06 Feb 20. SAIC to Acquire Unisys Federal in Accretive, Strategic and Value Creating Transaction.
- Creates a leading digital transformation provider to the U.S. government.
- Accretive to key financial metrics including organic revenue growth, earnings, and cash.
- Adds intellectual property, technology-enabled solutions, and expands customer reach.
- $1.2bn transaction, including tax assets.
Science Applications International Corp. (NYSE: SAIC), a premier technology integrator, today announced that it has entered into a definitive agreement to acquire Unisys Federal, in an all-cash transaction valued at $1.2bn ($1.025bn net of the present value of tax assets of approximately $175m), in a highly strategic and value creating transaction. This represents a transaction multiple of approximately 10.5x CY2020 adjusted EBITDA, adjusted for the net present value of tax assets.
Unisys Federal, an operating unit of Unisys (NYSE: UIS), is a leading provider of infrastructure modernization, cloud migration, managed services, and enterprise IT-as-a-service through scalable and repeatable solutions to U.S. federal civilian agencies and the Department of Defense.
“With the addition of Unisys Federal, SAIC will be a leading provider of digitial transformation services and solutions to the federal government. This exciting opportunity advances our strategy by building on our modernization capabilities, increasing customer access, accelerating growth and enhancing shareholder value,” said SAIC CEO Nazzic Keene. “The financial benefits of acquiring Unisys Federal are compelling, including accretion of adjusted EBITDA margins, non-GAAP earnings per share, and cash generation.”
The transaction will further differentiate SAIC in the government services market by deploying technology-enabled, intellectual property-based solutions through a commercial–like service delivery model. The acquisition will further enhance shareholder value through a highly attractive financial profile, enabled through greater customer access and differentiated solutions in areas of higher growth profiles.
Strategic and Financial Benefits
- Enhances capabilities in government priority areas, including IT modernization, cloud migration, managed services, and development, security, and operations (DevSecOpps)
- Expands portfolio of intellectual property (IP) and technology-driven offerings, that enable government-tailored, commercial-based solutions
- Increases access to current and new customers with a strong pipeline of new business opportunities
- Highly accretive across all key financial metrics
SAIC expects to fund the $1.2bn cash transaction through a combination of cash on hand and incremental debt. The transaction is expected to close by the end of SAIC’s first quarter of fiscal year 2021, ending May 1, 2020, following customary closing conditions, including HSR regulatory clearance. The transaction has been unanimously approved by SAIC’s Board of Directors. The businesses will continue to operate independently until the transaction closes.
Guggenheim Securities, LLC acted as lead financial advisor and Citigroup Global Markets, Inc. acted as co-financial advisor to SAIC. King & Spalding LLP served as legal counsel to SAIC. Avascent provided business due diligence and strategy support services.(Source: BUSINESS WIRE)
05 Feb 20. Brazil declares its intention to privatise NUCLEP. The Brazilian federal government is seeking to sell the company Nuclebrás Equipamentos Pesados (NUCLEP) as part of a wider programme to raise an estimated USD323bn over the next few years through auctions of licences to operate infrastructure, and also through the privatisation of state-owned firms.
The privatisation of NUCLEP is scheduled to take place in the first half of 2020 by the Investment Partnership Program Council of the Ministry of Economy.
The intention to privatise NUCLEP was confirmed at the National Congress on 3 February by Brazilian President Jair Messias Bolsonaro.
No details were provided on the privatisation model and extension to be established. (Source: Jane’s)
04 Feb 20. Leidos to acquire L3Harris Technologies’ Security Detection and Automation businesses expanding product portfolio in high-growth, global security market.
Transaction adds complementary technology and products, creating a comprehensive security and detection portfolio
Projected to be immediately accretive to Leidos’ revenue growth, EBITDA margins and non-GAAP EPS upon closing
Accelerates innovation, diversifies revenues, enhances scale
Leidos Holdings, Inc. (NYSE: LDOS) (“Leidos”), a FORTUNE® 500 science and technology leader, today announced that it has entered into a definitive agreement to acquire L3Harris Technologies’ (NYSE: LHX) (“L3Harris”) Security Detection and Automation businesses, for $1bn in cash. The Boards of Directors of both companies unanimously approved the transaction.
