Sponsored by TCI International Inc.
07 Oct 20. Xenith Solutions, LLC Acquires TRI-COR Industries. Xenith Solutions, LLC, a business solutions provider to the defense and civilian agencies, announces today that they have acquired TRI-COR Industries (TCI), a full lifecycle enterprise business and IT solutions company with 35+ years of successfully delivering cutting edge information technology solutions to the federal and local governments.
TRI-COR Industries, founded in 1983 by Louis Gonzalez, was built on the need for high performance computer systems to address data processing requirements for the federal government. Since then, TRI-COR Industries has established a successful reputation of solving complex problems and delivering value to their clients.
Xenith’s acquisition of TCI brings over 100 years of combined knowledge and expertise in delivering mission critical IT solutions across both Defense and Civilian agencies such as the U.S. Air Force, U.S. Transportation Command, and U.S. Department of Homeland Security. As a company certified with CMMI Level 3 in Service and Delivery and ISO 20000-1:2011, ISO 27001:2013 and ISO 9001:2015, customers can expect continued and improved cutting-edge technical expertise, on-time performance, consistent cost controls, ethical business practices, and application of industry best practices for management, quality and security.
Upon the finalization of the planned transaction, Xenith Solutions will acquire TCI’s assets, team members, industry certifications and customer contracts. TCI will be maintained as a wholly owned subsidiary within Xenith Solutions. TCI, under Xenith Solutions’ leadership, will provide mission focused innovations and flexible business solutions resulting in time efficiency and sustained cost savings.
“We are excited to come together as one organization. Lou has built a great company with people who excel at problem solving and delivering high-caliber business results with a corporate culture built on integrity and creativity,” said Lee Shabe, a founding partner at Xenith Solutions. “I am looking forward to the great work our teams will achieve together.”
“The Xenith team consistently brings a high-level of ingenuity and confidence to every project,” said Louis Gonzalez, President of TCI. “Our customers are going to appreciate the added depth of skills and experience the combined team will bring.”
About Xenith Solutions:
Xenith Solutions LLC is a Service-Disabled Veteran-Owned Small Business. We provide comprehensive, timely and relevant Solutions and Business Consulting support to our customers as a key partner. Our leadership brings over a century of combined experience in Defense and Civilian markets. Our employees possess experience in all aspects of solution development from requirements creation, development, test and evaluation, fielding, and sustainment. At the core of our offerings we provide strategy and technology solutions, giving our customers valuable insights and thought leadership on the best application of information technology to drive business objectives. Xenith focuses on solving complex business challenges facing our customers. Our “Success Through Achievement” work ethic means our customers receive quality solutions through our commitment. We pride ourselves on tackling some of the most difficult operational requirements our customers have – ensuring an appropriate match between the mission requirements, financials, schedule, and security. For more information, please visit: https://www.xenithsolutions.com/
About TRI-COR Industries:
TCI is a Full Lifecycle Enterprise Business and IT Solutions company, leveraging leading edge technology that delivers technology solutions to the federal and local governments. A CMMI Level 3 and ISO-certified company that provides large-scale, enterprise Agile solutions that fuse Scrum and Kanban, Extreme Programming (XP) engineering, and DevOps best practices. TCI represents, distributes, integrates, and provides solutions and technologies for DHS (ICE, TSA, USSS), USTRANSCOM, USAFMC, DLA and Orleans Parish Communications District. For additional information on TCI, please visit: http://www.tricorind.com/. (Source: PR Newswire)
08 Oct 20. Honeywell Acquires Rocky Research, A Technology Leader In Power And Thermal Management. Acquisition significantly expands Honeywell’s capabilities within its Aerospace portfolio.
Honeywell (NYSE: HON) has acquired privately held Rocky Research, a Boulder City, Nevada-based technology leader specializing in thermal, energy and power management solutions. This acquisition expands Honeywell’s existing, broad portfolio, which includes power generation systems, energy storage, and power and thermal management systems. It also combines Rocky Research’s proven research and development capabilities with Honeywell’s worldwide reach and engineering integration, test and production expertise.
The acquisition of Rocky Research positions Honeywell with an advanced capability in the fast-growing power and thermal management market. The combined, differentiated capabilities of Rocky Research and Honeywell will help reduce the size, weight, power and cost of thermal and power management and hardware systems. Rocky Research will be integrated into Honeywell’s Aerospace business.
“Rocky Research is an ideal addition to Honeywell’s expanding product portfolio. Effective cooling systems optimized for size, weight and power are critical to meet the growing need for aircraft electrification, unmanned and autonomous aerial vehicles, and related systems,” said Mike Madsen, president and chief executive officer of Honeywell Aerospace. “Rocky Research will augment Honeywell’s existing technology capabilities in these areas.”
Rocky Research’s sole owner, President and CEO, Uwe Rockenfeller, will join Honeywell and continue to serve as president, Rocky Research, which will be held as a wholly owned subsidiary focused on power and thermal research and development. Rocky Research’s current location in Huntsville, Alabama, will remain a key integration and testing site, and its headquarters in Boulder City will serve as a research and development center.
“Honeywell and Rocky Research are a highly complementary match, fortifying Rocky Research’s technology with Honeywell’s world-class supply chain and manufacturing resources to meet growing demands for this technology,” Rockenfeller said. “As a combined business, we will be able to provide our customer base with a full range of solutions, from prototyping and demonstration to complete product delivery and support.”
