Industry Week in Review – March 8, 2019
KippsDeSanto & Co. Industry Week in Review – March 01, 2019
Industry Week in Review – March 8, 2019
Aerospace & Defense Update
Raytheon recently won a contract from the Defense Advanced Research Projects Agency to work on its new hypersonic tactical boost glide weapon. According to Raytheon, the approximately $63.3 million contract is part of an overarching Air Force initiative that will also include ensuing critical design reviews. The weapon will use a rocket to achieve a hypersonic speed of nearly 4,000 miles per hour — the speed where the payload will then separate and glide the rest of the way. In addition, the system can be maneuvered while in flight but will not accelerate after the payload separation. The goal of this project is to develop a weapon that is effective, controllable, and affordable in response to the Pentagon’s growing concerns about the pace of Chinese and Russian development of hypersonic weapons.
The concept of breaking the military’s 20-year acquisition development cycle for advanced new weapons, such as fighter aircraft, emerged this past week from the Air Warfare Symposium. The concept is specifically related to the Next Generation Air Dominance (“NGAD”) program. Many believe that rather than spend the next decade developing a singular new air combat platform, the NGAD program could be better shaped to establish a pipeline for acquiring, developing, and fielding a host of new aircraft types, with a new design entering service as quickly as every two years. The thought is that instead of resting all hopes on a singular model, the alternative would allow Air Force leaders to hedge against the risk of technology breakthroughs, surprise enemies with unexpected new capabilities, and potentially result in cost reductions. While this idea was just floated this past week, no substantive decision has been made yet regarding the NGAD program.
Government Technology Solutions
Technology-focused defense, security, and infrastructure contractor, Parsons Corporation, is reportedly seeking to raise $500 million via an initial public offering (“IPO”), valuing the company at approximately $3 billion. The last government contractor IPO was by Booz Allen Hamilton in 2010 – a $238 million offering by the government consulting firm. The Virginia-based Parsons filed the required “S-1” paperwork with the Security and Exchange Commission (“SEC”) for an IPO, indicating a potential offering in April or May. The move would be the latest in Parsons’ accelerated growth strategy, which includes strategic acquisitions and the recent headquarters relocation to the Washington, D.C. area.
Big Movers
Maxar Technologies (Down 12.5%) – Share prices were down this week after the Company announced it plans to restructure its commercial geostationary orbit satellite business to place a greater emphasis on smaller satellites and government customers.
Textron (Down 6.2%) – Share prices were down again this week after Textron recalled around 200 off-highway vehicles due a fuel leak and fire hazard and another 700 due to a crash hazard.
Transactions
Boeing has acquired ForeFlight, LLC, a provider of innovative mobile and web-based flight planning and navigation software. The terms of the transaction were not disclosed.
Liberty Hall Capital Partners has acquired Onboard Systems, Inc., a provider of external cargo handling equipment for civil and military helicopters. The terms of the transaction were not disclosed.
Tribus Aerospace Corp. has acquired Midwest Precision Holdings Inc., a provider of precision manufacturing of complex components for aerospace, defense, energy, and engineered products markets. The terms of the transaction were not disclosed.
Tyto Athene, LLC, a portfolio company of Arlington Capital Partners, has acquired Island IT Consultants, a provider of information and communications technology support services to the Intelligence Community and other United States government agencies. The terms of the transaction were not disclosed. This acquisition represents the first for Tyto Athene since the company was formed last August through Arlington Capital Partners’ acquisition of Black Box Corp.’s Federal Government IT services business.