L3Harris’ Security Detection and Automation businesses provide airport and critical infrastructure screening products, automated tray return systems and other industrial automation products. With headquarters in Tewksbury, Mass. and Luton, England, the combined businesses have 1,200 employees and a global sales and services operations footprint with more than 20,000 systems deployed world-wide across more than 100 countries. The businesses serve customers in the aviation, transportation, government and critical infrastructure markets.
“The acquisition of these businesses will help accelerate our growth and innovation and enable us to offer the market a comprehensive security platform,” said Leidos Chairman and CEO Roger Krone. “The businesses further our commitment to a diversified revenue stream, by expanding our customer penetration into 75 additional countries. This transaction is projected to be immediately accretive to revenue growth, EBITDA margins, and non-GAAP EPS upon closing.”
Krone continued, “This powerful portfolio of technology and the outstanding team of employees that support it complement the Leidos team well. The work this team performs is vital to securing so many important locations – where passengers count on equipment reliability and efficiency to keep them safe. This mission is consistent with our company’s goal of making the world safer, healthier and more efficient. Together, we will advance our strategy of helping secure some of the world’s most critical infrastructure and the individuals who travel through it. I look forward to welcoming these L3Harris employees to Leidos and working together to continue our important work.”
Compelling Strategic and Operational Benefits
- Expands Product Portfolio in High-Growth, Global Security Market: This acquisition adds complementary products that expand Leidos’ offerings to create a comprehensive security and detection platform. These products include checkpoint security products like checkpoint CT scanners, people scanners, comprehensive explosives trace detectors, checked baggage screeners and automated tray return systems (ATRS). The addition of this technology to the Leidos portfolio will enhance the company’s offerings in a global security product market projected to grow in excess of the federal budget.
- Diversifies Revenue Through Increased International Presence: This business expands our customer penetration internationally, helping deliver on a stated objective to diversify revenue globally. The deal will increase Leidos’ international security products revenue more than six-fold.
- Enhanced Scale Accelerates Growth & Innovation: The acquisition enables Leidos to complement its existing successful global border and port sales channel by leveraging the acquired businesses’ global airport sales channel across the full Leidos portfolio of product and service solutions. The acquisition also enables the company to leverage technology investments across the combined portfolio to accelerate innovation and improve service efficiency for customers.
The transaction is expected to be immediately accretive to Leidos’ revenue growth, EBITDA margins, and non-GAAP diluted earnings per share upon closing.
Leidos expects to fund the $1bn cash transaction through a combination of cash on hand and incremental debt.
Approvals and Timing
The transaction is expected to close by the end of the second quarter of 2020, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals.
Leidos retained Credit Suisse Securities (USA) LLC as financial advisor, and Fried, Frank, Harris, Shriver, & Jacobson LLP and DLA Piper as legal advisors in connection with the transaction. Leidos also retained PwC as operations and accounting advisor.
04 Feb 20. L3Harris looks to shed as much as 10 percent of company. L3Harris Technologies could divest up to 10 percent of the company, according to CEO Bill Brown, as its recent decision to sell its airport security business for $1bn is seen as the first of more transactions expected to refine the firm’s portfolio.
L3Harris signed a definitive agreement to sell the business unit to Leidos, according to an announcement Tuesday. The transaction is expected to close in mid-2020, barring any issues tied to regulatory approvals. Proceeds from the divestiture are expected to be used to repurchase shares and offset dilution.
The deal is part of a larger strategy to reshape the portfolio, focusing on what Brown described on a call with analysts as “high-margin, high-growth, technology-differentiated businesses where we can win and generate attractive returns.”
“Although this is the first and largest transaction we’re contemplating, our portfolio-shaping process is ongoing and may ultimately result in 8-10 percent of total company revenue being divested over time,” he said.
The company’s 2019 revenue of $18.1bn could translate to as much as $1.8bn in divestitures.
Brown told Defense News in June 2019 — one month before the merger of Harris and L3 Technologies was completed — about plans to divest a “pretty significant” piece of the business in the first six months as a single company.