Rocky Research focuses on thermal management applications complementary to Honeywell Aerospace’s existing technologies. Rocky Research has won several major contracts supporting various U.S. Department of Defense projects, including providing power and thermal management systems to one of the U.S. Army’s highest priority programs. Beyond defense applications, Rocky Research also addresses emerging Homeland Security needs, including the protection of critical infrastructure like airports, power plants and stadiums.
Honeywell’s Aerospace portfolio includes an array of related solutions, including power generation systems that provide up to 1 megawatt of continuous output, state-of-the-art cooling systems, and technologies for pointing and stabilization.
Terms of the deal were not disclosed, and there is no change to Honeywell’s third-quarter outlook as a result of the acquisition. (Source: PR Newswire)
07 Oct 20. Momentus to Become Public Through Merger With Stable Road Acquisition Corp.
- Merger to create the first publicly traded space infrastructure company at the forefront of the new space economy
- Momentus partners and customers include SpaceX, Lockheed Martin, and NASA
- Momentus to become publicly listed through a business combination with Stable Road Acquisition Corp. (Nasdaq: SRAC, SRACU, SRACW) (“Stable Road”)
- Combined company will have an estimated enterprise value of approximately $1.2bn and will become listed on Nasdaq under the ticker symbol “MNTS” following expected transaction close in early 2021
- Pro forma for the transaction, Momentus will have approximately $310m in cash on the balance sheet, to be funded by Stable Road’s $172.5m of cash held in trust (assuming no redemptions) and $175.0m from a fully committed common stock PIPE at $10.00 per share, including investments from private equity growth investors, family offices and select top tier public institutional investors
Momentus Inc. (“Momentus” or the “Company”), a commercial space company offering in-space transportation and infrastructure services, today announced it has signed a definitive merger agreement with Stable Road Acquisition Corp. (Nasdaq: SRAC, SRACU, SRACW) (“Stable Road”) that will result in the Company becoming publicly listed. Upon the closing of the transaction, the combined operating company will be named Momentus Inc. and its securities will be listed on Nasdaq and trade under the ticker symbol “MNTS.”
Momentus graduated from the prestigious Y Combinator program and has raised venture and private funding from notable investors such as Prime Movers Lab, Y Combinator, Tribe Capital, University of Wyoming Foundation, Lerner Enterprise, Tony Robbins, Joe Montana’s liquid2VC fund and others.
The current size of the global space economy is expected to grow from an estimated $415bn to $1.4trn by 2030 driving demand for transportation and infrastructure services in space. With the significant market opportunity in the new space economy, Momentus is well-positioned to address the need for in-space transportation and infrastructure services. Utilizing a multi-pronged approach, Momentus is developing capabilities to provide critical infrastructure services: in-space transportation, satellite as a service, and in-orbit services. The Company has strong momentum from the rapidly expanding small satellite market, which is seeking low-cost and regular launch access to orbit. Momentus’ customers include satellite operators, satellite manufacturers, launch providers, defense primes such as Lockheed Martin and government agencies such as NASA. As of September 30, 2020, the Company had customer contracts which represent approximately $90m in potential revenue over the next several years.
Momentus is creating the first hub and spoke model in space by offering last-mile delivery in partnership with key launch operators, including SpaceX. Momentus offers its customers significantly more affordable access to space by combining the capabilities of low-cost launch vehicles and Momentus’ transport and service vehicles, powered by water plasma propulsion technology. Momentus plans to expand its offerings by providing a satellite as a service model for hosted payloads and an in-orbit service model for satellite deorbiting, life extension, refueling, and repositioning. In 2019, the Company successfully tested its water plasma propulsion technology in space.
Momentus has developed its first transport and service vehicle, Vigoride, to serve the needs of customers in Low Earth Orbit by delivering small satellites up to 750kg to precise destinations, and expects to provide hosted payload services, and in-orbit services. The Company plans to launch its first Vigoride vehicle in December 2020 with commercial customers and four to five Vigorides in 2021. The Company is developing two larger, more capable vehicles in its development plans: Ardoride in 2022 and Fervoride in 2024 with the goal of serving all orbits up to Geosynchronous Orbit and even Lunar Orbit and handling payloads of up to 4,000 kg. To extend the capabilities of gigantic rockets like SpaceX’s Starship and Blue Origin’s New Glenn, the Company is building its largest vehicle to date – Fervoride, which the Company expects to be capable of delivering up to 20 tons of cargo anywhere from Low Earth Orbit to Geosynchronous Orbit and into deep space. Fervoride is expected to be a pathfinder for the prospecting and use of space resources such as water from the Moon and asteroids and a technology enabler for the largest moonshot opportunities like solar energy generation in space.
“Momentus is at the forefront of the new space economy and is poised to capitalize on the significant growth opportunity as a first mover; we believe in a future where humanity is equipped with all it needs to flourish throughout the solar system,” said Mikhail Kokorich, Founder & Chief Executive Officer of Momentus. “Our mission is to provide the infrastructure services that support all industry beyond Earth. The technologies we’ve developed or built upon, including our groundbreaking water plasma propulsion, will support growing demand from the booming satellite industry with affordable, versatile and low risk transportation and infrastructure services across private companies, government agencies, and research organizations. We expect to deploy the proceeds of this transaction to support our rapid growth and operations, and to support our capital needs as we ramp up revenues. We are excited to partner with the Stable Road team and look forward to leveraging their capital markets expertise.”
