This week, U.S. Representative Buck McKeon, a California Republican and chairman of the House Armed Services Committee, proposed a new legislation that reduces the federal workforce in order to offset one year of sequestration. The bill calls for a ten percent reduction in the federal workforce, including civilian employees and bases across the country, over the next ten years through the process of attrition.
The reduction would generate $127 billion, of which $55 billion would pay for the first year of defense cut under sequestration, another $55 billion could cover the nondefense cuts required and the remaining $17 billion would be available for the deficit reduction. The plan gives the Pentagon more time to plan for sequestration cuts, which are scheduled to begin in January 2013.
After nearly nine years of war, U.S. forces formally finalized their mission in Iraq. Just over 4,000 U.S. soldiers are currently stationed in Iraq and scheduled to depart in the upcoming days. After tens of thousands of Iraqi deaths, over 4,500 U.S. deaths, and many more wounded, the U.S. made what Defense Secretary Leon Panetta called “one of the most complex logistical undertakings in U.S. military history” by pulling out of Iraq. As an end result, Iraq now has a parliament and regular elections, and is ruled by a Shiite-led government that replaced Saddam’s Sunni-dominated regime.
ICF International to acquire Ironworks Consulting, LLC, a provider of technology and interactive solutions for $100 million. The acquisition expands ICF’s range of implementation service offerings and adds complementary capabilities. Ironworks is expected to have revenues of $57 million in FY2011, representing a deal multiple of 1.35x revenue.
L-3 Communications to acquire Kollmorgen Electro-Optical (KEO), a manufacturer of specialized equipment, including submarine photonics systems and periscopes, ship fire control systems, visual landing aids, ground electro-optical and sensor-cueing systems for $210 million. The acquisition expands and broadens L-3’s base in the EO/IR market, a key strategic growth area for the company. KEO is expected to have FY2012 sales of $160-170 million and EBITDA of $26-30 million, representing a deal multiple of up to 1.24x revenue and 7.0x EBITDA.
Hobson PLC acquired Intelliworks, Inc., a provider of relationship management and marketing software for higher education for $13 million. The acquisition will help Hobson deliver more value to the clients by blending the expertise and product knowledge of two proven industry leaders. Intelliworks is expected to have FY2011 revenues of $5 million, representing a deal multiple of 2.60x revenue.
GeoEye, Inc. (Up 23.6%) – Shares are up this week after the filing of a Form 4 with the SEC late Thursday which disclosed a notable insider buyer. Cerberus Capital Management founder Stephen Feinberg, GeoEye’s third-largest shareholder, bought 432,500 shares of GeoEye common stock.
Finmeccanica SpA (Down 15.3%) – Shares are down this week after the company’s chief executive of the Selex Sistemi Integrati unit, Marina Grossi, resigned in the wake of a long-running corruption probe.
Innovative Solutions Support, Inc. (Down 12.0%) – Shares are down this week after the company reported fourth-quarter earnings of $12,000 as compared to earnings of $1.3 million in the same period last year. Revenues were $6.5 million as compared to $7.5 million in the comparable quarter a year ago.