“Anytime you put two companies with two portfolios together and you rethink what strategy you want to accomplish, there’s going to be some pieces of the portfolio at the back end of the bus,” Brown said at the time. “We have to look at where we want to put our management time, capital, and [research and development] investment. We can’t put it on pieces that might not be as strategic.”
Brown told analysts that the deal would not impact the company’s $3bn free cash flow target in 2022. That in theory would set up L3Harris for a sizable acquisition down the road, should the company choose to go in that direction.
A company spokesman could not comment on the specific defense-nondefense split post divestiture, but L3Harris would presumably see a larger slice of the business focusing on defense opportunities.
In the 2019 Defense News Top 100 list of the largest defense companies, Harris and L3 reported 72 percent and 81 percent of revenue as defense-focused, respectively.
L3Harris reported $18.1bn in fiscal 2019 revenue. Once the deal with Leidos closes, the airport security businesses’ $500m in annual revenue would transition off the books. That said, L3Harris is forecasting 5-7 percent revenue growth in 2020 — so it won’t be a straight reduction. (Source: Defense News)
04 Feb 20. Space Propulsion Innovator Accion Systems Raises $11m in Series B Funding. Company Ramps Up Production With Focus on Navigation, Maneuverability and Affordability for SmallSat Propulsion.
In-space propulsion system pioneer Accion Systems today announced that it is raising $11m in Series B funding. The round is being co-led by Boeing HorizonX Ventures and Shasta Ventures. The Series B round brings Accion’s total funding to date to $36m, which includes $14m in U.S. Department of Defense and NASA contracts. The new capital will be used to ramp up production of Accion’s next- generation product and to expand hiring.
Spun out of Massachusetts Institute of Technology (MIT) in 2014, Accion is redefining in-space propulsion. Accion’s TILE (Tiled Ionic Liquid Electrospray) propulsion system aims to increase the lifespan and maneuverability of satellites and other vehicles in space. Leveraging a non-toxic, ionic liquid propellant and postage stamp-size thrusters, the TILE system is smaller, lighter and more cost-effective than traditional ion engines.
“At the size of a postage stamp, our propulsion system is re-writing the rules of smallsat navigation and maneuverability,” according to Natalya Bailey, CEO of Accion Systems. “We’re excited to ramp up production and offer our clients benefits such as extending mission lifetime, station-keeping, and de-orbiting capabilities.”
Boeing HorizonX, an innovation and venture organization within Boeing, discovers, shapes and accelerates the next generation of game-changing ideas, products and markets through ventures investments, partnerships and trend discovery.
“Accion’s propulsion system brings new capabilities to satellites, space vehicles and ultimately, our customers,” said Brian Schettler, senior managing director of Boeing HorizonX Ventures. “Our support of Accion supports Boeing’s leadership in adopting next-generation technologies to advance satellite capabilities.”
Shasta Ventures led Accion’s Series A funding round and Rob Coneybeer sits on Accion’s Board of Directors.
“Only sixty satellites were launched during the first nine years of space exploration, but now there are that many smallsats launched in a single mission,” said Rob Coneybeer, managing director at Shasta Ventures. “A new approach to in-space propulsion and smallsat mobility is in order, and I believe Accion has the solution.”
Accion Systems has a number of launches already scheduled for 2020, including collaborations with student organizations at the Irvine CubeSat STEM Program in Irvine, CA and BeaverCube, an educational mission led by MIT to introduce university students to aerospace science and technology through designing a 3U CubeSat.
Accion also was recently one of fourteen companies selected by NASA as part of its Tipping Point partnership for Moon and Mars technologies. Accion’s in-space propulsion system will be used on replicas of the MarCO CubeSats, NASA’s first CubeSats that traveled on an interplanetary mission. Accion will work with NASA’s Jet Propulsion Laboratory (JPL) to replace the cold gas propulsion system that was used on the MarCO CubeSats with a more efficient ion electrospray propulsion system. Accion received $3.9m for the project, which was successfully kicked off in January 2020 and will launch in the summer of 2021.
About Accion Systems Inc.