Brian Kabot, Chairman & Chief Executive Officer of Stable Road added, “We set out to identify a disruptive company and Momentus was the most unique and compelling opportunity to create value through our investment, as we believe the Company is primed to be a leader in the rapidly growing new space economy. As the only public, pure-play commercial space company capable of revolutionizing space infrastructure, Momentus is poised to capitalize on its market-defining position. We are excited to partner with Momentus as the Company develops its technology portfolio, continues to leverage deep customer relationships across diverse private and public sector applications, and expands its experienced leadership team.”
Pursuant to the transaction, Stable Road, which currently holds approximately $172.5m of cash in trust, will combine with Momentus, which is estimated to result in a pro forma enterprise value of approximately $1.2bn. Momentus’ existing equity security holders will hold approximately 75% of the issued and outstanding shares of Class A common stock immediately following the consummation of the merger, assuming no redemptions by Stable Road’s existing public stockholders.
Cash proceeds in connection with the transaction will be funded through a combination of Stable Road’s cash in trust and through a $175.0m fully committed common stock PIPE at $10.00 per share, including investments from private equity growth investors, family offices and select top tier public institutional investors.
The boards of directors of both Momentus and Stable Road have unanimously approved the proposed transaction. Completion of the proposed transaction is subject to approval of Stable Road and Momentus stockholders and other closing conditions, including a registration statement being declared effective by the Securities and Exchange Commission, and is expected to be completed in early 2021.
Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Stable Road with the Securities and Exchange Commission (“SEC”) and available at www.sec.gov and on Momentus’ website at www.momentus.space. Stable Road will file a registration statement (which will contain a proxy statement/prospectus) with the SEC in connection with the transaction.
Evercore is serving as the exclusive financial advisor and capital markets advisor to Momentus. Cantor Fitzgerald & Co. is serving as capital markets advisor to Stable Road. Orrick, Herrington & Sutcliffe LLP is serving as legal advisor to Momentus, and Kirkland & Ellis LLP is serving as legal advisor to Stable Road. ICR is serving as investor relations and communications advisor to Momentus. Evercore and Cantor Fitzgerald & Co. are the private placement agents. (Source: BUSINESS WIRE)
08 Oct 20. COVID-19 to result in increased consolidation and fragmentation in defence manufacturing: Poll. The defence manufacturing sector was impacted by the COVID-19 pandemic due to diverse supply chains and manufacturing locations. The defence manufacturing sector was impacted by the COVID-19 pandemic due to diverse supply chains and manufacturing locations.
Verdict has conducted a poll to assess the impact of the pandemic on defence manufacturing.
Analysis of the poll results shows that the COVID-19 pandemic is expected to increase consolidation and fragmentation in the defence manufacturing industry, as opined by 63% of the respondents.
While approximately 36% of the respondents opined that COVID-19 will result in increased consolidation in the industry, 27% opined that fragmentation will increase. No substantial change is foreseen by the remaining 37% of the respondents.
The analysis is based on 345 responses received from the readers of Verdict’s defence sites Airforce Technology, Army Technology, and Naval Technology between 08 July and 29 September 2020.
COVID-19 impact on defence supply chains and manufacturing
Manufacturing in the defence industry has been impacted by the COVID-19 pandemic due to the branched-out supply chains of manufacturers. Components, equipment and subsystems are often obtained from different sources for manufacturing the final product. The COVID-19 pandemic forced governments, suppliers and manufacturers to review their supply chain operations and identify gaps.
The inability to source the required equipment even forced some of the manufacturers to alter their production lines to manufacture medical equipment such as ventilators and masks. During the initial stages of the pandemic in April, the Pentagon had announced that it anticipated a three month delay in major defence programmes due to disruption within the domestic and overseas supply chains.
Small businesses most affected
Small suppliers and businesses are the most affected by the disruptions caused by the pandemic, which ultimately impacts innovation in defence technologies.
Companies such as Lockheed Martin acted promptly by making accelerated payments to supply chain partners to sustain its manufacturing operations.
In the US, the Department of Defense (DoD) announced a $135m Defense Production Act Title 3 in June 2020, to sustain critical manufacturing capabilities including body armour, aircraft and ship building. The DoD announced agreements with a number of companies including Bethel Industries, GE Aviation, Spirit AeroSystems, Steel America, and Allied Systems to supply critical components to sustain defence manufacturing capabilities.
Demand for spares, however, is expected to decline due to reduced maintenance needs, according to Deloitte which also anticipates a slowdown in aircraft production. (Source: airforce-technology.com)
07 Oct 20. Tech winner in fight against Covid-19. Kromek (KMK:8p), a Sedgefield-based radiation detection technology company focused on the medical, security screening and nuclear markets, has announced annual results today. The Covid-19 impact on the business led to Kromek reporting an underlying cash loss of £400,000 on 9 per cent lower revenue of £13.1m. This had already been flagged at the time of the pre-close trading update from the £27.5m market capitalisation company (‘Stock picking value open to future gains’, 4 May 2020).
Of far more interest is Kromek’s subsequent $5.2m (£4m) contract extension by the Defence Advanced Research Projects Agency (DARPA), an agency of the US Department of Defence, for work on developing a mobile bio-security system capable of detecting airborne pathogens. That’s because the project is now expected to be expanded for use in the non-military sector in response to the outbreak of Covid-19.
