Aerospace & Defense Update
On Tuesday, Director of the U.S. Air Force’s Rapid Capabilities Office (“RCO”), Randall Waldren, discussed the progress of the B-21 Raider, a stealth bomber developed by Northrop Grumman. The B-21 is designed to be nuclear-capable and able to fly manned and unmanned missions. The B-21 program work began in February of 2016 and has garnered $13.5 billion in funding through 2022, making it the Air Force’s largest development program. Per Director Waldren, the Air Force plans to deliver the heavy bomber on cost, requiring minimal schedule delays with a production target of 100 bombers that will enter service in the mid-2020s. The B-21 program will enter the critical design review phase in 2018 with the eventual goal of replacing the Boeing B-1, B-52, and Northrop B-2 fleets.
The National Aeronautics and Space Administration (“NASA”) and international partners are planning to release an international space exploration document in early-2018, detailing updated plans for human missions to the moon and Mars. The document has a roadmap laying out a three-phase plan for the exploration efforts and emphasizes the role of NASA’s Deep Space Gateway. Phase 0 will entail ongoing research and testing on the International Space Station, and Phase 1 will occur in the 2020s with plans for international agencies to explore the lunar vicinity. During Phase 1, NASA would work with various partners to construct the Deep Space Gateway from which robotic missions would be deployed to explore the lunar surface and prepare for human lunar missions. In preparation, NASA has already awarded contracts to Boeing, Lockheed Martin, Orbital ATK, Sierra Nevada Space Systems, and Space Systems Loral to develop a module to power the Deep Space Gateway throughout its lunar orbit. Ultimately, Phase 2 plans for agencies to send exploration missions to orbit Mars in the 2030s.
Government Technology Solutions
Less than two weeks after the General Services Administration (“GSA”) awarded 61 companies positions on its $50 billion Alliant 2 contract, five companies filed protests against the government’s decision. Two of the protestors, Harris IT Service Corp. and Kratos Technology and Training solutions, were incumbents on Alliant 1. The other protestors are Compuline International, the Centech Group, and Capgemini Government Solutions. Given the size and importance of Alliant 2, as well as the history of protests associated with the first iteration of the contract back in 2007, it was expected that the government would receive numerous protests regarding this contract award. The original Alliant contract experienced delays of more than a year as a result of various protest activities. The Government Accountability Office has until March of 2018 to make a determination on the protests.
The growing popularity of blockchain has encouraged government agencies to explore practical applications for implementing this innovative technology. Analysts expect blockchain to be introduced into mainstream government processes similarly to how cloud computing was introduced. However, government agencies are moving much more quickly and independently towards adopting blockchain as compared to cloud computing many years ago. Due to the government’s reliance on legacy systems, blockchain will be used to support and augment such systems with the goal of improving overall functionality, as opposed to replacing legacy systems. In the near-term, the government aims to incorporate private blockchains to improve privacy and operating efficiency.
Honeywell (up 3.2%) – Share prices were up this week after reports stated the company is looking to acquire Arconic Inc.
L3 Technologies (up 2.9%) – Share prices were up this week after the company appointed several key executives to start in the beginning of next year.
ABSS Solutions, Inc. has acquired 1st American Systems and Services, LLC, a provider of technical and professional services, supporting the design, integration, and management of program solutions related to business operations, advanced learning, information technology, health care IT, and engineering services. Terms of the deal were not disclosed.
AE Industrial Partners, LLC has agreed to acquire EnCore Composites Holdings, Inc., a provider interior cabin and composite and other lightweight products for the aviation industry. Terms of the deal were not disclosed.
CapitalWorks, LLC has acquired GEMCITY Engineering, a provider of advanced automated equipment, complex assemblies, robotics, and high precision machining. Terms of the deal were not disclosed.
Hartzell Engine Technologies, LLC has acquired Meggitt’s South Wind Aircraft Heater Business, a provider of combustion heating solutions for South Wind Aircraft. Terms of the deal were not disclosed.
Microsemi Corp. has acquired the High Performance Timing Business of Vectron International, a provider of frequency control, sensor and hybrid solutions using both bulk acoustic wave and surface acoustic wave-based designs. The deal is worth an estimated $130 million.
Thales S.A. has acquired Aveillant, a provider of holographic radar technology ideal for drone surveillance. Terms of the deal were not disclosed.
Tinicum L.P. has acquired Astrodyne TDI, a provider of specialized power solutions for demanding applications in the advanced military, aerospace, medical, and industrial markets worldwide. Terms of the deal were not disclosed.