09 June 19. Raytheon Technologies Corporation: UTC, Raytheon make marriage official. Raytheon and United Technologies Cooperation will officially merge into a new entity called Raytheon Technologies Corporation, with the deal taking place in first half of 2020.
Following Saturday reports that a merger was imminent, the two firms made the news official Sunday, launching a website about the planned all-stock deal.
While being billed as a “merger of equals,” UTC shareowners will own approximately 57 percent and Raytheon shareowners will own approximately 43 percent of the combined company.
A spokesperson for Raytheon confirmed to Defense News that the combined company will be based in the greater Boston area. Raytheon is based in the Boston suburb of Waltham, while UTC is based in Farmington, Conn.
Per a news release, the new company will have approximately $74bn in pro forma 2019 sales. The release also highlights that the merged company will be a major player in both the defense and commercial aerospace markets, giving greater market resiliency.
Throughout the release, the companies cite the ability to increase R&D investment across the board as one benefit of the agreement, with focus areas to include “hypersonics and future missile systems; directed energy weapons; intelligence, surveillance, and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.”
Byron Callan, a defense analyst with Capital Alpha Partners, wrote Sunday in a note to investors that the merger may be a sign of market trends to come.
“An RTN-UTX deal may be a signal (a siren?) that 1) this U.S. defense cycle is peaking, and firms need to start repositioning for growth in 2021 and beyond; 2) Maybe the commercial aerospace outlook is looking wobbly too and Western firms need to hedge against fallout from a U.S.-China trade split. A U.S. recession is overdue; 3) Defense firms will need to fund more of their own R&D in the future so joining a larger firm will limit margin pressure which could be evidenced in the 2020s,” Callan wrote.
Callan also sees “some overlap in the defense portfolios” for the two companies, primarily through the Mission Systems segment of Collins Aerospace. That could require some small divestitures down the road as the deal is finalized, but there do not appear to be any major issues that would lead to objections from the Pentagon.
“Both are active in defense communications, though Collins has a larger share. Both have imaging/IR products, though Raytheon has a larger product offering,” he wrote. “Collins provides large space imaging mirrors used in surveillance satellites but it’s not clear to us if there is an overlap with Raytheon’s classified space payload work.”
The deal should create a mammoth defense contractor second only to Lockheed Martin. Raytheon already ranked number two on the most recent Defense News Top 100 list, with $23.5bn in defense revenues, 93 percent of its overall revenue total; UTC has $7.83bn in defense revenues, a mere 13 percent of its overall figures.
However, that UTC number came before its acquisition of Rockwell Collins and its $2.28bn in defense revenues, which will naturally increase United’s overall number.
The move comes after 18 months of major defense consolidation. In addition to UTC’s move on Rockwell, there was the General Dynamics acquisition of CSRA, Northrop Grumman’s acquisition of Orbital ATK, and L3 and Harris announcing in Oct. 2018 that they would combine to form what at the time appeared to be the seventh largest global defense firm. (Source: Defense News)
06 June 19. Rolls-Royce offloads record pension liabilities. In an arrangement also known as a pension buyout, the insurer will pay the pensions of around 33,000 pensioners of the scheme’s 76,000 members. Legal & General has taken on around a third of the Rolls-Royce UK Pension Fund’s assets. It has also received £4.1bn in scheme liabilities, resulting in a £0.5bn reduction in Rolls-Royce net assets. According to its latest annual report, as of March the scheme had £12.8bn in assets and a surplus of £1.9bn. As part of the deal, Rolls-Royce has made an exceptional cash contribution of £30m, with the scheme’s assets now worth £8.4bn. The scheme’s funding levels remain unchanged, as does the engineer’s guided free cash flow for the full-year.
Legal & General has now carried out four of the five largest pension risk transfers in the UK. L&G sealed similar deals with British Airways, former British chemical company ICI and automotive supplier TRW. The insurer has history with Rolls-Royce, having provided investment management services for the plan since 1989. In 2016, Rolls-Royce agreed a £1.1bn buyout with L&G for its Vickers Group Pension Scheme.
A good news story for Rolls-Royce, which has slashed its pension obligations, and for its pensioners, whose retirement funds are now more secure. The engineer’s pension scheme doesn’t form part of our bear case though, which focuses on its engine problems and an associated host of exceptional charges. Sell. Last IC View: Sell, 916p, 11 Apr 2019. (Source: Investors Chronicle)
07 June 19. Thales completes the sale of its General Purpose Hardware Security Module business to Entrust Datacard. Thales (Euronext Paris: HO) announces today the closing of the sale of its General Purpose Hardware Security Module (GP HSM) business to Entrust Datacard, a leading provider of trusted identity and secure issuance technology solutions.
This transaction follows the commitments made by Thales to several competition authorities to divest this business to a suitable purchaser in order to ensure a strongly competitive market for GP HSM solutions, which have allowed Thales to finalize the acquisition of Gemalto.
