Sponsored by TCI International Inc.
11 Mar 21. ‘As long as it lasts’: Rolls-Royce says can weather crisis despite record loss. Rolls-Royce has enough funding to weather the crisis in the aviation industry caused by the pandemic, its chief executive said on Thursday, after the engine maker plunged to a record £4bn ($5.6bn) underlying loss for 2020. The British company said its cash burn should halve this year, and turn positive in the second half as vaccinations kick in and travellers return to the skies.
“The worst is now well behind us,” CEO Warren East said.
But even if that proves optimistic, Rolls is well placed to cope with more turmoil after a drive to cut costs and raise funds, he added.
“We have our cash burn under control … We have ample liquidity to get through this crisis as long as it lasts,” East told reporters.
Rolls’ model of charging airlines for the number of hours its engines fly meant much of its income dried up last year when travel stopped, forcing it to ask shareholders for cash and take on £5.3bn of new debt.
Its civil aerospace arm, whose engines power Airbus A350 and Boeing 787 jets, accounts for just over half of group revenue in a normal year.
Last year’s cash burn of £4.2bn was in line with analysts’ expectations, and Rolls guided that would reduce this year to £2bn.
The company axed 15% of staff in 2020, and earmarked £2bn of assets for sale to repair its balance sheet.
Rolls, founded in 1906 and one of the last vestiges of Britain’s once mighty manufacturing industry, posted an underlying pretax loss of £4bn for 2020, worse than analyst expectations for a £3.1bn loss and its biggest ever on an underlying basis.
Rolls shares were up 2.6% to 116 pence at 1050 GMT. They have lost 41% since the start of the pandemic around a year ago, but have gained 22% in the last month on travel recovery hopes.
Jefferies analyst Sandy Morris said Rolls had “much to do”, but the “fix” was feasible. “The possibility of reaching modest net debt by end 2023 is alive,” he said.
Rolls’ cash flow improvement this year depends on airlines flying 55% of 2019 levels during 2021. Its assumption is for more travel later this year as vaccine programmes progress.
The sale of Rolls’ Spain-based ITP unit, expected to be its biggest disposal, is progressing well and there are ongoing conversations with a number of potential buyers, it said.
“We’re open to approaches from any party with a credible offering at the moment. That includes being open, by the way, to discussions with potential Spanish investors or partners,” East said.
Industry sources say the sale has sparked tensions with Germany’s MTU Aero Engines, a partner of U.S. engine maker Pratt & Whitney. MTU said last month it not been invited to bid. Rolls declined to comment.
FILE PHOTO: People look at Rolls Royce’s Trent Engine displayed at the Singapore Airshow in Singapore February 11, 2020. REUTERS/Edgar Su/File Photo
Part of Rolls’ asset sale plan ran into problems this week when Norway suspended the €150m sale of Rolls’ Norwegian unit, Bergen Engines, on security grounds. ($1 = 0.7174 pounds) (Source: Reuters)
BATTLESPACE Comment: Sources close to BATTLESPACE suggest that BAE Systems is poised to take over Rolls-Royce’s marine nuclear business supplying reactors for Trident and Astute submarines. The next move may well be to take over Babcock’s submarine support business, including Faslane, which would give one UK submarine centre of excellence.
11 Mar 21. Babcock International: Conditional sale of Oil and Gas aviation business. Babcock, the aerospace and defence company, has entered into a conditional agreement for the sale of its Oil and Gas aviation business to CHC Group, LLC (CHC).
The Oil and Gas business, which is part of the Group’s Aviation sector, provides offshore oil and gas crew transportation services in the UK, Denmark and Australia. It is headquartered in Aberdeen, UK, and employs over 500 people and operates around 30 aircraft across its three locations.