Kromek has already developed a prototype to sample air and identify the presence of any biological pathogen – including Covid-19 or any mutant version that may emerge over time. The technology can be used to immediately flag the presence of someone with a contagious disease and allow effective mitigation of the risk of transmission. By placing samplers in high footfall areas, such as airports and hospitals, or where people are in close proximity for long periods, threats can be identified without having to individually test people. Knowing a carrier is infected with a disease before they infect further individuals is key to halting the onset of an outbreak and before it causes major global disruption. Non-military applications include use in shopping centres, sports arenas, theme parks, schools, hospitals, offices, airplanes, and cruise ships. Importantly, it’s incredibly accurate, giving a false alarm in just one in 800,000 tests.
Chief executive Arnab Basu revealed during this morning’s results call that Kromek will undertake field trials with the pre-production prototype collecting airborne samples from urban and rural locations starting in January, and has field tests scheduled in London with two UK government agencies: The Defence Science and Technology Laboratory (DSTL), an executive agency of the Ministry of Defence; and Defence Aviation Repair Agency (DARA). Kromek also plans for delivery of units for pilot deployment in the US in the first half of 2021.
It could be a saviour for the UK government given the problems it’s facing with its much maligned Covid-19 test and trace programme. It could also reverse the fortunes for shareholders who have seen the share price decline since hitting a 12-month high of 27p in May, losing two-thirds of its value and taking the price well below the 17.5p level of my repeat buy call in early May.
Share price decline
The major reason for today’s share price fall is that Kromek unexpectedly revealed a £13.1m write-down on a medical imaging contract due to Covid-19 which has disrupted both the shipment to hospitals and access onsite.
Work in progress had been stockpiled for delivery and recognised as revenue over the course of the past 30 months. With shipment originally scheduled for 2020 onwards now delayed, the carrying value of accounts receivable under contract (AROC) is dependent on Kromek being able to prove a shipping date. It is unable to provide this at present, hence the £13.1m write-down to AROC in the accounts. However, all the stock remains on Kromek’s balance sheet (and in its UK facilities) ready for shipment and delivery in the future, hence why the directors still expect the position to reverse, at which point Kromek can book a hefty exceptional credit. I am not sure investors have fully grasped this accounting point.
Kromek’s rebound potential
I am not sure they have grasped that a rebound in the 2020/21 financial year is on the cards either.
Firstly, Kromek has now started delivering on a delayed seven-year Original Equipment Manufacturer (OEM) contract worth US$58m (£45m) to provide its cutting edge CZT detectors and advanced electronics in state-of-the-art medical imaging detectors. The contract should deliver revenues worth “millions of dollars” in the current financial year, says Mr Basu. The same is true of another delayed contract from the 2019/20 financial year.
Secondly, the company continues to win new contracts in other parts of the business. Kromek was awarded $1.1m worth of contracts to add technical innovation capability to its D3S ‘dirty bomb detectors’ by US government agencies. They are proving popular in Europe, too, with the European Commission and Irish Civil Defence also using them. Given the heightened terrorism risk across the world, the 22 countries currently deploying the technology is likely to grow.
Thirdly, Mr Basu reassuringly notes that Kromek’s revenue is now back to pre-Covid-19 levels following the disruption of the first quarter to 31 July 2020. That’s important as it means that concerns over the company’s cash position should now ease, another reason for the share price fall since May. Finance director Derek Bulmer says that the company had gross cash of £9.4m at 30 April 2020 and gross debt of £5.6m. Since then it has strengthened its gross cash reserves by over £2m and varied bank covenants on its HSBC facility. Given that revenue has returned to pre-Covid-19 levels, and stocks are now being delivered on delayed contracts, the company should have the funding in place to operate without the need to tap shareholders. This may not have been made clear to investors.
The bottom line is that the 40 per cent share price discount to net asset value of 13p should reverse when investors cotton onto the huge commercial opportunities for Kromek’s ground breaking DARPA airborne pathogens technology that is being piloted. Buy. (Source: Investors Chronicle)
06 Oct 20. China’s CASIC targets international expansion. The China Aerospace Science and Industry Corporation (CASIC) – one of the country’s most important defence enterprises – has outlined plans to expand in both domestic and international markets. The plan is part of the group’s growth strategy during China’s 14th Five Year Plan (FYP), which runs 2021–25.
In a recent conference outlining its proposed development during the 14th FYP senior CASIC leaders said the group’s aim over the coming five years is to become a “world-class aerospace defence company” that supports China’s strategies for national defence development and economic expansion.
Yuan Jie, CASIC’s president, said the group is positioned to pursue “informationisation, socialisation, marketisation, and internationalisation” during the 14th FYP. This is reference to requirements to enhance technological innovation, support the development of Chinese society, industrial reforms to support market-oriented companies, and global expansion.
Underscoring the significance of the next five years for CASIC, Yuan also described the 14th FYP as a “decisive period” for the group, which is focused on developing and manufacturing products including missiles, advanced weaponry, space, and unmanned systems as well as their associated technologies and components.
Yuan went on to outline several priority areas for CASIC during the 14th FYP. These include corporate restructuring to optimise efficiencies and increased competitiveness, investment in advanced technologies in both civilian and military domains, to strengthen corporate leadership and skills, to “give prominence” to international operations and “enhance international market competitiveness”. (Source: Jane’s)
06 Oct 20. Will BAE ride in to save Rolls-Royce? Everything must go, or so it would seem. Canada’s Garda World Security has launched a hostile takeover bid for G4S (GFS), while US casino operator Caesars Entertainment has agreed to fork out around $3.7bn (£2.9bn) to acquire William Hill (WMH). Will these North American approaches form part of a wider push as a degree of normality returns to M&A markets? And is the UK a prime target given existing stock market valuations?