This transaction will enable nCipher Security — with more than €100m in revenues in 2018 and over 300 employees — to continue to deliver innovative solutions and services and strengthen its market leadership as an Entrust Datacard business.
This business, which was assigned to the “Defense & Security” segment, is deconsolidated from Thales’s accounts since 1st January 2019.
06 June 19. Patria acquired Belgium Engine Center. International defence company, Patria has acquired 100% of the shares of Belgium Engine Center SPRL (BEC) from AIM Norway in order to further strengthen BEC’s capabilities and business. BEC is a military jet engine maintenance, repair and overhaul (MRO) center that services the Pratt & Whitney F100 engine which powers F-15 and F-16 aircraft around the globe. The center also provides material management services for those engines. BEC has its operating base in Herstal in Belgium, and has about 90 employees.
This acquisition is part of the execution of Patria’s strategy in which the main growth area is international maintenance and life-cycle support business, particularly in Europe.
“The purchase of BEC is an important milestone for Patria. Growth in international maintenance operations is at the core of our strategy. Patria has a long history and solid know-how in aircraft maintenance, including their engines, both in Finland and other Nordic countries, and now with this acquisition this business will be expanded. We are committed to continue the excellent work done so far in BEC, as well as the high-quality standard customers expect from us. I also want to welcome BEC’s personnel to be part of Patria, and I’m convinced that together we will develop this business further. We have complementary competencies, which make us all stronger and more competitive”, states Jukka Holkeri, President of Patria’s International Support Partnerships business unit.
“On behalf of BEC I want to welcome Patria as a new Nordic owner of this company. We look forward to working together and ensuring our customers even larger services in future”, says Hugo Vanbockryck, Managing Director of Belgium Engine Center.
The acquisition does not change customer contracts or terms of employment for BEC employees or other commitments of the company and is in full compliance with legal requirements.
As a consequence of this acquisition, the official name of BEC will be changed to Patria Belgium Engine Center SRL, and communications will be built around the Patria brand. This unit will be an essential part of International Support Partnerships business unit at Patria. A few months’ transition period to implement Patria’s brand to the new unit is foreseen.
05 June 19. Swiss firm RUAG reaches for stars with pre-IPO spending spree. Swiss defence and aerospace company RUAG is planning around a $500m acquisition spree to cash in on a boom in private U.S. space projects inspired by billionaire Elon Musk’s SpaceX.
RUAG, owned by the Swiss state, makes ammunition for the Swiss army as well as parts for satellites and airliners. But Chief Executive Urs Breitmeier told Reuters the firm wants to get out of defence and concentrate on expanding its space business before a planned flotation in the next couple of years,
Switzerland said in March it wanted to privatise RUAG, which has become a technology specialist in civil aviation and space since it was created 21 years ago. Defence now makes up less than half its 2bn Swiss francs in sales.
Breitmeier wants the company to capitalise on the space industry’s shift towards the private sector.
“There has been a big change in the space industry in recent years,” Chief Executive Urs Breitmeier said in an interview. “It has moved from institutions to the commercial sector.
“The U.S. market is much more dynamic than the European market with billionaires like Elon Musk, Jeff Bezos and Richard Branson setting up space companies. If you want them as your customers, you have to be there.”
Musk’s SpaceX has upended the launch services market by slashing the cost of rocket launches with its reusable rocket technology.
The California company is one of several private groups challenging legacy aerospace companies in a new “space race” fueled by demand for satellite launch services and, potentially, tourism and deep space exploration.
Some of the newer space companies also have their sights set on Internet services, asteroid mining, lunar missions, and in-space manufacturing, among other endeavors.
Morgan Stanley has estimated the global space industry could generate revenues of $1.1trn or more in 2040, up from $350bn currently.
Breitmeier said RUAG must scale-up in space and aerospace for a successful IPO and aims to spend “at least half a billion francs” on acquisitions in that area to prepare for the flotation in Switzerland in 2021 or 2022.
The group plans to raise the money by selling off its bullet making division Ammotec, its cybersecurity arm and the maintenance and repair business that works for armed forces outside Switzerland.
Breitmeier said private equity and industrial buyers are already showing interest and the first deals could come this year.
According to Reuters estimates, the company could have a valuation of around 1bn Swiss francs ($1.01bn) when it floats.
Space is RUAG’s most profitable business, with a 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) margin of nearly 14% from sales of 377m francs.
After the float, RUAG is looking for organic sales growth of 4% and a double-digit EBITDA margin.
“Space has a lot of potential,” Breitmeier said, pointing to the commercialisation of the industry, which now makes hundreds of satellites rather than individual bespoke models.
Tesla CEO Musk, for example, plans to launch as many as 12,000 satellites as soon as 2024 to make high-speed internet available from space.
RUAG is also involved with the OneWeb project for 650 satellites providing 5G global internet access. RUAG builds the platforms for the satellites as well as dispenser systems which deliver the satellites into orbit.