The deal is expected to complete in the second calendar quarter of 2021, subject to the satisfaction of the relevant third party conditions. It is intended that CHC will seek clearance for the transaction from antitrust authorities in the UK and Australia, but completion is not conditional upon such clearances being received. Further information will be provided upon completion of the deal. (Source: Google/https://www.marketscreener.com/)
11 Mar 21. Rolls-Royce plunges to a loss as pandemic pressure continue. Amid the havoc wreaked by Covid-19 on international air travel, it will come as little surprise that 2020 was a dire year for Rolls-Royce (RR.). Indeed, the aircraft engine maker plunged to a £4bn underlying pre-tax loss last year, versus a £583m profit in 2019. Rolls’ large engine flying hours (EFH) collapsed by almost 60 per cent in 2020. The group estimates that EFH will only recover to 55 per cent of pre-pandemic levels this year, rising to 80 per cent in 2022. The deterioration in EFH, as well as the cessation of invoice discounting, led to a £4.2bn free cash outflow, and Rolls is guiding to a £2bn outflow this year as well. Excluding lease liabilities, the group is sitting on £1.5bn of net debt which includes £2bn of proceeds from a heavily discounted rights issue.
Net debt is expected to hit £4bn this year, although Rolls is aiming to shore up its balance sheet with more than £2bn of asset disposals.
It has been a traumatic ride for Rolls’ shareholders since the beginning of 2020 as the shares have more than halved in value. With investors braced for bad news the shares were little changed in early trading, languishing at 114p. (Source: Investors Chronicle)
10 Mar 21. QOMPLX to Acquire Sentar, Inc., One of the Fastest Growing Cyber Companies in the National Security Sector. Transformative acquisition accelerates QOMPLX’s growth via expansion to the Government & National Security segments. QOMPLX™, the leader in cloud-native risk analytics, has entered into a definitive agreement to acquire Sentar, Inc. (“Sentar”). Sentar is a cyber-intelligence company, applying analytics, operations and systems engineering expertise to protect our national security by innovating, building, and securing mission-critical assets. Sentar will continue to be headed by Sentar President Darren Kraabel alongside other key management. Bridget McCaleb will continue in a formal capacity leading integration efforts for Sentar during the transition.
Sentar is one of the fastest-growing cyber intelligence, analytics and operations solutions providers focused on the National Security sector. Its cyber domain solutions blend expertise in cybersecurity, intelligence, analytics, and systems engineering into holistic solutions that combine these disciplines to deliver superior results. Key clients include the Defense Health Agency, the U.S. Army, the U.S. Navy, and Missile Defense Agency. Sentar and QOMPLX have already begun to partner around industrial control systems security and continuous monitoring using shared expertise and QOMPLX software and analytics. The acquisition of Sentar’s services business provides expert personnel and its decades-long technical and national security sector experience. The pending combination is an exciting prospect for QOMPLX to enhance its cybersecurity intelligence, operations and service delivery across the government. Opportunities for the combined team include the delivery of QOMPLX’s industry leading Active Directory security and authentication attack detection and advanced security data fusion use cases. The aftermath of incidents like Sunburst/SolarWinds and the Microsoft Exchange debacle continue to drive both demand and considerable urgency for the combined capabilities and expertise of the combined company. The combination of both domain expert services and support and necessity of advanced technology to identify and authentication security gaps in government in particular has never been more clear.
“We are excited to welcome Darren and the highly experienced Sentar team to QOMPLX and look forward to supporting these mission critical customers,” said Jason Crabtree, Co-Founder, and CEO of QOMPLX. “QOMPLX is gaining a tremendous group of dedicated professionals who have built an impressive and expanding portfolio of government and defense contracts. We are excited that this team of experts, who will be further enabled by QOMPLX technology, will continue forward as a key platform for future growth and delivery of critical capabilities across the government. Sentar is the perfect catalyst and partner for QOMPLX to scale a unique combined offering bridging technology and domain expertise across the national security and broader government sector in this critical time. Very tactically, we are excited about the future opportunities to advance our robust capabilities in Active Directory and authentication security, industrial control systems and operational technology, and healthcare-related security offerings. We are heartened by the opportunities for long-term strategic partnership between QOMPLX, the joining Sentar team, and the important clients who are so well served by the Sentar team.”
