaction is valued at an estimated $125 million.

CAE, Inc. has acquired a 50 percent stake in SIMCOM Holdings, Inc., a provider of advanced aviation training services to professional pilots, owner-operators, Part 135 operators, and maintenance personnel operating in general aviation, regional, military, government, and cargo operations around the world. The transaction is valued at an estimated $170 million.

CGI, Inc. has acquired Sunflower Systems, LLC, a provider of asset management software and services that enable organizations to improve decision making, accountability and regulatory compliance for all types of assets including personal and real property, fleet, IT assets, materials and more. Terms of the transaction were not disclosed.

Digital Intelligence Systems, LLC (DISYS) has agreed to acquire ALTEK Information Technology, Inc., a provider of responsive IT services and solutions to clients in both the public and private sector, most notably in the healthcare industry. Terms of the transaction were not disclosed.

Dovel Technologies, Inc., a portfolio company of Macquarie Capital, has acquired Ace Info Solutions, Inc., a provider of software and systems engineering, information technology infrastructure, information assurance, healthcare information technology, and administrative and personnel solutions to federal civilian and defense agencies. Terms of the transaction were not disclosed. KippsDeSanto & Co. served as the financial advisor to Ace Info Solutions, Inc.

OpenGov, Inc. has acquired ViewPoint Government Solutions, Inc., a provider of multi-tenant SaaS software for permitting, licensing, and code enforcement operations to state and local governments. Terms of the transaction were not disclosed. The deal comes on the heels of OpenGov’s closing of its Series D financing round, in which it raised $51 million from Weatherford Capital and 8VC, with additional funding from prior investor Andreesen Horowitz.

Pattonair Ltd., a portfolio company of Platinum Equity, LLC, has acquired Adams Aviation Supply Co Ltd., a provider and distributor of parts and accessories for general and business aviation. Terms of the transaction were not disclosed. The deal comes on the heels of Pattonair’s pending $1.9 billion acquisition of Wesco Aircraft Holdings, Inc., a provider of comprehensive supply chain management services to the global aerospace industry.

Sev1Tech, LLC has acquired Engineering Solutions and Products, LLC, a provider of support services to the U.S. Army in the areas of systems engineering and integration, logistics and supply chain management, mission and program support, training and readiness, as well as information technology and cybersecurity. Terms of the transaction were not disclosed.

 

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Industry Week in Review – July 26, 2019

KippsDeSanto & Co. Industry Week in Review – July 26, 2019

Industry Week in Review – July 26, 2019

Aerospace & Defense Update

Congressional leaders have agreed to a two-year debt and budget deal, ensuring spending stability and avoiding a potential partial government shutdown.  The deal includes $1.37 trillion in agency spending for GFY2020, with a slight increase for GFY2021.  Defense spending is expected to increase to $738 billion next year, and the deal includes flexibility in transferring money between accounts.  The amount represents a compromise between congressional Republicans and Democrats while ensuring the federal government will avoid its first-ever default on U.S. payments.  The deal was chiefly negotiated by the Speaker of the House, Nancy Pelosi, and the Treasury Secretary, Steven Mnuchin.  In addition to avoiding a federal default, the agreement will help prevent automatic spending cuts from hitting the Pentagon.

The Senate voted 90-8 to confirm Mark Esper as Secretary of Defense, completing a lengthy process to fill the top position in the Pentagon.  The office has been filled on an interim basis since former chief, Jim Mattis, resigned in December, and Esper’s confirmation ends the longest period in Pentagon history that there has not been a congressionally approved leader.  Esper takes charge at a time of heightened tensions with Iran, while many top civilian posts still remain vacant.  The position of Secretary of Defense had been filled by three acting secretaries since Mattis’ resignation, including Esper.  Esper is a military veteran and a graduate of West Point, and has made his career as a lobbyist for defense company Raytheon as well has holding various policy advisor roles on Capitol Hill.

Big Mover(s)

The Boeing Company (Down 8.6%)– Share prices fell as Boeing reported its worst ever quarterly loss in the wake of their announced $4.9 billion charge related to the 737 MAX groundings. Additionally, the Company announced they would not submit a bid on the upcoming Ground-Based Strategic Deterrent missile program from the Pentagon.

Northrop Grumman Corporation (Up 9.4%) – Share prices increased as quarterly earnings beat expectations by 9%. The Company is also expected to win the Ground-Based Strategic Deterrent contract to replace the Minuteman 3 intercontinental ballistic missile after Boeing announced they would not submit a bid.

Transactions

Advent International has agreed to acquire Cobham plc, a provider of radar and other electronic products for the defense and aviation industries. The deal is valued at an estimated $5.4 billion.

