25 Jun 20. Maxar Technologies Announces Exercise of Call Option to Acquire Vricon, Inc.. Maxar Technologies (NYSE:MAXR) (TSX:MAXR), a trusted partner and innovator in Earth Intelligence and Space Infrastructure, today announced that it has exercised its call option to take full ownership of 3D data and analytics firm Vricon, Inc., for approximately $140m, or approximately $115m net of estimated cash at closing. Maxar intends to fund the transaction using the proceeds from its issuance of $150m in aggregate principal amount of new senior secured notes.
Vricon is a global leader in satellite-derived 3D data for defense and intelligence markets, with software and products that enhance 3D mapping, Earth intelligence data, military simulation and training and precision-guided munitions. The company was formed as a joint venture between Maxar and Saab in 2015 to combine patented Saab IP with Maxar commercial satellite imagery to build highly accurate, immersive 3D products at scale. Maxar expects the transaction to close in July, subject to certain customary closing conditions. (Source: BUSINESS WIRE)
25 Jun 20. BAE Systems plc – pre close market update. BAE Systems plc provides the following update in light of the ongoing COVID-19 pandemic and ahead of entering its close period before the Half Year results announcement on 30th July.
Current business priorities
Given the critical nature of the products and services that we provide to a number of nations, the important role we play in national economies and the local communities in which we operate, the Group has continued to focus on its near-term priorities:
1) Protecting the wellbeing of our employees
2) Meeting customer priorities as they face unique challenges
3) Supporting our supply chain in dealing with pandemic related disruption
4) Preserving and protecting our capabilities and the strength of the Group’s business which is underpinned by our c.£45bn order backlog and programme positions
5) Ensuring that we maintain appropriate liquidity and balance sheet strength
In parallel, we have taken actions to enhance the Company’s resilience and position the business towards a return to full operational tempo. In many of our defence operations, the number of employees now working has progressed to near normal levels, whether through working on site in accordance with adjusted protective safety measures or through working remotely from home.
Based on current expectations, further improvements are expected to be progressively achieved during the third quarter.
We continue to drive the key actions as outlined in February:
- Completing the two US acquisitions, one of which completed in May
- Injecting a one-off £1bn payment into the UK pension scheme, which took place in April
- Investing in new facilities to meet the growth profile in a number of sectors
Supporting governments and communities in our key markets
We continue to support governments and communities in the countries where we operate as they respond to the COVID-19 pandemic. We have deployed our 3D printing capabilities and collaborated with our supply chain to donate more than 150,000 items of Personal Protective Equipment (PPE) to healthcare workers in the US and the UK. We are proud to support ventilator production as part of the VentilatorChallenge UK consortium. We are also supporting our communities in the US, UK, Australia and Saudi Arabia through the provision of online educational resources for young people as well as financial support to healthcare providers and local charities to enable them to provide care packages and food relief to the most vulnerable. Much of our outreach work has been supported by our employees who have volunteered their time and skills to help local relief efforts. We are also delighted to be proceeding with our plans to recruit a record number of apprentices, some 800 in total across a wide number of our sites.
As expected, the pandemic has impacted the business in the second quarter, with sites in the Air and Maritime sectors and our US commercial avionics business being most affected. However, as a result of the actions taken, productivity levels in June have improved within our defence businesses (which account for around 90% of the Group’s revenues). Many of these operations now have well over 90% of employees working. This includes a high proportion working from home and critical on-site workers having returned under adjusted protective safety measures in response to the pandemic. In parallel the business continues to drive cost control measures.
Within our UK-based Air and Maritime sectors, second quarter disruptions have particularly impacted cost recoveries and sales volumes, offset to some degree by strong underlying operational performance and cost control measures. Product delivery levels in MBDA have also been impacted given the European locations of its factories.
Our US-based Controls and Avionics business has been and is expected to be impacted for the near-term, especially in the commercial aftermarket and product delivery lines. The Power and Propulsion business has been impacted by the reduced demand for mass transit in recent months, and commercial cyber operations have also seen reduced trading levels.
In the US, our defence manufacturing facilities and shipyards have continued to operate following implementation of appropriate safe working measures. There has been some disruption to manufacturing operations primarily due to the pandemic’s impact on the supply chain, as well as some intermittent production delays in our own lines where precautionary measures to reduce COVID-19 exposure were necessary.
Programme status update – key highlights
In the second quarter, despite having to rapidly adjust to new working practices the defence business has continued to deliver strong operational performance in support of our customers’ critical activities. A number of highlights include:
- Astute Boat 4 and the fourth Offshore Patrol Vessel were accepted by the Royal Navy, and HMS Queen Elizabeth was able to commence the next phase of Royal Navy sea trials.