Sentar has achieved significant growth over the past five years by integrating expert services with investments in technology and approaches that offer clients in the national security sector differentiated value. The acquisition of Sentar will extend the broader QOMPLX team’s emergence as a global leader in risk: “I am excited to take on this new role and pursue a new challenge combining QOMPLX’s robust cybersecurity offerings with Sentar’s established presence in the Defense sector,” said Darren Kraabel, President of Sentar. “Our organization celebrated its 30th anniversary in February 2020, and reaching this milestone helped us put in perspective our impressive growth journey. It is hence opportune at this time that we embark on an exciting new journey by joining forces with QOMPLX to transform 30 years of hard work into a new competitive platform.”
The acquisition remains subject to certain closing conditions and is being made as part of QOMPLX’s proposed business combination with Tailwind Acquisition Corp., (NYSE: TWND), a special purpose acquisition company. QOMPLX’s and Tailwind Acquisition Corp.’s boards of directors have unanimously approved the proposed business combination. Completion of the proposed business combination is expected in mid-2021, subject to approval by Tailwind’s stockholders and the satisfaction or waiver of other customary closing conditions identified in the business combination agreement entered into by QOMPLX and Tailwind Acquisition Corp.
QOMPLX is the leader in cloud-native risk analytics. We help organizations make intelligent business decisions and better manage risk through our advanced, proprietary risk cloud platform. We are the leaders at rapidly ingesting, transforming, and contextualizing large, complex, and disparate data sources through our data factory, in order to help organizations better quantify, model, and predict risk in areas including cybersecurity, insurance, and finance. Backed by Bill Foley’s Cannae Holdings, QOMPLX is co-founded by CEO Jason Crabtree, a former Special Advisor to the Commanding General of the U.S. Army Cyber Command and the Department of Defense, West Point graduate, Rhodes Scholar, and veteran of the War in Afghanistan, and by CTO Andrew Sellers, a U.S. Air Force Academy valedictorian, Truman Scholar, and Iraq War veteran. QOMPLX has entered into a definitive business combination agreement with Tailwind Acquisition Corp. and will be traded on NYSE under the ticker QPLX upon closing of the proposed business combination. For more information, visit qomplx.com and follow us on Twitter.
About Sentar, Inc.
Sentar is a cyber-intelligence company, applying analytics and systems engineering expertise to protect our national security and way of life by innovating, building, and securing mission-critical assets. Established in 1990, we have a long history of innovation. Today, we are one of the fastest-growing cyber-intelligence companies serving the National Security sector. Sentar has offices in Huntsville, Alabama; Charleston, South Carolina; Columbia, Maryland; and San Antonio, Texas. Visit www.sentar.com for more information. (Source: BUSINESS WIRE)
10 Mar 21. Magellan Aerospace Corporation Announces Financial Results and Director Resignation. Magellan Aerospace Corporation (“Magellan” or the “Corporation”) released its financial results for the fourth quarter of 2020. All amounts are expressed in Canadian dollars unless otherwise indicated. The results are summarized as follows:
A summary of Magellan’s business and significant updates
Magellan is a diversified supplier of components to the aerospace industry. Through its wholly owned subsidiaries and controlled entity, Magellan engineers, and manufactures aeroengine and aerostructure components for aerospace markets, advanced products for defence and space markets, and complementary specialty products. The Corporation also supports the aftermarket through the supply of spare parts as well as performing repair and overhaul services.
Magellan operates substantially all of its activities in one reportable segment, Aerospace, which is viewed as one segment by the chief operating decision-makers for the purpose of resource allocations, assessing performance and strategic planning. The Aerospace segment includes the design, development, manufacture, repair and overhaul, and sale of systems and components for defence and civil aviation.
On December 10, 2020, Magellan announced the delivery of the 200th set of F-35 Lightning II horizontal stabilizer assemblies under an agreement with BAE Systems. Magellan and BAE Systems have been working together to produce horizontal stabilizers for the global F-35 program since 2009. Both companies have since made significant investment in facilities, technologies and training to ensure the successful delivery of these flight-critical assemblies to the F-35 prime contractor Lockheed Martin. The horizontal stabilizers produced at Magellan are major assemblies on the Conventional Takeoff and Landing (CTOL) variant of the F-35. Magellan is targeting to produce more than 1,000 ship sets of horizontal tail assemblies over the life of the F-35 program along with various other metallic and composite components.