Accion Systems develops advanced satellite propulsion systems for the space industry. Accion’s in-space propulsion technologies optimize scalability, performance and efficiency. Accion’s flagship product, TILE, uses proprietary ion electrospray thrusters, bringing electric propulsion to satellites of all sizes and redefining in-space capabilities. Accion Systems was founded in 2014 by Natalya Bailey and Louis Perna and is based in Boston, MA. (Source: BUSINESS WIRE)
04 Feb 20. Kongsberg Maritime signs agreement to sell its subsidiary Hydroid and enter into alliance to provide future solutions to the US Navy. Kongsberg Maritime AS has signed an agreement to sell its underwater technology company Hydroid, Inc. for USD 350m to Huntington Ingalls Industries (HII), the largest supplier of vessels to the US Navy. The agreement provides that, as of closing, the parties will enter into a strategic alliance agreement concerning underwater technology and maritime solutions.
Kongsberg Maritime acquired Hydroid for US$80m in 2007 and is now selling this US subsidiary for USD 350m on a debt-free and cash-free basis and as adjusted off an agreed upon working capital.
“Kongsberg Maritime has driven technology development and created considerable value during the 12 years it has owned Hydroid, and we are capitalizing on this now. We are proud to have positioned Hydroid as a leading supplier of small and medium-sized autonomous underwater vessels in the market. We now look forward to work together with HII on new, maritime solutions and, at the same time, strengthening our world-leading underwater environment in Horten,” says Geir Håøy, President and CEO of the KONGSBERG Group.
Kongsberg Maritime delivers globally first-class products to customers, including sensor and sonar technology and hydro acoustics from Horten in Norway. According to the agreement, the parties will enter into a strategic alliance at closing. It will combine the two companies’ complementary experience, expertise and technology. The aim of the agreement is to strengthen both parties’ abilities to sell their products and solutions to both US and global customers in the underwater segments.
“Kongsberg Maritime will continue to aggressively develop technology, including that related to our underwater expertise. We are the global leader in civilian-sector maritime technology, while HII is the world’s largest supplier of navy vessels. This alliance will allow a wider range of our maritime solutions for both naval and civilian usage in the United States and the rest of the world,” says Egil Haugsdal, President of Kongsberg Maritime. (Source: ASD Network/Kongsberg Gruppen)
04 Feb 20. QinetiQ Third Quarter Trading Update and Acquisition of Newman & Spurr Consultancy Limited. QinetiQ Group plc (QinetiQ or the Group) today issues a trading update covering its third quarter and announces the acquisition of Newman & Spurr Consultancy Limited (NSC).
Building on a strong first half to the financial year, the Group has continued to perform in line with our expectations. We continue to maintain our expectations for full year operating profit with high single digit revenue growth as previously outlined at our interim results in November 2019.
The EMEA Services division has continued to perform in line with our expectations delivering organic order and revenue growth compared to the prior year.
The Global Products division has also delivered organic order and revenue growth in line with our expectations.
Our strategy to build an integrated global defence and security company to deliver sustainable growth continues to gain momentum by focusing on our customers’ needs. In the third quarter, we have achieved a number of milestones that demonstrate we are delivering on our commitments to customers and pursuing further strategy-led investments to drive organic opportunities and complementary acquisitions.
We are delivering on our commitment to lead and modernise UK test and evaluation:
- We have achieved the third major milestone of the renegotiated Long Term Partnering Agreement (LTPA) contract on schedule, demonstrating that we are meeting our UK MOD customers’ requirements and successfully transitioning to the new ways of working.
- We have expanded the scope of the LTPA to include a Rapid Innovation Cell in the field of Counter-small Unmanned Air Systems (UAS) and we have successfully delivered new facilities at UK MOD Shoeburyness to assess missile safety and suitability to service, both critical to future warfare.
- The transformed Empire Test Pilots’ School (ETPS) successfully delivered the first year of its innovative syllabus using a new civil-registered fleet of aircraft. ETPS is seeing growing demand for its modern approach to test aircrew training from UK and international customers.