Other space customers include Thales, Airbus and Maxar Technologies and the United Launch Alliance, a joint venture between Boeing and Lockheed Martin. RUAG’s products include computers and antennae as well as heat shields and fairings – the nose cones on rockets.
The growth in demand is also due to space companies following the examples of Boeing and Airbus in aviation by outsourcing production.
“With the concept to launch thousands of satellites, the system integrator … needs more reliable suppliers, this is where we want to jump in,” said Breitmeier, who has led RUAG since 2013.
RUAG, which already has space plants in Alabama and Florida, has begun narrowing its focus on what it wants to buy.
“We are at the early stage of looking for partners. But in the ideal case it would be one company we would look to buy, or it could be two. We don’t want to buy 20 companies,” he said. ($1 = 0.9918 Swiss francs) (Source: Google/https://finance.yahoo.com)
05 June 19. Chemring posts slightly higher profit, maintains forecast. Defence contractor Chemring Group said its half-yearly profit rose 4% and backed its full-year forecast as it gained from faster insurance payouts for an explosion last year at its UK factory that makes flares to combat heat-seeking missiles.
The fatal blast in August left a scar on the firm’s costs and operations and continued to bite as it decided against reopening the explosion-hit unit amid an ongoing investigation.
“Significant changes have been implemented in the period to improve safety, strengthen leadership, corporate governance and embed continuous improvement across the Group,” Chief Executive Michael Ord said in a statement.
The company, which expects to book more than two-thirds of its 2019 revenue in the second half of the year, said its order book stood at 494m pounds at April 30.
Defence contractors have benefited as nations pump more money into defence. Global military expenditure in 2018 reached levels not seen since the end of the Cold War, fuelled by the United States under President Donald Trump, according to a leading defence think-tank.
Last month, Chemring’s Australian unit was awarded two contracts by the U.S. Department of Defence to supply countermeasures to the Royal Australian Air Force, the U.S. Navy and the U.S. government’s Foreign Military Sales scheme in support of Lockheed Martin F-35 fighter jets.
The company’s underlying operating profit was 12.1m pounds in the period ended April 30, compared with a restated 11.6m pounds for the same period a year earlier. (Source: Reuters)
06 June 19. SCISYS Group PLC (“SCISYS”, the “Group” or the “Company”) AGM Statement. SCISYS Group PLC (“SCISYS” – AIM: SSY; ESM: SCC), the supplier of bespoke software systems, IT-based solutions and support services to the space, media & broadcast, government, defence and commerce sectors, is pleased to release the following trading statement that will be read out at its AGM to be held at noon today: SCISYS can report that it has made a positive start to 2019, delivering on contracts that formed part of its record opening order book, winning notable new contracts and generating strong cash flow in line with Board expectations. All divisions continue to expand their teams on the strength of their pipelines of prospective business opportunities. The Directors expect that the Group’s earnings in 2019 will follow the more familiar pattern of being heavily weighted towards the second half of the year; the more balanced profile of business seen in 2018 proved to be a temporary phenomenon.
Our Space division has built on the buoyant two-month period for order intake following the establishment of our Irish Group holding company in November 2018 by extending its footprint in the EU-funded Galileo satellite navigation programme with the €9.7m order from Thales Alenia Space France, announced in April. This success provided further evidence that the Board’s decision to implement the re-domiciliation plan to address potential Brexit-orientated risks was fully justified.
From 1 January 2019 our two former divisions, Media & Broadcast and Annova Systems, have operated in combination under a single management team as the SCISYS Media Solutions division. Integration activities will continue to run throughout 2019 to maximise benefits from joint product development, marketing, business development and shared customer services.
As planned, the Group’s Enterprise Solutions & Defence division has successfully extended its support agreements with UK Power Networks to 2020 and Arqiva to 2021, while securing further orders to maintain its provision of on-site consultancy teams to key customers in both the commercial and defence/security arenas.
Taking into account the above, an impressive pipeline of new business prospects and continued strong cash conversion, the Directors are confident that SCISYS is well placed for 2019 and beyond.
04 June 19. Boeing [NYSE: BA] today announced its investment in Robotic Skies, a services provider that connects manufacturers and operators of commercial unmanned aircraft systems (UAS) with a global network of more than 170 civil aviation authority-certified repair stations.
“With safety as a cornerstone, we are shaping a robust operational ecosystem for on-demand mobility that supports the future of aircraft, air vehicles and autonomous systems,” said Brian Schettler, managing director for Boeing HorizonX Ventures.
The investment is part of Boeing’s disciplined, long-term strategy of entering into value-added partnerships that enhance and accelerate growth and deliver key differentiators for customers.
“Unmanned and autonomous commercial aircraft operations are increasingly mirroring those in manned aviation, including the need for quality maintenance provided by certified technicians,” said Brad Hayden, founder and CEO of Robotic Skies. “This latest investment will allow us to continue to grow our global footprint and expand operational capabilities to support customers.”