On January 14, 2021, the Corporation announced that Raytheon Missiles & Defense (“Raytheon”) awarded the Corporation a contract for the supply of complex missile fin components. These heat-tolerant surface control assemblies will be manufactured at Magellan’s facility in Middletown, Ohio, with deliveries starting in 2021 and continuing through 2024. The value of this agreement is approximately $61.4m. Magellan has participated in the Standard Missile (“SM”) program for more than 20 years, supplying dorsal fins for various configurations, including the SM-3 and SM-6. These defensive missiles provide area defence to the U.S. Military against theater ballistic missiles, aircraft and cruise missiles.
On February 8, 2021, Magellan announced the signing of a Memorandum of Understanding (“MOU”) with General Electric Aviation Canada (“GE Canada”) for the purpose of exploring an arrangement whereby GE Canada would support Magellan in establishing and delivering a Canadian-based sustainment solution for the GE F414-GE-400 engine, which powers Boeing’s F/A-18 Block III Super Hornet fighter jet. This initiative is in support of Boeing’s proposal to provide the Block III Super Hornet as a solution for Canada’s Future Fighter Capability Project (“FFCP”). Under the MOU, with the selection of the Super Hornet for the FFCP, GE Canada and Magellan would develop an appropriate and competitive sustainment solution for Canada which would provide all aircraft engine sustainment services for the Royal Canadian Air Force on their F414 engine fleet. The in-country depot level sustainment support for the engines includes onsite maintenance, repair and overhaul support services, technical services, and engineering support and would be performed in Magellan’s facility in Mississauga, Ontario for the life of the program.
On March 5, 2021, the Honourable William G. Davis, P.C., C.C., Q.C., former premier of Ontario, resigned as a member of the Board of Directors of the Corporation due to personal reasons. Mr. Davis served as a member of the Board since 1989 and has made tremendous contribution to Magellan over the years. His vast experience in regulatory and governmental affairs and in community and industry relations was a great asset to the Board.
Impact of COVID-19
In March 2020, due to the worsening public health crisis associated with the novel coronavirus (“COVID-19”), the World Health Organization (“WHO”) declared COVID-19 a global pandemic. Governments worldwide, including those countries in which Magellan operates, enacted emergency measures to combat the spread of the virus. These measures, which included the implementation of travel bans, self-imposed quarantine periods and social distancing, caused a material disruption to businesses globally resulting in an economic slowdown and decreased demand in the aerospace industry. Governments and central banks reacted with significant monetary and fiscal interventions designed to stabilize economic conditions; however, the long-term success of these interventions is not yet determinable.
In the fourth quarter of 2020, the continued disruption to air travel and commercial activities, particularly within the aerospace and commercial airline industries negatively impacted global supply, demand and distribution capabilities. In particular, the significant decrease in air travel resulting from the COVID-19 pandemic is adversely affecting Magellan’s customers and their demand for the Corporation’s products and services. The situation remains dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Corporation remains unknown at this time.
The current challenging economic climate may have material adverse impact on Magellan including, but not limited to significant declines in revenue in addition to what Magellan experienced in 2020 as the Corporation’s customers are concentrated in the aerospace industry; impairment charges to the Corporation’s property, plant and equipment, intangible assets and goodwill due to declines in revenue and cash flows; and restructuring charges as Magellan aligns its structure and personnel to the dynamic environment. Estimates and judgements made in the preparation of financial statements are increasingly difficult and subject to a higher degree of measurement uncertainty during this volatile period.
Magellan has implemented measures to align its cost structure and maximize cash preservation during the current market conditions, including headcount reductions and re-balancing work force; elimination of all non-essential travel, entertaining and other discretionary spending; and reductions to the 2020 capital expenditure plan. The Corporation also applied and received the Canada Emergency Wage Subsidy (“CEWS”) for its Canadian employees. The carrying value of the Corporation’s long-lived assets are reviewed for indications of impairment at the end of each reporting period. For long-lived assets that have an indefinite life such as goodwill, the Corporation performs an annual impairment test. For the year ended December 31, 2020, the Corporation recorded an impairment charge of $12.0m.
