09 Mar 06. Esterline Technologies Corporation (NYSE:ESL – News) announced an agreement to acquire Wallop Defence Systems Ltd. from Cobham plc. Wallop is a leading manufacturer of military pyrotechnic products. The acquisition will be the ninth plant Esterline has acquired in the U.K. in the past six years. Robert W. Cremin, Esterline’s chief executive officer, said that the transaction significantly enhances Esterline’s existing countermeasures business by adding an international market leader. Cremin said, “…Wallop also expands our product offering to additional platforms, including Eurofighter, UK JSF, Tornado and Gripen.” Cremin said that besides strengthening Esterline’s international position, “…Wallop brings to us strong industry fundamentals and a very capable management team, including a highly experienced R&D staff.” He said Wallop has “…demonstrated product leadership in many categories, has shown a continued commitment to developing new proprietary technology, and is the design authority for many products sold to the British Ministry of Defence.” Esterline has already completed the purchase of Cobham’s smaller U.S. countermeasures operation in Milan, Tenn. Completion of the Wallop transaction is expected in early April, contingent upon certain governmental approvals. The combined sales for both operations are $45m. Esterline will conduct a conference call to discuss the transaction following its successful completion. Esterline was advised in this transaction by Jefferies Quarterdeck, a division of Jefferies & Company, Inc. (See: BATTLESPACE UPDATE Vol.8 ISSUE 10, 09 March 2006, IS COBHAM BEING TIDIED UP FOR SALE?)
15 Mar 06. Smiths Group continued the solid growth of 2005 as it reported its interim 2006 results. Pre-tax profits rose 11 per cent to £179m ($313m) on sales that were up 19 per cent at £1.6bn. The engineering group said market conditions were good and that the pace of growth would be matched in the second half. The interim dividend was raised 6.5 per cent to 9.85p. Sales growth was robust across all four divisions and the greater strength of the dollar accounted for 3 per cent of profits. In the period, North America accounted for 57 per cent of sales and 70 per cent of headline operating profits – a measure preferred by the company, which includes restructuring costs but excludes exceptionals, amortisation, and currency hedging effects. Aerospace remains the biggest division by sales, accounting for some 36 per cent. Sales grew 10 per cent in the period but headline operating profit was down 4 per cent at £43m and margins slipped due to higher development costs charged to profit and less favourable exchange rates for exports from the UK. The outcome of the US Quadrennial Defence Review was held to be good for Smiths with continued funding commitment to the main projects in which it is involved. Demand from civil aerospace customers also remained solid. The group has successfully exploited the growth in the market for detection equipment in recent years and that business saw sales of £171m in the period, a rise of 12 per cent, with operating profit of £25m, up from £22m last time. Smiths aims to move from provision of standalone detection equipment at airports and ports towards networked systems across large areas. The medical division’s sales rose 50 per cent to £355m with operating profit up 60 per cent at £61m after the acquisition of Medex a year ago. Underlying sales growth was 6 per cent in a market that the company says is expanding at 5 per cent a year. It targets accelerated growth in this area. Specialty engineering, with growth of 14 per cent to £504m, is the second largest division by sales. Profits were up 21 per cent at £64m, gaining from increased investment in the oil and gas industry. However, the company noted that large project work in the Middle East remains difficult for security reasons. (Source: FT)
09 Mar 06. General Dynamics C4 Systems signed an exclusive cooperatio