Boeing HorizonX Ventures led this funding round with participation from Thayer Ventures, Sun Mountain Capital and KickStart Seed Fund. The investment builds on a previously-announced collaboration with Robotic Skies, Boeing Global Services and its subsidiaries Aviall and Jeppesen to provide enhanced commercial UAS services.
Boeing is the world’s largest aerospace company and leading provider of commercial airplanes, defense, space and security systems, and global services. As the top U.S. exporter, the company supports commercial and government customers in more than 150 countries. Boeing employs more than 150,000 people worldwide and leverages the talents of a global supplier base. Building on a legacy of aerospace leadership, Boeing continues to lead in technology and innovation, deliver for its customers and invest in its people and future growth.
Robotic Skies is the only global network of certified UAS maintenance centers. It offers comprehensive turnkey field service programs designed to keep UAS flying safely, efficiently and affordably around the world. Founded in 2014, Robotic Skies has more than 170 certified repair stations across more than 40 countries, providing MRO and support services for commercial UAS. Each service center in the network possesses the aviation expertise and factory training to ensure the mission readiness of these aircraft. For more information about Robotic Skies, visit www.roboticskies.com.
04 June 19. Space is the place for capitalism. Are the billionaires battling it out in the 21st Century space race going to generate untold riches for their backers and send existing industries down a black hole?
Amazon’s Kuiper plan is for a 3,236-strong LEO satellite network designed to serve around 95% of the world’s population and make the retailer a global internet service provider
A hundred years ago, John D. Rockefeller and Andrew Carnegie wrestled their way to become the two richest people in the known universe by harnessing new technologies in oil drilling and steel manufacturing. Now, Jeff Bezos and Elon Musk are part of a new generation of capitalists racing to invest their already huge wealth in rocket launch and satellite technology to propel themselves and their investors to further interstellar fame and fortune.
While many of the companies leading the way in the new space race are privately owned, there are many listed companies that are heavily involved in the wider industry and the repercussions for the existing satellite and communications industry is likely to be significant.
So far in 2019, two rockets have launched that have potentially inflicted the first of a thousand mortal wounds for the current satellite industry – and that’s even before you include plans from Bezos’s Amazon.com Inc (NASDAQ:AMZN).
Best known of the new generation of space explorers is Musk’s SpaceX and its Starlink project, which aims to create a ‘constellation’ of satellites in a low orbit around the Earth designed to provide low-latency, high-bandwidth broadband services around the world — and make enough money for Musk to complete his real dream of sending humans to live on Mars.
Two weeks ago, via its Falcon 9 rocket, SpaceX launched the first 60 Starlink satellites and said it has the funding in place to build and launch enough satellites to begin using a network that it eventually foresees will number 11,943 satellites.
Technology and manufacturing innovation
This is just one small step for the new breed of space racers as part of a giant technological leap that has not only excited public attention but also allowed them to get the jump on their old-school rivals – the simple concept of lowering costs.
By standing on the shoulders of giants to make the most of the technology and expertise developed over several decades by state-funded research at NASA, the European Space Agency and Russia’s Roscosmos, SpaceX and others have also harnessed new manufacturing ideas and a modern recycling ethic.
For example, the expense of thrusting a satellite weighing anything from six tonnes up to 11 tonnes into space are vast, so the ability of rocket companies such as SpaceX and Bezos’ Blue Origin to reuse their rockets again and again means they can reduce costs considerably. SpaceX was offering a launch discount of 40% compared to incumbents.
The design of satellites themselves has also slimmed down costs.
Low-earth orbit (LEO) microsatellites – such as the 10cm square CubeSats developed by NASA – are allowing the creation of low-earth orbit ‘mega-constellations’ to provide wide coverage above the planet.
Starlink’s flat-panel design allows for a dense launch stack to take full advantage of Falcon 9’s launch capabilities pic.twitter.com/ntnJInEfno
Built on assembly lines using mass-produced parts, these LEO satellites have a shorter lifespan but are a thousandth of the weight of a traditional satellite. Not only does their size mean many more can be launched at once, their cost at around US$1m is a fraction of the US$220-$250m Inmarsat paid for just one of its GlobalXpress satellites.
Starlink’s flat-panel design, for example, ensured each satellite weighed approximately 227kg, allowing SpaceX to take full advantage of its rocket’s capacity.
Bezos, Musk …and Wyler?
Although currently playing catch-up with Musk’s SpaceX, Bezos’ has two irons in the space fire and the funds to make them reality.
As well as his private Blue Origin side project, regulatory filings recently revealed Amazon’s Project Kuiper plans, named after the Kuiper Belt that spins around our solar system.
Amazon’s Kuiper plan for a 3,236-strong LEO satellite network is designed to serve around 95% of the world’s population and make the retailer a global internet service provider.
“There are billions of people around the world who lack access to broadband internet. Our vision is to provide low-latency, high-speed broadband connectivity to many of these unserved and underserved communities around the world,” Amazon said.
However, this is a long-term project and is expected to take many years.
Challenging this high-profile, low-orbit pair is US- and UK-based OneWeb, a start-up that in February launched the first of 600 LEO satellites that will begin providing high-speed internet access by 2021.