2021 will be challenging for Magellan’s revenue on a year over year basis as COVID-19 continues to impact aircraft production rates over the short and medium term and flying hours of aircraft. In response to this impact, Magellan implemented cost savings initiatives in 2020 designed to reduce operating costs. In the fourth quarter of 2020, a restructuring plan was announced as part of the Corporation’s strategy to reorganize its European operations resulting in the closure of its Bournemouth manufacturing facilities in the United Kingdom, which will result in the Corporation incurring a restructuring charge relating to the closure of approximately $8.0m of which $5.6m was recorded in 2020. Magellan will continue to operate its treatments center in Bournemouth. Magellan continues to actively monitor the COVID-19 situation and reassesses its operating plan as program updates become available.
During this pandemic, the aerospace manufacturing industry, in the jurisdictions the Corporation operates in, has been classified as an “essential service”. As a result, the Corporation’s operations remained open, but at reduced levels of activity during 2020.
To manage the additional safety risks presented by COVID-19, Magellan implemented standardized tools and templates to keep its employees safe and well informed. Magellan has implemented additional safety, sanitization and physical distancing procedures, including remote work sites where possible and ceased all non-essential business travel. Magellan’s procedures are designed to align with recommendations from the WHO, the United States’ Centers for Disease Control and Prevention, and applicable federal, state and provincial government health authorities.
During 2020, Magellan improved its overall liquidity position despite the challenges posed by COVID-19. The Corporation ended the year with a cash balance of $113.9m and $70.5m of available borrowing capacity under Magellan’s operating credit facility, providing the Corporation with $184.4m of total liquidity as compared with $138.9m at December 31, 2019. The credit facility agreement also includes a $75m uncommitted accordion provision that provides the Corporation with the option to increase the size of the operating credit facility to $150m. Magellan expects that cash provided by operations, cash on hand and its sources of financing will be sufficient to meet the Corporation’s debt obligations and fund committed and future capital expenditures.
For additional information, please refer to the “Management’s Discussion and Analysis” section of the Corporation’s 2020 Annual Report available on www.sedar.com.
- Results of Operations
A discussion of Magellan’s operating results for fourth quarter ended December 31, 2020
Consolidated revenue in the fourth quarter of 2020 was $180.1m, a $66.6m decrease from the fourth quarter of 2019 of $246.7m. The Corporation reported gross profit and net loss of $11.6m and $22.9m for the fourth quarter of 2020 in comparison to gross profit of $34.0m and net income of $9.4m for the fourth quarter of 2019.
In the fourth quarter of 2020, the COVID-19 pandemic caused disruption to air travel and commercial activities, particularly within the aerospace and commercial airline industries, have negatively impacted global supply, demand and distribution capabilities. As a result there was a decrease to the demand for the Corporation’s aerospace products and services that led to lower revenues. Revenues in Canada decreased 9.3% in the fourth quarter of 2020 in comparison to the same period in 2019 primarily due to decreased volumes in proprietary and casting products, partially offset by higher volumes in a number of defence programs.
Revenues in United States decreased by 41.1% in the fourth quarter of 2020 when compared to the fourth quarter of 2019, largely due to volume decreases for both single aisle, specifically the Boeing 737 MAX, and wide-body aircraft.
European revenues decreased 34.3% in the third quarter of 2020 compared to the corresponding period in 2019 primarily driven by build rate reductions for both single aisle and wide-body aircraft.
Gross profit of $11.6m for the fourth quarter of 2020 was $22.3m lower than the fourth quarter of 2019 gross profit of $34.0m, and gross profit as a percentage of revenues of 6.5% for the fourth quarter of 2020 was lower than the fourth quarter of 2019 of 13.8%. The lower gross profit in the current quarter when compared to the same quarter in 2019 was primarily driven by decreased volumes in a number of commercial programs, offset in part by cost reductions and recognition of $1.0m in subsidies from the CEWS program.
Administrative and General Expenses
fourth quarter of 2020 were 0.6% higher than the same period of 2019. Administrative and general expenses decreased $3.2m to $12.4m in the fourth quarter of 2020 compared to $15.5m in the fourth quarter of 2019 mainly due to lower discretionary expenses, lower salary and related expenses and cost reductions across the majority of the expense categories to align with current business volumes.