We are becoming a more international company, making strategic progress in our US home country:
- In December, we completed the acquisition of Manufacturing Techniques Inc. (MTEQ) following receipt of required regulatory approvals. MTEQ is a leading US provider of advanced sensing solutions with a strong reputation for mission-led innovation, rapidly developing and fielding operationally relevant solutions to deliver information advantage to the warfighter. QinetiQ’s new US business unit, created through the combination of QinetiQ North America (QNA) and MTEQ, represents 25% of the Group and delivers a number of strategic benefits including strengthening our innovation strategy and accelerating our growth in the US, the world’s largest defence market.
- In January, the US Army announced its intention to award the Robotic Combat Vehicle Light (RCV-L) program (https://www.namconsortium.org/sites/default/files/RCV-OTA-Award-Final.pdf) to QinetiQ. This provides an immediate opportunity to demonstrate the value of our new US business, by leveraging our advanced robotics and sensing technology to create a solution that enables the US warfighter to overcome the next generation of threats, increase force projection, and reduce cognitive burden.
We are increasing our focus on delivering mission-led innovation to meet our customers’ needs:
- Today, we announce that we have acquired Newman & Spurr Consultancy Limited (NSC) on a cash-free, debt-free basis for £14m. In the 12 months to 31 July 2019, NSC generated £5.9m of revenue and £1.3m of EBITDA. NSC offers a range of attractive training and simulation solutions, primarily in land and joint training areas. NSC represents another strategy-led acquisition, enhancing our capability in areas such as modelling and simulation, synthetic environments and operational analysis. The acquisition will support our global training and mission rehearsal campaign driving future sustainable growth.
- In January, our Space business secured a €75m new contract with the European Space Agency (ESA) to extend Europe’s capabilities in operational Earth Observation. As prime contractor, we will lead a consortium of companies to build the ALTIUS satellite, with final assembly at our new state-of-the-art cleanroom facilities in Kruibeke in Belgium.
This announcement contains inside information relating to the acquisition of Newman & Spurr Consultancy Limited and the person responsible for making this announcement is Jon Messent, Company Secretary.
QinetiQ will report its preliminary results for FY20 on Thursday 21 May 2020.
04 Feb 20. Sonardyne acquires underwater imaging and inspection specialist 2G Robotics. Leading marine technology provider Sonardyne International Ltd. has acquired underwater imaging and inspection specialist 2G Robotics Inc.
2G Robotics will join the Sonardyne group of companies, while remaining an independent business and brand, continuing to serve its customer base in unmanned and autonomous underwater vehicles (AUVs) and remotely operated vehicles (ROVs). 2G Robotics’ founder Jason Gillham will continue to lead the company as Chief Executive Officer.
The acquisition of 2G Robotics is the latest step in Sonardyne’s long-term growth strategy and follows the acquisition of Danish survey software company EIVA last year.
John Ramsden, Sonardyne’s managing director, says, “2G Robotics has a dedicated research team and well developed product and service lines, with scope for growth. As an independent company, their offering is complementary to the growing range of products and services our wider group of companies provides to the marine sector.”
Jason Gillham adds, “Sonardyne is a great fit for us, with their existing global reach. We look forward to growing with their support and working with our new partners.”
2G Robotics is based in Ontario, Canada. The company was founded in 2007, and will continue to operate from its current location. The terms of the acquisition, which was for the business and assets of 2G Robotics Inc., were not disclosed.
03 Feb 20. Cohort Plc was notified on 31 January 2020 by the trustees of the Cohort Employee Benefit Trust (“EBT”) that they purchased 100,000 ordinary shares of 10 pence each in the Company on 31 January 2020 at a price of 690.00 pence per share. The shares held in the EBT are intended to be used to satisfy awards made under the Cohort employee share schemes.
The EBT is a discretionary trust for the benefit of employees of Cohort plc and its subsidiaries. The Executive Directors of Cohort plc are included in the class of beneficiaries of the EBT and are deemed to be interested in those shares and the dealings thereof.
Following these transactions, a total of 135,744 ordinary shares, representing 0.33 per cent of the Company’s total voting rights, are held in the EBT.
03 Feb 20. Build a defensive portfolio. If the svengali lurking in the shadows of 10 Downing Street gets his way, 2020 may be one of the most disruptive years for British defence since the Second World War. The Prime Minister’s chief adviser Dominic Cummings is expected to rip up the government’s procurement strategy, having reportedly described it as “disastrous” and expressing special contempt for the Ministry of Defence’s (MoD) £6.2bn purchase of two aircraft carriers.