We are certainly coming off the back of a depressed period for dealmakers. The Office for National Statistics has revealed that the total number of M&A deals involving UK companies fell to 152 in the second quarter, down by two-thirds on the previous three months, with the 37 deals completed through May a particular low point.
Things may be looking up, assuming Covid-19 is indeed loosening its grip on our diseased collective psyche. The value of global M&A activity through July-September increased by 80 per cent from the previous quarter, helped along by Nvidia Corp’s (US:NVDA) $40bn tilt at Cambridge-based semiconductor designer Arm Limited.
It is not just that an M&A bottleneck had formed during lockdown, but the severe disruption to normal commercial activity has served to either highlight and/or exacerbate pre-existing problems within certain businesses, thereby rendering them more vulnerable to merger proposals, hostile or otherwise.
It is difficult to say whether the potential impact of a no-deal Brexit is reflected in UK multiples, but the benchmark valuation is at its lowest ebb in decades relative to the other main global indices.
The comparatively tech-lite weighting of the FTSE 100 may help to explain why top-tier valuations look anaemic relative to the US market and elsewhere. The value of the Nasdaq index is up by 23.9 per cent in the year to date, whereas a relatively mature and cyclical UK benchmark is down by a fifth. The reality is that even if the UK and the European Union (EU) broker an 11th hour trade deal, the main benefits are likely to be felt by the more domestically focused FTSE 250 index.
That should leave some FTSE 100 constituents looking even better value, but investors need not get too carried away. Even if our domestic benchmark is somewhat deficient in terms of tech allocations, the main US indices have been held aloft by just a handful of companies which have derived benefit from the same set of circumstances that have wrought havoc on so many segments of the economy.
The civil aviation industry has been among the hardest hit by the Covid-19 lockdowns and travel restrictions. You will not find a better illustration of this than the recent travails of Rolls-Royce (RR.), an engineering group that is bound-up with the UK’s industrial prestige on the global stage.
By now, the narrative is all too familiar. Billions invested in a new generation of jet engines, only to discover that one of them — the Trent 1000 — was not up to muster. Remedial measures would cost in the region of £2.4bn, but then the group’s plans were thrown into disarray after the pandemic response resulted in a collapse of global engine flying hours. A £2bn rights issue duly followed, but it is by no means certain whether the shored-up balance sheet (including increased borrowing headroom) will prove sufficient to ward off the worst effects of the slump in civil aviation passenger numbers, which could take three to four years to recover to pre-pandemic levels, according to the International Air Transport Association.
A direct government capital injection cannot be ruled out, especially as Germany has effectively flouted EU state aid provisions through its recent support for Lufthansa (ETR: LHA). But given that the Derby-based group has lost four-fifths of its market value over the past 12 months, speculation over a possible merger deal is likely to be reignited.
The UK state has a ‘golden share’ in Rolls-Royce, thereby providing Whitehall with a veto over specific strategic decisions. The government would be loath to see the group fall into foreign hands, perhaps even from a national security perspective, but it might look upon any domestic approach more favourably – step forward BAE Systems (BA.). A merger proposal by the UK defence heavyweight would certainly make strategic sense given Rolls-Royce’s unique aerospace capabilities, while an enterprise value-to-sales (EV/sales) ratio of 0.2, set against a five-year average of 0.9, underlines significant indebtedness coupled with a faltering top line – arguably just the time to move in.
(Source: Investors Chronicle)
BATTLESPACE Comment: The BATTLESPACE view after discussions in the market place, will be that BAE Systems is likely to buy the naval nuclear busines of Roll-Royce and merge it into the Marine Division at the same time as possibly buying parts of, or all of Babcock. The rump of Roll-Royce could then be merged into Pratt *& Witney with undertakings to keep the business in the UK.
05 Oct 20. Comtech Telecommunications Corp. and Gilat Satellite Networks Ltd. Terminate Merger Agreement and Settle Litigation.
Comtech Telecommunications Corp. (Nasdaq: CMTL) (“Comtech”) and Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) (“Gilat”) announced today that the companies have agreed to terminate the merger agreement first announced on January 29, 2020 and have settled all pending litigation in the Delaware Court of Chancery. In connection with the termination and settlement agreement, Comtech has agreed to make a payment of $70.0m to Gilat.
The merger termination and the settlement agreement have been approved by each company’s board of directors and are effective immediately. The settlement calls for dismissal of the litigation, with prejudice. The trial of the litigation which was scheduled to begin today in Delaware Chancery Court was accordingly cancelled.
In a joint statement, Fred Kornberg, Comtech’s Chairman and Chief Executive Officer, and Dov Baharav, Chairman of the Board of Gilat, said “While we both believed from the outset that the merger of these two great companies was a perfect marriage, the COVID-19 pandemic made the timing of the combination particularly challenging. We concluded, that under current conditions, the settlement is the best path forward for both companies and their respective stakeholders.”
Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The company sells products to a diverse customer base in the global commercial and government communications markets.
Gilat Satellite Networks Ltd. (NASDAQ: GILT, TASE: GILT) is a leading global provider of satellite-based broadband communications. With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC).