During the fourth quarter of 2020, Magellan announced a restructuring plan that will reorganize its European operations resulting in the closure of its Bournemouth manufacturing facilities in the United Kingdom. As a result, a total of $5.6m was expensed during the fourth quarter of 2020.
COVID-19 resulted in reduced production rates implemented by commercial aircraft manufacturers and reduced flying hours by operators. Due to the projected slow recovery of the aerospace market and the resulting depressed customer demand for products and services provided by one of our CGUs, the Corporation recorded a goodwill impairment charge of $12.0m.
For the fourth quarter of 2020, the Corporation recorded a $3.4m foreign exchange loss compared to a $5.1m foreign exchange loss in the same period of 2019, mainly driven by the movements in balances denominated in foreign currencies and the fluctuations of the foreign exchange rates.
(Source: Google/BUSINESS WIRE)
10 Mar 21. L3Harris divestitures set up new CEO with cash cushion. L3Harris Technologies Inc plans to return billions in cash from recent divestitures to shareholders while allowing a new chief executive to invest in research and development as the U.S. defense contractor aims for more Pentagon space sensor contracts, company officials said on Wednesday.
The company is the market leader in tactical radios for the U.S. military and sees more international business on the horizon, current CEO Bill Brown said in a joint interview with President and Chief Operating Officer Chris Kubasik, who takes over the reigns on July 1.
Following the 2019 merger of L3 Technologies and Harris Corporation, L3Harris sold several units, such as its pilot training business for $1bn, in an attempt to align itself with future U.S. defense spending priorities like cybersecurity and sensors.
“With our free cash flow generation and nearly $2bn in additional divestiture proceeds, we expect, between 2021 and 2022, returning over $7.5bn to shareholders,” Kubasik told investors the company’s first post-merger presentation to investors on Wednesday.
It expects to keep research and development funding at 4% of revenues, Kubasik said in the interview following the call adding, “we’re not short changing the business.”
Kubasik, a former Lockheed Martin executive, told Reuters that he has done more than 25 acquisitions in his career.
The company expects U.S. growth from prospects in its space, tactical radio, mission avionics, maritime and classified businesses.
Last year, the Space Development Agency awarded separate contracts to L3Harris and SpaceX to build the first tranche of a new missile tracking satellites used for missile defense. (Source: Reuters)
09 Mar 21. Fralock Holdings Acquires Oasis Materials. Third strategic acquisition in 12 months expands Fralock Holdings’ solutions across critical industries. Fralock Holdings, LLC, (an Arsenal Capital Portfolio Company), a leading developer and manufacturer of engineered advanced materials solutions for critical applications, today announced the acquisition of Oasis Materials, a global leader in rapid temperature transition applications used in semiconductor, medical, aerospace, defense and other applications.
Oasis Materials’ technical ceramic solutions are considered some of the most highly engineered active and passive solutions available on the market today, built around their leading capabilities in multi-layer metallization and a broad range of ceramic manufacturing capabilities. This acquisition will enable Fralock Holdings to incorporate Oasis Materials’ technology into its existing suite of products to offer a wider variety of solutions for customers seeking cost-competitive ways to augment precision thermal management in critical applications.
Oasis Materials is one of several recent acquisitions by Fralock Holdings aimed at increasing the company’s capabilities and technical offerings serving high reliability markets, and it fills an important role in the company’s long-term growth strategy.
“The acquisition of Oasis Materials enables us to offer more alternatives, especially in active thermal applications that can significantly improve our customer’s products and their bottom line,” said Marc Haugen, CEO, Fralock Holdings. “This investment moves us closer to realizing our vision to become one of the world’s leading providers of engineered advanced materials solutions for critical applications.”
Fralock Holdings’ applications are used in a variety of ways that impact our lives, from the equipment used to manufacture silicon wafers, to medical treatment, imaging and patient monitoring, and defense applications, satellite and spacecraft components. All of these end markets can benefit from the technology developed by Oasis Materials.