- Key milestones on the Qatar Typhoon programme were achieved.
- The Combat Mission Systems Business continued to make progress towards achieving consistent quality and production across multiple combat vehicle programmes by investing in modernising facilities and implementing improved manufacturing technologies.
- APKWS® successfully demonstrated a ground-launch capability.
Demand for our capabilities remains high with order intake in line with our original expectations for the year
Sales for the half year are expected to be broadly stable year on year whilst half year profit is expected be c.15% lower than last year primarily due to cost under recoveries in the period, significantly reduced volumes in higher margin commercial work and the sales mix year on year. As we return towards full operational tempo we expect the business performance in the second half to be much stronger than in the first half, assuming no new significant COVID-19 related disruptions.
The liquidity of the Group remains strong. As in prior years, cash has a significant first half working capital outflow. Despite some additional profit to cash impacts from COVID-19 disruptions, operating business cashflow in the half-year remains broadly in line with expectations and, excluding the one-off £1bn injection into the UK pension scheme, is likely to be consistent with the first half cash profiles seen in the last two years.
The $275m acquisition of the Airborne Tactical Radios business completed in May and its integration into the Electronic Systems C4ISR Systems business is underway. The proposed acquisition of the Collins Aerospace Military Global Positioning System business continues to fulfil the closing conditions and remains on track to close early in the second half
In line with the new funding contributions outlined in February 2020, both the £240m contribution in respect of the scheme year ended 31 March 2020 and the one-off £1bn raised through the bond issuance in April have been made.
Final dividend payment
Following the announcement in April to defer the decision on the 2019 final dividend payment, the Board will provide an update with the Group’s Half Year results next month.
25 Jun 20. BAE Systems set for second-half bounce-back suggest UBS.
BAE managed to achieve some key milestones on the Qatar Typhoon and in Maritime most notably. BAE Systems PLC (LON:BA.) should see a much stronger second-half performance as operations return to normal following coronavirus disruption, according to broker UBS.
The defence equipment giant warned earlier that first-half profits to June will be 15% below a year ago due to disruption from the pandemic.
Higher margin areas such as passenger jet electricals and transport systems had been worst affected, though it said factories in Britain were now 90% back at work.
Swiss firm UBS said that despite the disruptions, BAE managed to achieve some key milestones on the Qatar Typhoon and in Maritime most notably.
As demand for BAE Systems capabilities remains high the order intake is in line with initial expectations pre-COVID-19, the broker added.
Interim sales will be flat at around £9.4bn with underlying profits 15% down at £850m, but UBS expects there to be a strong second half thanks to a recovery of operational tempo assuming no new significant COVID-19 disruption.
The broker forecasts underlying profits of £1,1bn and sales for the year of £19.9bn.
BAE said that following the announcement in April to defer the decision on the 2019 final dividend payment, it will update with the half-year results next month.
Shares were unchanged at 480p against UBS’s 12-month target price of 511p. (Source: proactiveinvestors.co.uk)
24 Jun 20. Elbit Systems Announces Receipt of Anticipated Notice From NASDAQ Resulting From a Previously Announced Resignation of an Independent Director. Elbit Systems Ltd. (NASDAQ: ESLT) and (TASE: ESLT) (“Elbit Systems” or the “Company”) announced today that, as anticipated, it has received a notice of deficiency (the “Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it is not in compliance with Nasdaq Listing Rule 5605(b)(1) which requires that a majority of the board of directors of a listed company be persons who qualify as “independent directors” under Nasdaq’s Listing Rules. As a result of the June 17, 2020 resignation by Mr. Moshe Kaplinsky, who was an independent director, the Company’s board of directors consists of an equal number of independent and non-independent directors.
On June 17, 2020, the Company announced (i) Mr. Kaplinsky’s resignation, (ii) the Company’s notice to Nasdaq that the Company would be temporarily out of compliance with the independent directors majority requirement and (iii) the Company’s intent to promptly proceed with the process of identifying a suitable candidate for election as a director and convening a shareholders meeting for his or her election, within the period contemplated by Nasdaq’s Listing Rules.
The Notice does not impact the Company’s listing on the Nasdaq Global Select Market at this time, provided that the Company cures the deficiency under Nasdaq Listing Rule 5605(b)(1) within the time period specified by the applicable Nasdaq Listing Rule. For this purpose, Nasdaq Listing Rule 5810(c)(3)(C)(E) requires the Company to cure the deficiency by the earlier of its next annual shareholders meeting or one year from the event that caused the deficiency (the “Event”); however, if the Company’s next annual shareholders’ meeting is held sooner than 180 days after the Event, then the Company has 180 days from the Event to cure it.