Gilat’s comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband access, cellular backhaul, enterprise, in-flight connectivity, maritime, trains, defense and public safety, all while meeting the most stringent service level requirements. Gilat controlling shareholders are the FIMI Private Equity Funds. For more information, please visit: www.gilat.com (Source: BUSINESS WIRE)
06 Oct 20. AEVEX Aerospace buys two US firms to enhance ISR offerings. AEVEX Aerospace, a US-based provider of airborne intelligence, surveillance, and reconnaissance (ISR), has announced its acquisition of aircraft modification firm IKHANA Aircraft Services and navigation and sensing company Geodetics Inc.
US-based AEVEX Aerospace has acquired two American firms. (Getty Images)
AEVEX said on 5 October that the purchases will improve its ability to offer customers a “full spectrum” of airborne ISR capabilities.
Founded in 1999, Geodetics builds positioning, navigation, and timing (PNT) products for air, land, and sea applications. It also offers sensors, such as Light Detection and Ranging (LIDAR) mapping payloads that fly on small unmanned aircraft.
IKHANA modifies jets and turboprops and has “extensive experience” on various commercial and special-mission aircraft, AEVEX said. IKHANA was formed in 2007 through the merger of RW Martin Inc (RWMI) and Total Aircraft Services Inc (TAS).
AEVEX’s existing capabilities include maintaining, modifying, and operating manned and unmanned ISR aircraft, and collecting, fusing, and analysing intelligence data. It was created through the 2017-18 merger of three companies. (Source: Jane’s)
06 Oct 20. Boeing Forecasts Challenging Near-Term Aerospace Market with Resilience in Long Term.
– Near-term industry challenges impact demand for commercial airplanes and services
– Over 10 years, Boeing Market Outlook shows resilient $8.5trn total market
Boeing [NYSE: BA] today released its annual forecast for the commercial and defense aerospace market, reflecting the impact of the COVID-19 pandemic and Boeing’s view of near-, medium- and long-term market dynamics. The 2020 Boeing Market Outlook (BMO) projects that the commercial aviation and services markets will continue to face significant challenges due to the pandemic, while global defense and government services markets remain more stable.
“While this year has been unprecedented in terms of its disruption to our industry, we believe that aerospace and defense will overcome these near-term challenges, return to stability and emerge with strength,” said Boeing Chief Strategy Officer Marc Allen.
The BMO forecasts a total market value of $8.5trn over the next decade including demand for aerospace products and services. The forecast is down from $8.7trn a year ago due to the impact of the COVID-19 pandemic. Airlines globally have begun to recover from a greater than 90% decline in passenger traffic and revenue early this year, but a full recovery will take years, according to the outlook.
The 2020 Boeing Market Outlook includes projected demand for 18,350 commercial airplanes in the next decade – 11% lower than the comparable 2019 forecast – valued at about $2.9trn. In the longer term, with key industry drivers expected to remain stable, the commercial fleet is forecasted to return to its growth trend, generating demand for more than 43,000 new airplanes in the 20-year forecast time period.
The BMO also projects a $2.6trn market opportunity for defense and space during the next decade. This spending projection reflects the ongoing importance of military aircraft, autonomous systems, satellites, spacecraft and other products to national and international defense. This demand continues to be global in nature with 40 percent of expenditures expected to originate outside of the United States.
While near-term commercial services demand is lower, the BMO forecasts a $3trn market opportunity for commercial and government services through 2029, with digital solutions emerging as a critical enabler as customers focus on leaner operations to adjust to future market demand. Life cycle services and support will help customers scale their operations to meet efficiency and cost objectives aligned to market recovery trends.
As the impact of the pandemic continues, Boeing is taking action to reshape its business operations to adapt to the new market reality and become more resilient for the long term. This business transformation includes every element of Boeing’s enterprise, including infrastructure, overhead and organization, portfolio and investments, supply chain health and operational excellence.
Also released today, the 2020 Commercial Market Outlook (CMO), an annual 20-year forecast addressing the market for commercial airplanes and services, projects an increase in the share of deliveries replacing older passenger aircraft that are being retired in an accelerated replacement cycle, especially in the first decade.
“Commercial aviation is facing historic challenges this year, significantly affecting near- and medium-term demand for airplanes and services,” said Darren Hulst, vice president, Commercial Marketing. “Yet history has also proven air travel to be resilient time and again. The current disruption will inform airline fleet strategies long into the future, as airlines focus on building versatile fleets, networks and business model innovations that deliver the most capability and greatest efficiency at the lowest risk for sustainable growth.”
The commercial forecast includes:
- Over the next 20 years, passenger traffic growth is projected to increase by an average of 4% per year.
- The global commercial fleet is expected to reach 48,400 by 2039, up from 25,900 airplanes today. During this period, Asia will continue to expand its share of the world’s fleet, accounting for nearly 40% of the fleet compared to about 30% today.
- Single-aisle airplanes such as the 737 MAX will continue to be the largest market segment, with operators projected to need 32,270 new airplanes in the next 20 years. Single-aisle demand will recover sooner due to its key role in short-haul routes and domestic markets as well as passenger preference for point-to-point service.
- In the widebody market, Boeing forecasts demand for 7,480 new passenger airplanes by 2039. Widebody demand will be affected by a slower recovery in long-haul markets – typical after air-travel shocks – as well as uncertainties from COVID-19’s impact on international travel.
Air cargo demand, a relative bright spot in 2020, is expected to grow 4% annually and generate further demand for 930 new widebody production freighters and 1,500 converted freighters over the forecast period.
05 Oct 20. AEVEX Aerospace Announces Acquisitions of IKHANA Aircraft Services and Geodetics Incorporated.
AEVEX Continues to Enhance Its Suite of Full-Spectrum Airborne Intelligence, Surveillance, and Reconnaissance (ISR) Solutions.