ClearSky has acquired Altamira Technologies Corporation, a provider of engineering and analytic services to the U.S. federal defense, intelligence, and homeland security communities.  KippsDeSanto & Co. served as the exclusive financial advisor to Altamira.  Terms of the transaction were not disclosed. 

Eaton Corporation plc has agreed to acquire Souriau-Sunbank Connection Technologies, a provider of highly-engineered solutions for harsh environments serving customers primarily in aerospace, defense, and space end markets. The deal is valued at an estimated $920 million.

Honeywell International, Inc. has acquired TruTrak Flight Systems, Inc., a provider of autopilots for experimental, light-sport and certified aircraft. Terms of the transaction were not disclosed.

 Octo Consulting Group, Inc., a portfolio company of Arlington Capital Partners, has acquired Connexta, LLC, a provider of Open Source Software (“OSS”) solutions for global Intelligence, Surveillance, and Reconnaissance (“ISR”) data interoperability needs across the U.S. federal defense and intelligence communities.  KippsDeSanto & Co. served as the exclusive financial advisor to Connexta.  Terms of the transaction were not disclosed.

Parsons Corporation has acquired QRC, LLC, a portfolio company of DC Capital Partners and a provider of survey tools for cellular communication systems, phone based measurement systems, stimulation tools, forensic tools, and integrated RF recording and playback equipment.  The deal is worth an estimated $215 million, including a $30 million transaction-related tax benefit.

PPG Industries, Inc. has agreed to acquire Dexmet Corp., a portfolio company of Sverica Capital Management. Dexmet is a provider of specialty materials for surfaces in aerospace, automotive, and industrial applications. Terms of the transaction were not disclosed.

Systems Planning and Analysis, Inc., a portfolio company of CM Equity, has acquired Veracity Forecasting and Analysis, Inc., a provider of decision support services to the government and defense sector. Terms of the transaction were not disclosed.

Vigor Industrial LLC, a portfolio company of The Carlyle Group, has agreed to acquire and merge with MHI Holdings, LLC, a portfolio company of Stellex Capital Management. MHI Holdings is a provider of ship repair of maintenance services. Terms of the transaction were not disclosed.

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Industry Week in Review – July 19, 2019

KippsDeSanto & Co. Industry Week in Review – July 19, 2019

Industry Week in Review – July 19, 2019

Aerospace & Defense Update

This week, Boeing announced it will set aside almost $5 billion in compensation for airlines who have lost revenue as a result of the continued grounding of the 737 MAX airplane.  The amount is set to be paid out through a combination of cash and concessions, which include delivery timing, discounts, and added features and services.  The expense will also likely result in a substantial quarterly loss, as Boeing had previously projected quarterly profit to reach approximately $1.2 billion.  Airlines have lost a considerable amount of profit as they have been forced to cancel thousands of flights following the groundings, with a return to commercial flights now estimated for early 2020.  Despite the recent groundings, Boeing and its suppliers are still preparing to increase monthly production of the 737 MAX from 42 to 57 planes in the new year.

Secretary of Defense nominee Mark Esper and chairman of the Joint Chiefs of Staff nominee Mark Milley have been approved by the Senate Armed Services Committee in a set of separate votes.  This will set up a Senate confirmation hearing that will likely take place next week.  Mark Esper appears to have broad support across both sides of the aisle in the Senate, and his potential appointment should end a stretch of nearly 200 days that the Pentagon has been without permanent leadership since the resignation of Jim Mattis in January.  Esper’s confirmation will also end what has been a lengthy nomination process, which included the withdrawal of Patrick Shanahan, the former acting Secretary of Defense, from the process.

Big Mover(s)

The Boeing Company (Up 3.1%) – Share prices were up this week after the company announced that it would pay a lower than expected compensation amount of $4.9 billion to airlines as a result of delayed 737 MAX deliveries

Booz Allen Hamilton Holding Corporation (Down 3.1%) – Share prices were down this week after President and CEO of Booz Allen Hamilton Horacio Rozanski sold 31,000 BAH shares

Transactions

AE Industrial Partners, LLC has agreed to acquire Columbia Helicopters, LLC, a provider of heavy-lift rotorcraft, manufacturing, and MRO services to a variety of end markets including military support, firefighting, and on-shore oil & gas. Terms of the transaction were not disclosed.

Airbus Helicopters, a subsidiary of Airbus SE, has acquired Aersud Elicotteri S.r.l, a provider and distributer of Airbus helicopters. Terms of the transaction were not disclosed. 

Akzo Nobel N.V. has acquired Mapaero SAS, a provider of water-based and eco-friendly aerospace coatings. Terms of the transaction were not disclosed.  

Firan Technology Group Corp. has acquired Colonial Circuits, Inc., a provider of manufactured circuit boards for aerospace and defense markets. The deal is valued at an estimated $3.1 million. 