The Treasury will likely welcome cost saving initiatives. The MoD currently faces a funding black hole of £7bn that could stretch to £15bn over the coming decade, according to the National Audit Office. A Strategic Defence and Security Review (SDSR), which last took place in 2015, is imminent. Defence giants like BAE Systems (BA.) and Babcock (BAB), which hold an array of government contracts, may be concerned over the future of these lucrative cash flows and repeat orders.
One industry observer is unpersuaded by the idea that Mr Cummings will succeed in slashing defence expenditure. Defence and aerospace analyst Howard Wheeldon argues that outsiders with grand ambitions for cuts can end up achieving the opposite outcome. “They come in with great ideas and great ambitions to save money, but actually they most often end up increasing the spend because of the delays and the trouble that they actually cause,” he observes. Babcock, which is building MoD’s aircraft carriers, isn’t vulnerable to threats on these vessels, he says. Rather, it could be exposed to the impact of base closures, which will likely be enacted in a bid to lower costs. The company is heavily involved in support services for the UK’s military bases.
There remains a litany of business contracts for defence companies in the air, and beyond. The Typhoon programme, which is partly-managed by BAE and carries components from Rolls-Royce (RR.), Meggitt (MGGT), Ultra Electronics (ULE) and Senior (SNR), will remain airborne for decades to come. Typhoon’s eventual successor, Tempest, is also being directed by BAE, and the initiative will offer more opportunities for these players.
The rise in cyber risk and our dependence on communications will compel the MoD to beef up its space capability, Mr Wheeldon says. No astronaut has ever been into space without Cobham kit, but the company, which largely specialises in air-to-air refuelling, has been taken over by US private equity firm Advent International. QinetiQ (QQ.) operates in similar areas to Cobham, producing everything for Earth to satellite, from space security to avionics. BAE and Meggitt are also active in space, but to a lesser extent.
Global defence expenditure is booming and British players aren’t limited to UK government defence contracts. Defence is a rare kind of industry that is dominated by a few government buyers – the Five Eyes network, which is comprised of the UK, the US, Canada, Australia and New Zealand is fertile ground for defence work. In Korea, Babcock is investing heavily in support of the nation’s submarine programme.
But the sensitive nature of this business also limits ventures into emerging defence powers – the Gulf aside, it is very difficult for British defence companies to latch onto rising expenditure in nascent (or resurgent) nations like China and Russia, owing to national security requirements. Saudi Arabia, where BAE generates around 14 per cent of its turnover, has proven problematic owing to the regime’s involvement in the Yemen conflict, where it has employed Typhoon aircraft and faced accusations of war crimes. There is a temporary UK government block on new contracts that may be connected to the conflict, which could affect a pending Saudi Typhoon order. Germany has refused to participate in the contract. Investors would be wise to limit their exposure to contracts that are vulnerable to legislative and judicial changes. Moral risk is never far from defence.
QinetiQ shares have risen 22 per cent since our April buy tip, in which we cited its strong balance sheet, its move to diversify revenue stream having previously been over-reliant on the UK government and its acquisitions track record. The orders continue to flow in for the defence engineer, which also leveraged its extensive capital firepower to agree a deal to acquire US sensing solutions specialist MTEQ for $105m (£80.5m) in October, a move that will more than double its US presence.