AEVEX Aerospace announced today its acquisitions of IKHANA Aircraft Services and Geodetics Incorporated. IKHANA Aircraft Services, headquartered in Murrieta, California, is a full-service provider of aircraft engineering, modification, and maintenance solutions. Geodetics Incorporated, headquartered in San Diego, California, designs, develops, and manufactures commercial high-precision positioning and assured navigation products and solutions.
“We are thrilled to welcome both of these great companies into the AEVEX family,” said Brian Raduenz, AEVEX CEO. “Each brings unique, world-class capabilities that are consistent with our strategic vision to offer our customers the full spectrum of airborne ISR solutions—from systems engineering and technology integration to mission operations and data collection, analysis, and dissemination.”
IKHANA has a long history of engineering, modification, and certification of both jet and turboprop aircraft with extensive experience on a variety of commercial and special-mission aircraft. Geodetics builds a suite of low size, weight, and power (SWaP) products for high-precision, assured positioning, navigation, and timing (PNT) that are readily adaptable to any system requiring high-fidelity solutions. Additionally, Geodetics produces application-specific LiDAR mapping and photogrammetry solutions.
“When we looked at how to take IKHANA to the next level of growth, AEVEX was the obvious choice,” said John Zublin, President and CEO of IKHANA. “The capability and cultural fit are compelling, and our combined expertise will offer unmatched agility and tailored support to a wide range of customers.”
“The demand for our solutions is growing dramatically, and a combination with AEVEX is the logical next step for us,” said Dr. Lydia Bock, President and CEO of Geodetics. “AEVEX shares our passion for quality and performance and provides unique insights and access for the continued evolution of our solutions to meet the needs of both civilian and national security customers.”
Procopio, Cory, Hargreaves & Savitch LLP served as legal counsel to IKHANA. Kirkland & Ellis LLP and Crowell & Moring LLP served as legal counsel to AEVEX in support of its acquisition of IKHANA.
KAL Capital Markets served as financial advisor and Boyle Law served as legal counsel to Geodetics. Alston & Bird LLP and Crowell & Moring LLP served as legal counsel to AEVEX in support of its acquisition of Geodetics.
About AEVEX Aerospace
AEVEX Aerospace, headquartered in Solana Beach, California, supports the U.S. national security mission around the world by providing full-spectrum airborne intelligence, surveillance and reconnaissance solutions. The company’s capabilities include custom design and engineering, sensor integration and sustainment, aircraft modification and certification, mission operations services, advanced intelligence data processing, exploitation, and dissemination solutions, and tailored hardware and software mission-system tools. With over 600 professionals, AEVEX uses agile and customized approaches to rapidly define, develop and deliver specialized solutions for airborne intelligence requirements to DoD, other government agencies, and commercial businesses. AEVEX has major offices in California, Massachusetts, North Carolina, Ohio, and Virginia.
About IKHANA Aircraft Services
IKHANA Aircraft Services is a leading provider of DESIGN-BUILD-FLY solutions for jet and turboprop aircraft and specializes in the complete design, manufacture, installation, and certification of complex modifications and major repairs. Headquartered in Murrieta, California, IKHANA holds FAA, EASA and TCCA Aircraft Maintenance Organization (AMO) authority as well as FAA Parts Manufacturer Approval (FAA PMA). Working with both the FAA Aircraft Certification and Military Aircraft Certification Offices, IKHANA has designed, installed, and certified numerous aircraft modifications and repairs for both Part 23 and Part 25 aircraft, including Gulfstreams, King Airs and Twin Otters. IKHANA holds over two dozen significant Supplemental Type Certificates (STCs).
About Geodetics Incorporated
Geodetics Incorporated is a leading provider of positioning, navigation, and timing (PNT) and sensor fusion technology solutions. Headquartered in San Diego, California, Geodetics has a deep engineering team with decades of experience in solutions design, engineering, prototyping, customization, and production backed by an extensive IP portfolio. Geodetics’ expertise in sensor fusion, inertial/relative navigation, interferometry, mobile mapping, LiDAR electrical/mechanical engineering, artificial intelligence, and fuzzy logic produces high quality, innovative solutions for both commercial and military applications. (Source: BUSINESS WIRE)
05 Oct 20. Copley Equity Partners Announces Investment into Aethon Aerial Solutions & Flight Evolved. Copley Equity Partners today announced that it has completed an investment to recapitalize, and facilitate the merger of, Aethon Aerial Solutions and Flight Evolved. The combination of Aethon and Flight Evolved creates one of the most technologically advanced aerial inspection companies dedicated to asset management for utilities in North America. As leading providers of these services to multiple U.S. and international utilities, the two companies have collectively inspected over 200,000 utility structures year-to-date in 2020.
Peter Trovato, Managing Director at Copley Equity, stated, “Our investment in Aethon and Flight Evolved comes after a multi-year review of this sector by our firm. During that period, we identified Aethon and Flight Evolved as market-leading companies and we’re excited to start our partnership.” Trovato added, “Utility companies, and other energy infrastructure stakeholders, have an increased focus on safety and regulatory compliance. Aethon and Flight Evolved provide the most effective, and efficient, solutions to these customers via airborne remote sensing and drone technology. We are thrilled to support the Aethon and Flight Evolved teams and help build a significant platform for global growth.”