First Aviation Services Inc. has acquired Aviation Blade Services, Inc., a provider of helicopter rotor blade repair, overhaul, and modification. Terms of the transaction were not disclosed.

Saudi Arabian Military Industries has acquired Aircraft Accessories and Components Company Ltd., a provider of maintenance, repair and overhaul services for aircraft hydraulic systems and secondary energy systems for multi-platforms. Terms of the transaction were not disclosed.

Sintavia, LLC has acquired QC Laboratories, Inc., a provider of specializations in radiographic (X-ray & Gamma), fluorescent penetrant, ultrasonic, magnetic particle and eddy current inspections. Terms of the transaction were not disclosed.

XTEK Ltd. has agreed to acquired HighCom Armor Solutions, Inc., a provider of high-performance body armor, personal protective equipment, and armor systems and related accessories. The deal is valued at an estimated $2.5 million.

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Industry Week in Review – July 12, 2019

KippsDeSanto & Co. Industry Week in Review – July 12, 2019

Industry Week in Review – July 12, 2019

Aerospace & Defense Update

The White House has called for increased funding for the Next-Gen Overhead Persistent Infrared (“OPIR”) system in response to a smaller budget than previously anticipated.  OPIR satellites are a space-based early warning missile system that provide enhanced missile warning capabilities for the Space Based Infrared System.  The House Armed Services Committee (“HASC”) authorized $1 billion to the project for FY2020, approximately $400 million less than the Pentagon’s request of $1.4 billion.  The Trump administration believes delayed funding will result in increased long run costs of at least $450 million, while the HASC is concerned about the rapid budget growth in relation to the project. Northrop Grumman and Lockheed Martin have been contracted by the Air Force to build the satellites.

Following the unveiling of Airbus’s extra-long range version of its A321 aircraft, Boeing is expected to release a new comparable midmarket aircraft that will begin carrying passengers by 2025, more than two years after Airbus’s model is anticipated to hit the commercial market.  Demand for such mid-sized aircraft has increased as the development of long-range narrowbody jets will enable airlines to offer low-cost options for distances of up to 5,000 miles that previously required large, inefficient widebody planes.  This trend has put pressure on lessors, as the market for older, larger aircraft has dwindled in respect to the newer models.  Lessors, many of whom are heavily invested in the widebody aircraft sector, must adjust to the shifting market trends towards smaller, more efficient aircraft.  The change marks an improvement for both airlines and passengers, who are poised to benefit from the lower costs associated with the fuel-efficient, long-range aircraft.

Big Mover(s)

ICF International, Inc. (Up 3.7%) – Share prices were up this week after the Navy awarded ICF International a multiple award Cyber Services IDIQ contract valued up to $330 Million

Astronics Corporation (Down 4.6%) – Shares prices were down this week after it was announced that Astronics signed a definitive agreement to sell its Airfield Lighting Product Line

Transactions

 3D Plus has acquired BERNIER S.A.S, a provider of the design and manufacture of interconnected products used in demanding defense, aerospace, and industrial applications, primarily for communications-related purposes.  Terms of the transaction were not disclosed.

 Acorn Growth Companies has acquired Black Sage Technologies, Inc., a provider of the development, integration, and deployment of counter-unmanned aircraft systems (“C-UAS”) solutions which identify, classify, track, and defeat UAS threats.  Terms of the transaction were not disclosed.

ATL Partners and the British Columbia Investment Management Corporation has acquired Valence Surface Technologies, LLC, a provider of aerospace surface finishing services.  Terms of the transaction were not disclosed.

ESCO Technologies, Inc. has acquired Globe Composite Solutions, LLC, a provider of mission-critical composite-based products and solutions for navy, defense, and industrial customers.  Terms of the transaction were not disclosed.

Hughey & Phillips has agreed to acquire the airfield lighting product line of Astronics Corporation, which provides lighting products used on airfields.  Terms of the transaction were not disclosed.

ITT, Inc. has acquired Matric Composites, Inc., a provider of precision composite components for next generation aircraft, aircraft engine platforms, and defense applications.  The deal is valued at an estimated $29 million.

Kellstrom Defense Aerospace has acquired TAVCO, Inc., a provider of the design and manufacture of proprietary pneumatic controls and pressure vessels for the aerospace and defense market.  Terms of the transaction were not disclosed.

Prototek Sheetmetal Fabrication, a portfolio company of CORE Industrial Partners, has acquired Cal-X, Inc., a provider of sheet metal fabrication and precision machining services, with a focus on rapid prototyping and short-run production.  Terms of the transaction were not disclosed.

SMART Global Holdings, Inc. has acquired the embedded computing business of Artesyn Embedded Technologies, Inc., which provides embedded computing systems for original equipment manufacturers and systems integrators.  The deal is valued at an estimated $80 million.