That same month OneWeb, which was founded by industry veteran Greg Wyler, raised $1.25bn from investors including WeWork backer SoftBank to take its total funding close to $3.5bn.
Fuelled by this cash injection and a manufacturing joint venture with Airbus SE (EPA:AIR), OneWeb targets the launch of 30 satellites per rocket by the end of this year.
This trio are far from lost in space, as more than 600 companies have drummed up around almost US$18bn in investment in eight years, according to data from Northern Sky, of which US$7bn of that was raised in the past two years.
In the medium term, this mushrooming of new industry entrants has weighed on sentiment around the incumbent satellite industry players, most of which are less fleet of foot than these newcomers.
The cheap bulk supply of capacity, for example, has rendered legacy satellites increasingly obsolete, with the decline in satellite capacity prices having accelerated over the past year, with a global average decline of 18%, Northern Sky recently revealed.
Amid such issues, the likes of London-listed Inmarsat Plc (LON:ISAT) and France’s Eutelsat Communications SA (EPA:ETL) have struggled.
Inmarsat is being taken private after a frustrating ups-and-downs in recent years, with a similar ride for Luxembourg-headquartered SES SA (EPA:SESG) and Eutelsat, though smaller UK rival Avanti Communications Group plc (LON:AVN) has seen its share price fall to earth like one of Musk’s reusable rockets under the heavy load of its debts.
Others have weathered the shifting sands to rally in the past year or so, with US-based Intelsat SA (NYSE:I) and Iridium Communications Inc (NASDAQ:IRDM).
Interstellar investment returns?
For those which can dodge the financial asteroids, analysts see opportunities for returns of 10-times and greater in the long-term.
While relatively small markets today, Goldman Sachs has flagged up to its clients that the lowering barriers to participation in the space economy from falling costs will make new industries like space tourism, asteroid mining, and on-orbit manufacturing viable in the more distant future.
“We believe space mining is still a long way from commercial viability, but it has the potential to further ease access to space and facilitate an in-space manufacturing economy,” Goldman analysts said in 2017, noting estimates for around $25-50bn worth of platinum that could be harvested from a single asteroid.
Analysts at Morgan Stanley have also seen the potential for huge structural change that some recent technological developments could bring, seeing parallels with Elisha Otis’s 1854 demonstration of the first “safety elevator” that seemed insignificant to the public at the time but 20 years later saw every multistory building in New York, Boston, and Chicago constructed around a central elevator shaft.
Reusable rocket technology may provide a similar turning point, suggest Morgan Stanley analysts. “We think of reusable rockets as an elevator to low Earth orbit (LEO),” they said. “Just as further innovation in elevator construction was required before today’s skyscrapers could dot the skyline, so too will opportunities in space mature because of access and falling launch costs.”
Morgan Stanley last year estimated that the global space industry could generate revenue of $1.1trn or more in 2040, up from $350bn currently.
The investment bank sees the most significant short- and medium-term opportunities in satellite broadband internet access, estimating that satellite broadband will represent 50%-70% of the projected growth of the global space economy by 2040, with lower cost satellites helping to drive down the cost of data just as demand for that data explodes.
“The demand for data is growing at an exponential rate, while the cost of access to space (and, by extension, data) is falling by orders of magnitude,” the analysts said.
“We believe the largest opportunity comes from providing internet access to under- and unserved parts of the world, but there also is going to be increased demand for bandwidth from autonomous cars, the Internet of things, artificial intelligence, virtual reality, and video.”
Investing for the future and the present
While many of the new satellite companies are privately owned, they are worth tracking ahead of potential IPOs and there are companies that provide products or services to the industry or are in joint ventures, such as Airbus’s manufacture of LEOs with OneWeb that claims to be able to turn out four satellites per day.
US-listed Iridium Communications Inc (NASDAQ:IRDM) claims to have been “in LEO before LEO was cool” and has spent US$3bn refreshing its satellite fleet with its Iridium Next constellation of 66 small, interconnected mobile satellites that it says will offer coverage to 100% of the planet’s surface.
Questioning the cost-benefit of LEO deployment, European rival SES has been pushing the advantages of medium-Earth orbit (MEO) satellites as it says it can provide connectivity to around 3bn people currently without the internet from just the launch of the first seven super-powered MEO satellites in 2021.
Boeing is the maker of the MEO satellites, which it says will employ its most-advanced digital technology and can be launched up to four at a time in a stacked configuration.
Thales SA (EPA:HO) claims to be able to make LEO satellites, while Lockheed Martin Corporation (NYSE:LMT) has refreshed its production line to make it more flexible and is already enjoying growing revenues at its Space Systems arm, while Eutelsat is only just trialling its own LEOs.
New York-listed STMicroelectronics NV (NASDAQ:STM), which is the primary supplier of phase array antenna for the receiving stations that the satellites will beam their signals down offers another space angle. At a recent capital markets day, STM said antenna for LEO satellites are one of its programs that are expected to ramp up in the second half of the year and beyond.