By combining Aethon Aerial Solutions’ progressive approach to helicopter-based aerial inspections and mapping with Flight Evolved’s innovative UAV solutions and software development, the combined company will now address the full spectrum of a utility company’s needs for asset inspection and management. Combining advanced imaging and LiDAR technology, spatial data and machine learning, the companies generate critical business intelligence from remotely sensed 3D data. This combination of data and software analytics ensures the reliable delivery of power, improved maintenance of crucial infrastructure, and reduces the risk of wildfires and related outages.
“The financing provided by Copley Equity Partners has allowed Aethon Aerial Solutions and Flight Evolved to create a technologically advanced business platform that will extend the reach of our combined offerings to a growing base of U.S. and international clients,” said Alastair Jenkins, CEO, Aethon Aerial Solutions. “The investment of growth capital will allow us to effectively integrate new technology and select services from like-minded businesses into our proprietary cloud-based business solutions.”
“To mitigate fire risk and ensure regulatory compliance, utility companies worldwide are leveraging aerial inspection systems, both UAVs and helicopters, to monitor and inspect their geographically dispersed assets,” said Jordan Rising, CTO, Flight Evolved. “Our combined solutions enable our clients to achieve significant productivity improvements safely and efficiently.”
ABOUT COPLEY EQUITY PARTNERS
Established in 2012, Copley is a private investment firm with offices in Boston and Denver. Copley focuses on partnering with growing, lower-middle market private companies. The firm invests out of an evergreen, single family office capital base and is comfortable in both majority and minority ownership positions. The firm makes investments across a broad range of sectors to help businesses fuel growth, manage risk, and create enduring value.
ABOUT AETHON AERIAL SOLUTIONS INC
Established in 2016 by a group of industry veterans, each with over 20 years of expertise in aerial remote sensing and data analysis, Aethon Aerial Solutions has achieved rapid growth in the aerial inspection, data analytics, and UAV industries. Using proprietary technology and a unique and scalable business model based on cloud-based processing and artificial intelligence, they have provided services to utilities in California, Australia, and Canada to reduce fire risks, improve infrastructure performance, and increase safety, while reducing maintenance costs. (Source: BUSINESS WIRE)
05 Oct 20. KBR Completes Centauri Acquisition, Strengthening Military Space and Intelligence Capabilities. KBR, Inc. (NYSE: KBR) (“KBR”) announced today it has completed the acquisition of Centauri, LLC (“Centauri”), a leading independent provider of space, directed energy, and other advanced technology solutions to the United States intelligence community and Department of Defense, from Arlington Capital Partners.
This significant acquisition expands KBR’s military space and intelligence business and builds upon the company’s existing cybersecurity and missile defense solutions. Furthermore, the addition of Centauri advances KBR’s strategic transformation of becoming a leading provider of high-end, mission-critical technical services and solutions. Centauri has a long history of serving some of the U.S. government’s most important, challenging, and complex missions advancing national security priorities and KBR seeks to expand these customer relationships to diversify the company’s offerings in mission support services for defense and intelligence customers.
“We are excited to welcome Centauri into the One KBR family as their people-focused, mission-oriented ideals align well with our own company culture,” said Stuart Bradie, KBR President and CEO. “Centauri adds an enormous benefit to KBR, as a result of its highly technical, differentiated portfolio, creating opportunities for substantial growth and putting KBR at the forefront of the government solutions sector.”
For more than 60 years, KBR has been a key provider of mission-critical solutions for customers throughout the missile defense, space and intelligence domains, including the U.S. Army, Navy, Air Force, Department of Defense and NASA.
01 Oct 20. Starburst Announces Operations Expansion, Launching in India. The expansion lends support to the emerging interest in aviation, space, and defense innovation and fosters connections within the Indian ecosystem.
Starburst, the world’s first and only global aerospace and defense accelerator, today announced its expansion into India to engage directly with vibrant local aerospace and defense startups and facilitate communication between aerospace and defense corporates and innovative startups within domestic and global landscapes.
As part of the expansion, Starburst is deploying a local consulting team and venture development platform that will strengthen the capabilities of domestic players in aerospace and defense, and provide access to a global network of participants who are leaders in the industry. The expansion will also allow collaboration with frontier tech and heavy engineering companies, while providing specialty services to the startup community in India.
The platform will be operated out of Mumbai as an aerospace and defense services and corporate innovation center to serve Indian and international client partners. Starburst is strategically setting up in the financial capital of India, while maintaining other strategic presence via operating resources and partners in the aerospace and defense ecosystems of Delhi, Bangalore and Hyderabad.
“With peaked interest in aerospace, aviation, and defense in India, Starburst becomes a powerful tool in connecting industries with emerging startups,” said Francois Chopard, CEO of Starburst. “We’re thrilled to announce our expansion into India to solidify a community that connects local startups while partnering with global entities.”
The expansion is led by Abhinav Anuket, managing partner and CEO of Starburst India. Anuket, who previously founded Magnivia Ventures, a US based, strategic investment and venture development firm, co-founded the India program along with Francois Chopard, Founder and CEO of Starburst Aerospace. Other co-founders of Starburst Aerospace include Van Espahbodi, Partner and Co-founder (U.S.), and Sandra Budimir, Partner and Co-founder (Europe). Starburst is also in the process of launching an early-stage accelerator program in India, which will connect Indian participants to Starburst’s network of global partners in government and private sectors. Starburst India is currently inviting corporate partners, aerospace and defense investors, government agencies, academic organizations, and startups to participate. (Source: PR Newswire)
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.