15 May 08. The VT Group is looking to further bolster its U.S. support business with an acquisition and aims to double its revenue in the next few years to gain critical mass, Chief Executive Paul Lester said. The British company’s activities in the U.S. have grown rapidly in the last few years and now equal the size of its naval shipbuilding business. The annual results for the year ending March 31, announced earlier this week, show that U.S. support service activities now account for about 20 percent of total group revenues of $2.3bn.
But the U.S. market is proving a tough nut to crack and VT has yet to win a major contract. Lester said the $468 million annual revenue of VT Services is still not sufficient to give the U.S. business the size needed. As a result, he said the company is raising its sights from the $500m annual revenues it first targeted for the U.S. business to $1bn. Part of the strategy is to grow by acquisition, and Lester said he is “looking to buy the right business in the U.S.” (Source: Defense News)
13 May 08. Hewlett-Packard said it had reached a deal to acquire Electronic Data Systems for $25 a share, or around $12.8bn, setting the stage for a challenge to IBM’s dominance in computer consulting and services. Separately, H-P said it expects to report fiscal second-quarter earnings of 80 cents a share on revenue of $28.3bn, and increased its fiscal year earnings and revenue forecast. The company expects fiscal 2008 earnings of $3.30 to $3.34 a share, compared with its previous estimate of $3.26 to $3.30 a share. It expects fiscal 2008 revenue of $114.2bn to $114.4bn, up from its prior estimate of $113.5bn to $114bn. The new estimates don’t reflect the potential impact of the EDS acquisition. (Source: WSJ)
13 May 08. Cobham has agreed to buy the radio frequency components and sub-systems business of M/A-COM from Tyco Electronics. Cobham is paying $425m in cash for the business, with allowable tax expenses effectively reducing the purchase price to $380m. Cobham said M/A-COM’s aerospace & defence business is highly complementary to Cobham’s Defence Electronics Systems business. The acquired business is a leading designer and manufacturer of advanced radio frequency and microwave subsystems and components. It is the best-known and one of the largest original equipment manufacturers (OEMs) of microwave subsystems and components in the world. The commercial activities of M/A-COM will operate outside of Cobham’s operating divisions as they are considered non-core and will ultimately be sold off. The level of interest in the assets expressed to Tyco during the auction process for the sale of M/A-COM suggests that the commercial arm could be sold swiftly at a price that justifies the purchase price for the aerospace and defence assets. In the year to 30 September 2007 M/A-COM generated operating profits of $37.9m and earnings before interest, tax, depreciation and amortisation of $62.9m on revenue of $477.7m. The aerospace and defence business comprises around 40% of M/A-COM’s revenue. (Source: City A.M.)
12 May 08. Aircraft parts maker Vought Aircraft Industries Inc. said first-quarter profits rose 49 percent as revenue got a boost from its work on Boeing Co.’s aircraft. Dallas-based Vought, which is privately owned, earned $28.7m in the quarter ended March 30, up from $19.2m a year ago. Revenue grew 12 percent to $425.4m from $380.7m a year earlier. Commercial revenue increased by $21.4m, or 11 percent, helped by revenue from Boeing’s (NYSE: BA) 747-8 and 787 programs and Airbus’ A330 program. Military revenue rose $23.4m, or by 20 percent due to higher delivery rates on the H-60 program and timing of deliveries for the Global Hawk program. Business jet revenue remained flat for the period. Funded backlog increased 22 percent to $3.9bn at the end of the quarter, compared with $3.2bn a year ago, with increased orders across all categories. However, Vought had negative free cash flow o