Rolls-Royce shares are down 26 per cent since our April sell tip. The aerospace engineer continues to be plagued by blade deterioration issues in its Trent engine programme, with Rolls expecting total in-service cash costs of around £2.4bn across 2017-2023. Engineering group Senior (SNR), meanwhile, is exposed to the grounding of the Boeing 737 Max jet, for which it supplies airframe and engine components. (Source: Investors Chronicle)
04 Feb 20. Micro Focus chairman Kevin Loosemore exits as group’s woes intensify. Shares plunge after software company warns performance is unlikely to pick up until 2021. Kevin Loosemore, the executive who transformed Micro Focus from a small Newbury software firm into Britain’s largest listed technology company, has left the business after 15 years, as it continues to struggle with its reverse takeover of Hewlett-Packard’s software assets. Micro Focus, which dropped out of the FTSE 100 in September, lost a further 14 per cent of its value on Tuesday after it warned that it did not expect its performance to improve until 2021, revealing the results of a strategic review alongside news of Mr Loosemore’s departure. The company’s shares have crashed 60 per cent since July, after it issued multiple warnings as it struggled to integrate the HP business, which includes its Autonomy software operation. That decline cost it the mantle of the UK’s largest listed technology business because it slipped below Sage and Aveva, two other veterans of the UK software sector. The review, announced in August, was expected to lead to the disposal of a number of product lines including IDOL, the search technology developed by Autonomy. Instead the company said it would spend two years restructuring to create distinct security and big data businesses within it. George O’Connor, an analyst at Stifel, said that no buyer had emerged for the businesses that were expected to be sold. He slashed his forecasts for 2020 because of the weak guidance but said that Micro Focus had bounced back from previous downturns in 2005 and 2012.
Citi analyst Amit Harchandani said the review was disappointing. “While representing steps in the right direction, we were hoping for more concrete actions around portfolio and more definitive timelines to track the turnround of the business.” Last year’s crippling revenue warning came two years after Micro Focus completed an audacious $8.8bn reverse takeover of HP’s troubled software business. That deal included the remnants of Autonomy, which HP had bought for $11.7bn but then largely wrote off a year later, blaming “accounting improprieties”. Micro Focus, which specialises in rolling up older software products and squeezing more profit out of them, was confident that it could turn round the performance of the HP assets but has struggled to convince investors it has not bitten off more than it can chew. Mr Loosemore will be replaced as chairman by Greg Lock, who has held similar roles at a host of companies including Computacenter and Informa. Like Mr Loosemore, Mr Lock is a veteran of IBM. Micro Focus praised Mr Loosemore’s 15-year stint at the business, which he joined in 2005 when it had revenues of $100m. That compared with revenue of $3.3bn in the year to October, which was down 8 per cent on the previous year. The company said it had delivered compound annual returns to investors of 20 per cent under Mr Loosemore’s reign. His tenure has also been controversial due to a lavish bonus scheme designed to pay out millions to investors based on the rapid expansion of Micro Focus. (Source: FT.com)
16 Jan 20. Pacific Defense Acquires Spectranetix, Inc., An Advanced Developer of Military Modular Open Systems Architecture CMOSS/SOSA Technologies. Pacific Defense and Spectranetix today announced that they have entered into a definitive agreement under which Pacific Defense has acquired Spectranetix. Spectranetix designs and builds advanced, military standards-based, modular open systems architecture (MOSA) systems. These systems conform to the Army’s C4ISR Modular Open Suite of Standards (CMOSS) and the Air Force’s Sensor Open Systems Architecture (SOSA) Standard. These CMOSS/SOSA systems are used for multi-mission electronic warfare, tactical communications, signals intelligence, cyber-EW, high speed computing or simultaneous combinations of these capabilities. Spectranetix will become a key platform within Pacific Defense’s corporate portfolio.
“Spectranetix brings world-class engineering and technologies to Pacific Defense, solidifying our presence in the defense electronics and CMOSS/SOSA market,” said Travis Slocumb, CEO of Pacific Defense. “We’re also making strategic investments into advanced software applications running on these CMOSS/SOSA systems, such as advanced artificial intelligence (AI) and machine learning (ML) applications, communications waveforms, and electronic warfare techniques. Pacific Defense will be the major player in this future of multi-mission, standards-based, AI/ML enhanced military electronics.”
“We are very excited to join Pacific Defense and to continue ramping our rapid growth,” said Rick Lu, President & CEO of Spectranetix. “This move instantly amplifies our capabilities, grows the organization, and reinforces our engineering team with additional resources. The acquisition will help accelerate our products and technologies to our important government, military and intelligence customers. We plan to take this to the next level and remain the largest supplier of CMOSS/SOSA equipment to the Primes and the military, with robust software applications, toolkits, and AI/ML enhancements.” (Source: Armada/