Industry Week in Review – April 5, 2019
KippsDeSanto & Co. Industry Week in Review – April 5, 2019
Aerospace & Defense Update
The U.S. Army has issued a request for information (“RFI”) for a future long-range assault aircraft to replace UH-60 Black Hawk helicopters by fiscal 2030. While most of the cost requirements were not made public in the RFI, the Army does note that it wants to purchase an aircraft that will be roughly $43 million per unit. Bell and a Sikorsky-Boeing team have each built a technology demonstrator aircraft to help the Army lay out its requirements for the future aircraft. Bell’s V-280 Valor tiltrotor has been flying since December, and the Sikorsky-Boeing SB-1 Defiant flew for the first time this past month. The Army plans to present an acquisition strategy that will focus on a non-developmental approach to procuring a new long-range assault aircraft that should lead to a competitive down select by fiscal 2022 at the earliest.
Japan and South Korea both reached milestones with their Lockheed Martin F-35 Lightning II Joint Strike Fighters. The Japan Air Self-Defense Force declared initial operating capability for its first F-35 squadron this past week when the 302 Hikotai at Misawa Air Base held a ceremony to celebrate this operating capability for the F-35As. Meanwhile, neighboring South Korea welcomed the first two F-35As that same day, when the aircraft were ferried across the Pacific to an air base in Cheongju, near Seoul. South Korea has 40 F-35As on order from a 2014 contract worth about $7 billion, all of which are planned to be delivered by 2021. The first unit to operate the South Korean F-35s will be the Republic of Korea Air Force’s Cheongju-based 17th Fighter Wing.
Government Technology Solutions Update
With the launch of a federal arm, Comcast becomes the latest in a wave of larger commercial players seeking to gain a foothold in the federal market. Comcast believes the new division will provide premier telecommunications services and solutions for U.S. Government and Public Sector organizations. The move falls in line with the Company’s efforts since 2006 to “steadily move up market from (small and medium-size business) customers to mid-market to large enterprise,” according to Comcast President Bill Stemper. The deal follows Comcast’s acquisition of BluVector last month, which will bolster the global media giant’s cybersecurity, artificial intelligence and machine learning capabilities. The rise of cloud computing and systems modernization in the government is the catalyst that continues to attract these commercial investments within the federal space. Amid the introduction of large commercial enterprises like Amazon and Microsoft, government contractors continue to adapt to the increased competition by adopting novel ways of doing business.
Big Mover(s)
Maxar Technologies (Up 15.2%) – Share prices were up this week following news of Maxar partnering with Vulcan Inc. to Support Domain Awareness Systems Using EarthWatch, which plans to support projects such as bringing reliable power and connectivity to underserved areas.
Triumph Group (up 25.9%) – Share prices were up this week following news that the defense contractor won a contract from aerospace giant Boeing to supply hydraulic system components for the U.S. Navy’s MQ-25 unmanned aerial refueling program
Transactions
A subsidiary of Elbit Systems Ltd. has agreed to acquire the Night Vision Business of Harris Corp., a provider of the development, production and supply of night vision technology for the U.S. and allied military and security forces and federal homeland security market. The transaction is worth an estimated $350 million.
Aernnova Aerospace S.A. has acquired Structural Integrity Engineering, a provider of aircraft and aircraft component certification, structural design, structural analysis and materials testing. Terms of the transaction were not disclosed.
Arlington Capital Partners has made an investment in Octo Consulting Group Inc., a provider of agile software development, UI / UX, cloud, infrastructure, blockchain and infrastructure modernization solutions. Terms of the transaction were not disclosed.
BJG Electronics, Inc. has acquired Connector Tech, LLC, a provider of high-reliability electronic interconnect products serving a variety of harsh environment applications in the industrial, aerospace and military markets. Terms of the transaction were not disclosed.
Firan Technology Group Corp. has acquired an undisclosed U.S.-Based Circuit Board Company, a provider of manufacturing capacity for standard technology product for aerospace and defense applications. The transaction is worth an estimated $3 million.
Global Ordinance LLC has acquired Chemring Military Products Inc., a provider of US-standard and non-standard ammunition and weapons systems. KippsDeSanto acted as the exclusive financial advisor to eGlobalTech Inc. Terms of the transaction were not disclosed.
Tetra Tech, Inc. has acquired eGlobalTech Inc., a provider of IT solutions, cloud migration, cybersecurity, and management consulting services. KippsDeSanto acted as the exclusive financial advisor to eGlobalTech Inc. Terms of the transaction were not disclosed.