Analysts at Liberum commented: “While there are concerns on STM regarding its exposure to Huawei and the smartphone segment, we believe the company’s overall exposure is very broad and it is likely to see strong growth into H2’19 and beyond on the back of these broad programs.” (Source: proactiveinvestors.co.uk)
06 June 19. Thales Acquires Psibernetix for Decisive Technologies in Artificial Intelligence.
- This acquisition allows Thales to create computationally efficient, explainable AI
- New AI capabilities enable deployment on a wide-variety of edge processing devices
- These AI capabilities are resilient to noise, uncertainty and randomness Thales announces it has acquired the artificial intelligence (AI) company Psibernetix to help create Certifiable AI. Originally made famous by its aerial combat application called ALPHA, which consistently defeated the world’s top pilots in simulated air combat, Psibernetix is a pioneer in computationally efficient AI technologies. For Thales, the acquisition will establish explainable AI processes for applications in safety-critical environments. With explainable AI-driven outcomes, AI applications can be certified and trusted. Together, this further enables the widespread adoption of AI capabilities across Thales’ markets. Through a machine-learning algorithmic process invented by Psibernetix, called Genetic Fuzzy Trees, AI decisions are able to be mathematically verified and validated through a unique constraintbreaking approach that applies fuzzy logic-based AI to large-scale problems. This process also creates AI applications that can be placed on edge processing devices and be extremely resilient to digital noise, environmental uncertainties, and randomness. This acquisition of Psibernetix continues to help Thales bring truly unique and differentiating AI technologies to its customers for critical decisions – whatever it takes. “Having certified, explainable AI is a game-changer for the future of critical decisions in safety driven markets. With this new capability, Thales will create truly unique and differentiated AI technologies that will empower customers to make better, more informed decisions, more quickly.” Gil Michielin, Thales Senior Vice President, Avionics
05 June 19. Chemring Group Plc (“Chemring” or “the Group” or “the Company”) Interim Results For The Six Months TO 30 April 2019.
- Overall H1 performance in line with our expectations; strong Sensors & Information sector performance, Countermeasures & Energetics sector impacted by previously reported manufacturing issues and planned site recommissioning. Phased restart programme for the UK Countermeasures site remains on track. H1 results included £13m of insurance recoveries, offsetting costs of remediation and site operating costs.
- Safety remains our key priority and together with enhancing operational stability and efficiency is driving investment in the Group’s manufacturing infrastructure.
- Australian subsidiary, which has been off-line to enable the change-over to F-35 Lightning II countermeasure manufacturing, received two significant countermeasures contracts, as previously announced.
- Continued progress on various US Programs of Record. Further delivery orders received for the next phase of the HMDS IDIQ, valued at $27m, and a $9m order for the Enhanced Maritime Biological Detector (“EMBD”) program.
- Sale of military trading business, Chemring Military Products and closure of Chemring Prime Contracts completed in period. The exit of remaining commoditised energetics businesses is ongoing.
- Board’s full year expectations are unchanged, with a significant second-half weighting to revenue, underlying operating profit and cash. Approximately 95% of expected H2 revenue is in the order book or has been delivered to date.
Michael Ord, Chemring Group Chief Executive, commented: “Significant changes have been implemented in the period to improve safety, strengthen leadership, corporate governance and embed continuous improvement across the Group. Despite the previously announced manufacturing issues that impacted first half financial performance, I have been heartened by the manner in which colleagues from across the entire Group have responded to the challenge of building a stronger and improved business.
The Countermeasures market continues to see growth and significant orders were received in the period; it is against this market strength and our drive to improve safety and operational performance that we will continue to invest to modernise and automate our manufacturing facilities. The phased restart of the UK Countermeasures site remains on track with the site scheduled to be at steady state manufacturing by the end of the current financial year.
Our Sensors & Information sector continues to perform strongly, with US Programs of Record progressing as deliveries on the HMDS IDIQ contract commenced. Elsewhere the sector continues to focus on growth and expanding its product, services and capability offerings. With 95% of expected H2 revenue in the current order book or delivered to date, the Board’s expectations for the current financial year are unchanged.”
03 June 19. Oshkosh Corporation Releases Fiscal Year 2018 Sustainability Report. Oshkosh Corporation (NYSE:OSK) a leading designer and manufacturer of specialty vehicles and vehicle bodies, released its sixth annual Sustainability Report, highlighting the company’s strong commitment to operating its businesses in a sustainable manner. Our focus on sustainability continues to be a core strategy for the company, encompassing people, community, innovation, sustainable operations, an ethical culture and strong governance.
“I am proud of our team members and their continued dedication to deliver sustainable value, protect the environment and improve the communities where we live and work,” said Wilson R. Jones, Oshkosh Corporation President and Chief Executive Officer. “Whether it’s reducing energy usage and donating time in our communities or developing new and innovative products, our team members are driving sustainability.”