The Company is also listed on the Tel Aviv Stock Exchange and the Notice does not affect the Company’s status with such listing. (Source: BUSINESS WIRE)
24 Jun 20. LinQuest and nLogic Partner Under SBA Mentor-Protégé Program.
New Joint Venture “LogicQuest” to expand business opportunities and geographical influence.
nLogic, announced a collaboration to facilitate superior growth for both organizations and their respective government and industry clientele under the Small Business Administration’s “All Small Mentor-Protégé Program.”
This partnership will embody the SBA’s mission to maintain and strengthen small businesses, like nLogic, by partnering with mature organizations to acquire best-in-class business practices and guidance. Effective immediately, LinQuest will serve as a trusted mentor to nLogic by offering technical and managerial counsel and supporting business development initiatives.
With our shared mission to accelerate and expand business, this strategic partnership plays an integral role in LinQuest’s continued growth, especially in the Huntsville, Alabama marketplace,” said Tim Dills, President, and CEO of LinQuest. “We are optimistic about the future and believe this partnership will help nLogic mature its capabilities, and simultaneously expand both of our services at the nexus of the aerospace and defense industries in Huntsville and beyond.”
“LinQuest’s excellent reputation, wide range of capabilities, and alignment with our own vision make this partnership an obvious decision. We look forward to maturing our business processes and market strategies to expand our customer base through our joint venture called LogicQuest,” said Tim Thornton, nLogic CEO and President.
About LinQuest Corporation
LinQuest is a space systems technology company that provides innovative services and solutions to U.S. defense, national security, and intelligence communities that focus on the convergence of C4ISR, information, and cyber systems. These services and solutions span the integration, engineering, testing, operations, and sustainment of critical space, air, and ground systems capabilities and programs. More information can be found on the company’s website at www.linquest.com.
About nLogic, LLC
nLogic is a Huntsville-based, employee-owned company that provides systems engineering & integration, software lifecycle, modeling & simulation, logistics, IT, and cybersecurity support to government and industry clients. More information can be found on the company’s website at www.nLogic.com. (Source: PR Newswire)
24 Jun 20. BAE Systems announced that revenue for the six months to 30 June is expected to be stable year-on-year, but profit is guided to be 15 per cent lower. Covid-19 has disrupted cost recoveries and reduced volumes in higher margin commercial work. The group expects a stronger second half performance. (Source: Investors Chronicle)
24 Jun 20. Disposal of Boldon James to HelpSystems. QinetiQ today announces it has reached an agreement to sell Boldon James Limited (“Boldon James”) to HelpSystems International Limited (“HelpSystems”) for a consideration of £30m.Boldon James provides data classification and secure email messaging solutions, and in the year ended 31 March 2020 generated revenue of £9.1m.
Boldon James was acquired by QinetiQ in 2007 and has been reported within Global Products. The decision to divest Boldon James was a strategic choice to allow increased focus on our core capabilities to deliver mission-led innovation; the cyber and information domain remains a strategic growth area for QinetiQ where we see good opportunities.
Steve Wadey, QinetiQ CEO, said: “Our vision-based strategy to drive growth through mission-led innovation means that we continually review our portfolio of businesses for their contribution to growth within the Group. We are therefore delighted to have announced the sale of Boldon James to HelpSystems, who can provide greater synergies and relevant market access to enable their future growth.”
BATTLESPACE Comment: Qinetiq acquired Boldon James for £15,700.00 in the heady days when Cyber was seen as the golden future for the defence and security industries. Indeed, the Editor had planned to launch a cyber magazine in 2011 but was warned by a young cyber expert, Richard Pain, that there was not a pot of gold at the end of the rainbow! Richard had done a cyber dissertation at King’s College, London. In any event we still held the launch party at the Spy Museum DC! This disposal is another example of large primes disposing of cyber divisions to specialist companies as margins disappear and the specialist staff required to run the business migrate to the specialists. Qinetiq hasn’t lost or gained a lot from this disposal but it signals Qinetiq’s exit form the sector. More disposals are likely from other majors.
23 Jun 20. CENS Materials, a portfolio company of INCUBIT, Elbit Systems’ deep-tech incubator, raises $1.5m. The company’s groundbreaking nanotechnology significantly improves performance of Li-Ion batteries used in electric vehicles, drones and energy storage plants.
CENS Materials, a portfolio company of Incubit Ventures completed an investment round of $1.5m, led by the UK based investor Vincent Tchenguiz (Consensus Group), a prominent foreign investor in Israeli hi-tech. The company was established at Incubit, Elbit Systems’ technological incubator, investing in early stage, deep-tech startups.