SOS International, LLC has acquired Vykin Corp., a provider of IT and operational intelligence within the Defense, Federal, and Intelligence Community market spaces.  Vykin is certified by the National Security Agency to integrate commercial network offerings in classified environments.  The company has a presence in the Pacific and Southwest Asia regions, as well as Europe.  Vykin marks the contractor’s fourth acquisition in the past four years.  Terms of the transaction were not disclosed.

Vectrus, Inc. (NYSE:VEC) has acquired Advantor Systems Corp., a provider of integrated electronic security systems to the federal government from Infrasafe and McCarthy Capital.  Advantor is the sole source exclusive provider of integrated C3 networked services to the U.S. Forces Korea as well as the security provider of choice for the F-35 Joint Strike Fighter program with Japan’s Ministry of Defense.  “This expands Vectrus’ client and geographic footprint, allowing for greater cross-selling opportunities,” said Mr. Chuck Prow, CEO of Vectrus.  The transaction is worth an estimated $44 million and was funded by cash on hand and Vectrus’ credit facility.

 

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Industry Week in Review – June 28, 2019

KippsDeSanto & Co. Industry Week in Review – June 28, 2019

Industry Week in Review – June 28, 2019

Aerospace & Defense Update

In a lopsided 86 – 8 vote, the Senate passed a $750 billion defense authorization bill.  The $750 billion figure is approximately $17 billion larger than the $733 billion figure the House of Representative has targeted for FY2020.  The Senate’s bill includes a 3.1% pay raise for troops, an additional 6,200 service members, an allocation of $300 million in funding for military housing, and full funding of Pentagon nuclear modernization programs.  The bill passed with ease despite concerns regarding U.S.’ nuclear capabilities and the overall size of the budget.  Proponents tout the bill as continuing efforts to expand and modernize the military to counter growing geopolitical threats.  The House of Representatives plan to vote on its version of the bill next month and inter-chamber negotiations are expected to follow thereafter.

Due to the unearthing of additional software problems in Boeing’s 737 MAX airplane, the Company anticipates the aircraft’s grounding to extend through September.  This delay further disrupts flight schedules for many airlines, as it was previously expected the aircraft would be cleared for service by the end of August.  Airlines including Southwest, American, and United have removed the MAX from their schedules through September and have not committed to a timeline beyond that.  Boeing’s shares closed down 3% in the wake of the news.  The FAA has insisted that there is no specific timeline on returning the MAX to service, and that clearance will not be granted until their all maintenance checks and safety concerns have been fully investigated and resolved.

Big Mover(s)

Raytheon Co. (Down 5.1%) – Shares prices were down this week due to criticism from United Technologies Corp. (“UTC”) shareholders over the rationale behind the merger of UTC and Raytheon.

Triumph Group (Up 21.4%) – Share prices were up this week in response to Triumph’s announcement that it will begin supporting Mitsubishi’s SpaceJet M100 program.

Transactions

Accenture plc (NYSE:ACN) has agreed to acquire BCT Solutions, a technology consultancy that specializes in Command and Control, Cybersecurity, Cyber Defense services and expertise, supporting the delivery of Defense, National Security, and Public Safety mission-support capabilities. Terms of the transaction were not disclosed.

AerSale, Inc. has acquired Qwest Air Parts, Inc., a provider of aircraft dismantlement and the refurbishment and resale of used serviceable materials. Terms of the transaction were not disclosed.

Bromford Industries Limited, a portfolio company of Liberty Hall Capital Partners, acquired Accrofab Limited, a provider of complex fabricated and machined engine bracketry for the global aerospace industry. Terms of the transaction were not disclosed.

METIS Solutions, LLC, a portfolio company of Blue Delta Capital Partners, has acquired Pluribus International Corp., a provider of counterintelligence, critical infrastructure protection, all-source analysis, and other mission-focused support services to the IC, Department of Defense, and other national security clients.  Terms of the transaction were not disclosed.

Mitsubishi Heavy Industries Ltd. has agreed to acquire the CRJ regional jetliner program of Bombardier, Inc., which provides maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft. The deal is worth an estimated $570 million.

Novaria Group, a portfolio company of Rosewood Private Investments and Tailwind Advisors, has acquired Acra Aerospace, LLC, a provider of the design, development, and manufacture of complex engine components. Terms of the transaction were not disclosed.

Saudi Arabian Military Industries, a subsidiary of the Saudi Arabian sovereign wealth fund, has agreed to acquire Advanced Electronic Company, a provider of the design, development, manufacture, maintenance, and repair of several advanced industry and military electronic systems, devices, and equipment. Terms of the transaction were not disclosed.  

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