Highlights from the Sustainability Report include:
- Reducing greenhouse gas emissions by 17% since 2014
- 47% of U.S. salaried team members hired in 2018 were of diverse backgrounds
- Team members volunteering more than 12,000 hours in communities where they live and work
- Being named one of the World’s Most Ethical Companies for the fourth consecutive year
Oshkosh’s focus on sustainability excellence also helped the company earn the title of one of Barron’s “Top 100 Most Sustainable Companies” for the second consecutive year. (Source: BUSINESS WIRE)
10 APR 19. Maritime surveillance and management SRT Marine Systems expects to report significantly higher revenues and profits from its last trading year after both its AIS transceiver and MDA systems businesses experienced “very good growth”.
SRT told investors on Wednesday that revenues looked set to have soared 277% to £20m over the twelve months ended 31 December, while pre-tax profits were pegged to come in at £3m – a marked turnaround from the £1.2m loss recorded a year earlier.
Gross cash as at 31 March was £3.9m.
Chief executive Simon Tucker said: “This excellent result is the product of many years investment which has seen SRT become an established player in the global maritime domain awareness market. Of particular note is our MDA systems business which currently has contracts worth approximately £35m in progress and a significant pipeline of sales opportunities of which six, with a value of approximately £212m, we hope to formally contract during the course of the next 12 months.”
Tucker added that each of its six near-term pipeline opportunities had an expected implementation period of six to 36 months and the opportunity for recurring satellite data revenues and further system contracts in the future. As of 1100 BST, SRT shares had shot up 13.39% to 34.30p. (Source: Sharecast)
03 June 19. India looking to extend USD100m credit line to Kyrgyzstan for defence equipment. India aims to extend a USD100m line of credit to Kyrgyzstan to facilitate the procurement of assorted military equipment and technology, according to reports.
Official sources told Jane’s that India is planning to supply the Central Asian country with indigenously developed driving and gunnery simulators for Russian T-72 and T-90 main battle tanks and BMP-series infantry combat vehicles.
It also aims to upgrade other Soviet-era/Russian-made land platforms and systems along with body armour and protective helmets for use by the Kyrgyz military.
Bilateral defence ties between Bishkek and New Delhi have been strengthening since 2011 after the special forces of both countries discretely launched the ‘Khanjar’ series of joint counter-terrorism and high-altitude exercises. (Source: IHS Jane’s)
03 June 19. Hyundai to split to accommodate DSME acquisition. Hyundai Heavy Industries (HHI) said on 31 May that its shareholders have agreed to further restructuring in preparation for its proposed acquisition of Daewoo Shipbuilding and Marine Engineering (DSME).
Under the plan, outlined in a filing to the Korea Exchange (KRX), HHI will establish a new “intermediate holding company” – named Korea Shipbuilding and Offshore Engineering (KSOE) – under which the DSME entity will operate. According to the filing, KSOE will be focused on research, development, and investment.
In addition, HHI will establish a new operating company, which will retain the HHI name, through which activities including naval and commercial shipbuilding, offshore construction and engineering, and the production of marine engines will take place. (Source: IHS Jane’s)
03 June 19. BAE Systems Completes Acquisition of the Riptide Business. BAE Systems, Inc. has announced the purchase of the key assets of Riptide Autonomous Solutions, a Plymouth, Massachusetts-based provider of innovative, affordable unmanned underwater vehicle (UUV) technology and solutions. Specializing in small UUVs, Riptide’s platforms are sophisticated yet simple, efficient, and highly flexible, offering performance discriminators within this domain that include greater depth, range, endurance, and speed.
“Adding Riptide’s technological capabilities will position us to provide customers unmatched flexibility by offering a family of UUVs and integrated payload solutions capable of supporting a variety of critical missions,” said Terry Crimmins, president of BAE Systems Electronic Systems. “Coupling our extensive expertise in sonar, signal processing, sensor fusion, undersea communications, electronic warfare, and autonomous systems with Riptide’s unique UUV platforms will enable us to affordably address rapidly expanding maritime mission requirements in the global defense, commercial, and research markets.”
Jeff Smith, Riptide’s founder and president, stated, “Everyone at Riptide is excited to be joining BAE Systems, given our shared focus and strategic vision for the undersea market.”
Riptide employees will join the BAE Systems Electronic Systems sector, many as part of the FAST Labs™ organization, where our scientists and engineers innovate capabilities to address some of the toughest challenges in the defense, aerospace, and security domains. The FAST Labs team looks forward to maturing Riptide’s platform technology, demonstrating new solutions, and scaling manufacturing production. This is consistent with our strategy to acquire and incubate small business innovations that can yield disruptive technology breakthroughs for BAE Systems programs of record.
We expect to maintain the Riptide facilities in Plymouth, Mass., further expanding our footprint in the New England area. Headquartered in Nashua, NH, BAE Systems Electronic Systems is a premier provider of commercial and defense electronics for flight and engine control, electronic warfare, surveillance, communications, geospatial intelligence, and power and energy management. (Source: IHS Jane’s)
01 June 19. Cyberthreat intelligence firms sells for $780m. Insight Partners, a leading global capital and private equity firm, has acquired Recorded Futures, an intelligence solution company that has made its name in the cybersecurity world in recent years by providing threat intelligence.