CENS develops a proprietary, industrial process, that significantly increases the battery’s energy capacity and cuts the charging time, both are critical elements for electric vehicles (EV), drones, and other devices powered by batteries. CENS’ solution is based on carbon nanotubes (CNT), whose contribution to electrical conductivity is well known, but to date, no one has succeeded to implement this material into batteries without significantly increasing the cost.
CENS solution is a powder in/powder out process, therefore it does not affect the existing production line and does not require infrastructure modifications. It is based on the common Li-Ion technology with an addition of one industrial step in the process. Furthermore, this solution can cause cobalt to be a redundant component in the battery, which might have a huge impact on cost and environment.
CENS’ CEO and founder, Michael Bromfman, an expert in Nanotechnology, noted: “The investment will serve us to establish a semi-industrial plant capable of manufacturing premium batteries with an enhanced capacity that will be supplied to top OEMs and Tier 1 in the EV industry”. “Our unique, deep research based technology, has the potential to disrupt the market and remove the bottleneck in the EV industry – the battery performance and cost”.
Incubit, Elbit Systems’ Technological Incubator, is an Israel-based incubator, franchised by Israel Innovation Authority, committed to investing in deep technology: unique, differentiated, protected or hard to reproduce, based on technological or scientific advances. It helps entrepreneurs of deep technology navigate the journey from concept through POC and into product launching and business success.
About Vincent Tchenguiz (Consensus Group)
Consensus Group (CBG) is an investment company with portfolio in areas such as pharma, biotech, med-tech, cleantech, real estate and more. The company has an investment portfolio of $ 600m worldwide, mostly in life sciences, cyber, and technologies that cope with climate change challenges.
23 Jun 20. Lockheed Claims F-35 Jobs, Economic Impact Jumped by Up to 30% in Two Months. The economic impact of the F-35 Joint Strike Fighter program has increased by 15% to 30% between March and May 2020, according to monthly reports published by the company.
The claimed increases concern the number of “top-tier suppliers” involved in the program (+30%), the number of jobs it supports in the US (+15%), and its total economic impact (+10%), which appear improbable in just two months. Furthermore, the two months in question coincide with the COVID-19 pandemic, which substantially limited industrial activities throughout the United States.
Lockheed did not respond to e-mail questions made outside of office hours.
These figures are published in the two-page “F-35 Lightning II Program Status and Fast Facts” that the company regularly posts on its dedicated F-35 website, at www.F35.com. The March and May monthly reports are no longer available, and have been replaced by the current version, dated June 1. This version reproduces the same “Economic impact” figures as the May 1 report.
On May 1, Lockheed reported without any explanation that the number had increased to “1,900+ top-tier suppliers around the globe, including more than 1,800 U.S. and Puerto Rico-based suppliers.”
This is an increase of about 30% compared to its March 3 report, which said that “1,500+ top-tier suppliers around the globe, including more than 1,400 U.S. and Puerto Rico-based suppliers” are involved in the F-35 program.
The same reports also state that the number of “direct and indirect jobs supported in the US” had increased from “over 220,000” in March to “over 254,000” by May 1, an increase of over 15% in two months.
Furthermore, Lockheed reported in March that these jobs were located in “45 U.S. states and Puerto Rico,” but by May 1 this had increased to “48 states and Puerto Rico,” adding three unidentified states to the F-35 industrial base.
And, while the company claimed in March that the program had “over $44.2bn of total economic impact,” this had increased to “over $49bn to total economic impact in the US” alone – an increase of $5bn, or over 10%, in two months. (Source: Defense-Aerospace.com)
19 Jun 20. Carlisle Companies Announces the Termination of its Acquisition of Draka Fileca. Carlisle Companies Incorporated (NYSE:CSL) today announced the termination of its previously announced agreement to acquire Draka Fileca SAS from Prysmian SpA. The agreement terminated due to regulatory approval not being received for the transaction prior to the expiration of the parties’ agreed time period to satisfy closing conditions.
Chris Koch, Chairman and Chief Executive Officer, said “While we were enthusiastic about completing the transaction, unfortunately, the COVID-19 pandemic contributed to the delay in timely receiving the necessary regulatory approval. While disappointed, we remain focused on being the supplier of choice to our North American and European aerospace customers, and committed to expanding our industry leading product offerings and capabilities. Carlisle Interconnect Technologies (CIT) is a global leader of aerospace electrical wire and fiber optic cable technology and will continue to pursue strategic and synergistic M&A opportunities for our aerospace platform in accordance with Vision 2025.” (Source: BUSINESS WIRE)