Industry Week in Review – June 28, 2019
KippsDeSanto & Co. Industry Week in Review – June 28, 2019
Industry Week in Review – June 28, 2019
Aerospace & Defense Update
In a lopsided 86 – 8 vote, the Senate passed a $750 billion defense authorization bill. The $750 billion figure is approximately $17 billion larger than the $733 billion figure the House of Representative has targeted for FY2020. The Senate’s bill includes a 3.1% pay raise for troops, an additional 6,200 service members, an allocation of $300 million in funding for military housing, and full funding of Pentagon nuclear modernization programs. The bill passed with ease despite concerns regarding U.S.’ nuclear capabilities and the overall size of the budget. Proponents tout the bill as continuing efforts to expand and modernize the military to counter growing geopolitical threats. The House of Representatives plan to vote on its version of the bill next month and inter-chamber negotiations are expected to follow thereafter.
Due to the unearthing of additional software problems in Boeing’s 737 MAX airplane, the Company anticipates the aircraft’s grounding to extend through September. This delay further disrupts flight schedules for many airlines, as it was previously expected the aircraft would be cleared for service by the end of August. Airlines including Southwest, American, and United have removed the MAX from their schedules through September and have not committed to a timeline beyond that. Boeing’s shares closed down 3% in the wake of the news. The FAA has insisted that there is no specific timeline on returning the MAX to service, and that clearance will not be granted until their all maintenance checks and safety concerns have been fully investigated and resolved.
Big Mover(s)
Raytheon Co. (Down 5.1%) – Shares prices were down this week due to criticism from United Technologies Corp. (“UTC”) shareholders over the rationale behind the merger of UTC and Raytheon.
Triumph Group (Up 21.4%) – Share prices were up this week in response to Triumph’s announcement that it will begin supporting Mitsubishi’s SpaceJet M100 program.
Transactions
Accenture plc (NYSE:ACN) has agreed to acquire BCT Solutions, a technology consultancy that specializes in Command and Control, Cybersecurity, Cyber Defense services and expertise, supporting the delivery of Defense, National Security, and Public Safety mission-support capabilities. Terms of the transaction were not disclosed.
AerSale, Inc. has acquired Qwest Air Parts, Inc., a provider of aircraft dismantlement and the refurbishment and resale of used serviceable materials. Terms of the transaction were not disclosed.
Bromford Industries Limited, a portfolio company of Liberty Hall Capital Partners, acquired Accrofab Limited, a provider of complex fabricated and machined engine bracketry for the global aerospace industry. Terms of the transaction were not disclosed.
METIS Solutions, LLC, a portfolio company of Blue Delta Capital Partners, has acquired Pluribus International Corp., a provider of counterintelligence, critical infrastructure protection, all-source analysis, and other mission-focused support services to the IC, Department of Defense, and other national security clients. Terms of the transaction were not disclosed.
Mitsubishi Heavy Industries Ltd. has agreed to acquire the CRJ regional jetliner program of Bombardier, Inc., which provides maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft. The deal is worth an estimated $570 million.
Novaria Group, a portfolio company of Rosewood Private Investments and Tailwind Advisors, has acquired Acra Aerospace, LLC, a provider of the design, development, and manufacture of complex engine components. Terms of the transaction were not disclosed.
Saudi Arabian Military Industries, a subsidiary of the Saudi Arabian sovereign wealth fund, has agreed to acquire Advanced Electronic Company, a provider of the design, development, manufacture, maintenance, and repair of several advanced industry and military electronic systems, devices, and equipment. Terms of the transaction were not disclosed.