The cash deal is for $780m. Recorded Future focuses on information related to public, private, and open source data associated with cyber intrusions. Insight had made a previous investment in the company.
Recorded Future claims to be the largest privately held threat intelligence software in the world. The company has ties to the defense and intelligence communities. Recorded Future was awarded a Defense Innovation Unit contract in September 2017. In-Q-Tel, the intelligence community’s investment arm, had made an initial investment in the company in 2010.
“We have relied heavily on a unique blend of focused data science concepts, advanced machine-enabled collection, and intelligence subject matter expertise, always with an eye toward the usability of the intelligence that we present to our clients — be it government agencies, large corporations, or forward-leaning companies,” said Christopher Ahlberg, co-founder and CEO of Recorded Future, in a May 30 press release. “This deal represents one of the largest security software transactions of the year, and the largest ever in the threat intelligence space. Insight’s renewed commitment to our future validates the path that we are on and lays the foundation to drive our collective requirements forward.” (Source: C4ISR & Networks)
03 June 19. Kongsberg acquires AIM Norway. Kongsberg Defence and Aerospace has completed the acquisition of Aerospace Industrial Maintenance (AIM) Norway, Kongsberg announced on 29 May.
The company announced in December 2018 an agreement with the Norwegian Ministry of Defence to buy AIM, the Norwegian armed force’s business for maintenance, repair and overhaul of aircraft and helicopters.
Kongsberg also completed its agreement with Patria for a shared ownership. Kongsberg is the majority shareholder with 50.1% ownership and Patria with 49.9%.
According to the company, the acquisition is a major step in consolidating the Norwegian industry’s competence and capability for military aircraft and helicopter maintenance. It will also strengthen Kongsberg’s role as a strategic partner for the Norwegian armed forces, both as a supplier of equipment and for maintenance. (Source: Shephard)
03 June 19. Australian firm Myriota a top 25 start-up to watch in growing IoT business. Adelaide-based satellite connectivity company Myriota has been listed in the top 25 internet of things (IoT) start-ups to watch in 2019. The list, published in US business magazine Forbes earlier this year, said what Myriota a fascinating company to watch is their innovative advances in ultra-low-cost satellite IoT connectivity and their alliances, including on with SpaceX. Myriota’s nano-satellite was launched on a SpaceX Falcon 9 rocket in December last year.
“Myriota uses exactEarth’s low-Earth orbit (LEO) satellite constellation for its connectivity solutions. Myriota is a global leader in low-cost satellite IoT connectivity, providing aggregated sensor reading, environmental sensing, and online tracking and condition monitoring of remote assets,” it said.
The companies on the list are mostly American, with a few from other nations, including Israel and China, with interests in IoT applications for industry, business and security.
Some have a presence in Australia but Myriota is the only one with a space focus.
Myriota emerged from the University of South Australia in 2015 to commercialise research conducted by Alex Grant and David Haley.
The company has developed a range of remote area connectivity solutions. For example, its water tank level monitoring system allows farmers to see water tank levels on their smartphone.
Data goes from the tank by nanosatellite to the cloud and from there to the farmer. Although other satellite operators can provide this type of service, Myriota says it can do it far cheaper.
The Forbes article noted that there are a very large number of IoT start-ups out there, with 6,792 firms relying on IoT as one of their main technologies to launch new products and services and support platform-based business models, according to the business database, Crunchbase.
Most of those are early in their development path but total IoT start-up funding reached US$16.7bn in fourth quarter last year, with total 2018 funding levels up 94 per cent over 2017.
Forbes said as a group, the top 25 IoT start-ups were showing early potential at enabling profitable new business models, revitalising industries that have experienced single-digit growth recently.
Each was taking a unique approach to solving some of the enterprises’ most challenging problems, and in so doing creating valuable new patents that further fuel IoT adoption and growth. Artificial intelligence widely features in their products. The list of 25 was derived from analysis of ability to attract new customers, current and projected revenue, value of patents and position in chosen markets. (Source: Defence Connect)
31 May 19. Kongsberg and Patria complete acquisition of AIM Norway. Kongsberg and Patria have completed the acquisition of maintenance, repair, and overhaul (MRO) provider Aerospace Industrial Maintenance (AIM) Norway from the Norwegian government under a NOK151m (USD17.2m) cash deal. Under the terms of a deal announced in December 2018, Kongsberg now holds 50.1% while Patria has 49.9% of the company, and is the result of an initiative that had been under way since 2015 to privatise a number of state-owned entities in Norway. The companies say that this acquisition will enable further consolidation of the Norwegian defence and aerospace industry for maintaining its fixed-wing aircraft and helicopters, and there are plans to develop AIM further, with investment planned. (Source: IHS Jane’s)