Industry Week in Review – July 12, 2013
History was made at sea as the Northrop Grumman X-47B became the first unmanned jet aircraft to land on an aircraft carrier. After taking off from Patuxent River, Md., the aircraft did one flyby over the U.S.S. George H.W. Bush and performed a smooth landing and caught the number three wire, as engineers had intended. “You saw the future today. This is the first of the next generation of naval aircraft,” said Navy Secretary Ray Mabus after the successful landing. Development of the X-47B began in 2007 under the Unmanned Combat Air System (“UCAS”), a precursor to a follow-on program, Unmanned Carrier Launched Surveillance and Strike (“UCLASS”), which aids the Navy’s goals of integrating unmanned wing aircraft into carrier-based aviation.
Sequestration furloughs have impacted military equipment deals that require technical review, according to Rizwan Ramakdawala, a senior aerospace engineer at Defense Technology Security Administration (“DTSA”). DTSA, responsible for reviewing exports and sales of potentially sensitive technical equipment, declared that the processing times for requests will be delayed after a 20% reduction in workforce due to Department-wide furloughs. “We are all going to be furloughed come July 8, [and so] there will be a 20% reduction in workforce availability at DTSA, so you can definitely expect to see delays. We are not sure of any other way to avoid it,” said Ramakdawala. The extent of the delays will not be known until late July once furloughs take effect.
Big Movers
Chemring Group PLC (Up 6.2%) – Share prices were up following an announcement that a subsidiary, Chemring Military Products, Inc., was awarded a major Department of Defense (“DoD”) contract to supply non-U.S. standard ammunition to the agency. The award, worth $42.1 million, was a Firm Fixed Price (FFP) contract for a one-year period to deliver various non-U.S. standard ammunition to foreign governments and international organizations eligible to receive military defense items.
Relevant Transaction
Data Device Corporation (“DDC”) acquired National Hybrid Inc. – DDC, a portfolio company of Behrman Capital, acquired National Hybrid in a transaction valued at $32.5 million. National Hybrid, a designer and manufacturer of data networking technology for the aerospace / defense industry, enhances DDC’s product offering while providing access to new strategic markets and will help to reinforce DDC’s position as a leading supplier of data networking electronics for the Department of Defense and other aerospace and defense contractors.
AGC Aerospace & Defense and The Edgewater Funds acquired Tods Aerospace & Defence – Tods, a manufacturer of advanced composites and materials found in defense and aerospace systems across the world, was acquired by private equity groups AGC Aerospace & Defense and The Edgewater Funds. For AGC, the acquisition of Tods will provide cost synergies and further group innovation while helping AGC penetrate further into the European, Middle East, and Asian marketplaces.
