Industry Week in Review – August 3, 2012

Boeing and Space Exploration Technologies (“SpaceX”) announced Friday that they expect to win the majority of $1 billion in federal awards for commercially-designed, manned spacecraft engineering.  NASA plans to spend between $800 million and $1 billion through the middle of 2014 for commercially-owned and operated vehicles intended to shuttle crews to and from the International Space Station. 

Three months ago, SpaceX demonstrated its ability to navigate its unmanned Dragon capsule to the International Space Station and back to earth, providing supplies to the station with nearly-flawless execution.  Sierra Nevada Corp. is expected to be the recipient of a markedly smaller, third award in the program.  If awarded the contracts, both Boeing and SpaceX plan to launch refurbished facilities at the Kennedy Space Center, which could generate thousands of new jobs and reignite the area’s economy.

Big Movers

Shaw Group Inc. (Up 47.9%) – Shares are up this week after the company announced a definitive merger agreement with Chicago Bridge & Iron Company (“CBI”).  CBI will acquire Shaw for $46.00 per share in cash and stock.

NCI, Inc. (Up 20.8%) – Shares are up this week after the company announced second quarter earnings of $0.11 per share which exceeded analysts’ consensus of $0.07 per share.  Despite beating analysts’ estimates, NCI still reported decreased revenue, operating income, and operating margin as compared to the same period last year.

Relevant Transactions

Astronics Corporation acquired Max-Viz, a leader in the design and production of enhanced vision systems (“EVS”) for the civilian and military aviation industry for $10.0 million with additional purchase consideration of up to $8.0 million if Max-Viz achieves certain revenue targets.  The acquisition demonstrates a market interest in leading technologies that enhance capabilities and performance of diverse, existing aerospace assets in dynamic ways.  Max-Viz is projecting 2012 full-year revenue in the range of $7.0 to 8.0 million.  KippsDeSanto & Co. acted as exclusive financial advisor to Max-Viz, Inc. on this transaction.

GE Aviation acquired Austin Digital, a supplier of flight operations data analysis, for an undisclosed amount.  The acquisition strengthens GE’s services offerings with integrated solutions for aviation customers around the world.  Terms of the deal were not disclosed.

Chicago Bridge & Iron Company N.V. to acquire Shaw Group Inc., a provider of construction and engineering services to a variety of industries for roughly $3 billion.  The acquisition will expand CBI’s nuclear building services and supplement CBI’s role in construction of the first nuclear reactors approved in United States since 1978.

General Dynamics acquired the Ship Repair & Coating Division of Earl Industries, LLC, a provider of maintenance, modernization, and repair to ships in specific homeport areas as well as certain classes of naval ships.  The acquisition boosts General Dynamics’ ability to compete in the growing naval ship repair market.  Terms of the deal were not disclosed.

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