“Marc Haugen and his technical and management team have built an incredible organization that has the vision and the expertise to build upon what we’ve created,” said Frank Polese, President, Oasis Materials. “We are thrilled to become a part of the Fralock Holdings organization, and look forward to supporting their continued growth and expansion.”
The acquisition adds nearly 100 new team members with notably strong engineering depth, and builds upon Fralock Holdings’ deep technical expertise and bench strength. The organization’s total staff will increase to approximately 500 employees.
About Fralock Holdings, LLC
Established in 1967, Fralock Holdings (an Arsenal Capital Portfolio Company), is a design, engineering and manufacturing company that develops high-performance solutions for Fortune 500 corporations in aerospace, defense, medical, life science, semiconductor technology and other high reliability markets. Its family of companies include Fralock, Career Technologies USA, Mapson Engineering and Oasis Materials.
Headquartered in Valencia, California, Fralock employs 500 associates in offices throughout California. (Source: PR Newswire)
09 Mar 21. Leonardo Results at 31 December 2020. FY 2020 results confirm robust and resilient business performance, Orders at € 13.8bn. Successful execution with positive FOCF at €40m. Continued confidence in medium-long term core business fundamentals.
Successfully steered and navigated the Group through 2020, in an extraordinary scenario effectively addressed
- •Continued strong order intake of € 13.8bn
- •Resilient revenue performance at € 13.4bn
- •EBITA at €938m, with solid performance in main businesses and cost savings offsetting civil market pressures
- •2020 Integrated Report: ESG embedded across our business and ecosystems
Solid 2021 Guidance
- •Assuming progressive improvement in the global health situation through the year with consequent normalization of operating and market conditions as restrictions are eased
- •Continued strong commercial momentum, new orders at ca. €14bn
- •Continued top line resilience, revenues at €13.8-14.3bn
- •Improving EBITA at € 1,075-1,125m
- •FOCF will continue to benefit from military/governmental and continued pressures on civil side
- •Military/governmental showing robustness and resilience
- •Solid backlog and order intake confirm confidence we have the right products and service for the future
- •New opportunities post Covid-19 leveraging transversal capabilities
Leonardo’s Board of Directors, convened today under the Chairmanship of Luciano Carta, examined and unanimously approved the draft of Group consolidated and Leonardo S.p.A. financial statements at 31 December 2020.
Alessandro Profumo, Leonardo CEO, stated “We have addressed the 2020 challenging environment achieving strong performance with orders at €13.8bn, revenues at €13.4bn, EBITA at €938m and FOCF positive for €40m. Our resilient military and governmental business is in good shape enabling us to deliver results despite Covid impact on civil business. Our strong foundations and core fundamentals give us firm confidence in both the short-term and medium-long term. We are catching new opportunities post Covid leveraging existing transversal capabilities and we are fully focused to create value sustainably for all our stakeholders”.
09 Mar 21. Italy’s Leonardo expects core profit rise despite aviation struggle. Italy’s Leonardo said on Tuesday that its core earnings would improve in 2021 after earnings before interest, tax and amortization (EBITA) fell 25% last year as the COVID-19 pandemic wrecked its civil aviation sales.
Leonardo, which is planning to list a minority stake in its DRS unit this month, said its EBITA was expected to rise to between 1.075-1.125bn euro ($1.28-1.34bn), up from 938m euros in 2020.
Revenue will rise to 13.8-14.3bn euros, from 13.4bn euros last year, thanks to new orders and the delivery of activities on military and government programmes, including a 2016 contract with Kuwait for 28 Eurofighters.
Lower orders from Boeing and Airbus for the Aerostructures division, which produces parts of civil airplanes, and the drop in contracts for turbo-prop aircraft by ATR will still weigh on the businesses this year.
“Our civil business is expected to still be heavily affected by the effects of the pandemic, with a further contraction of production volumes in Aerostructures and ATR expected deliveries still far below the pre-pandemic levels,” Leonardo said.
To address the challenges, Leonardo said it plans to adopt measures for the early retirement of about 500 employees, adding it had cut the valuation of its assets in the division.
The Aerostructures business is expected to absorb 350-400m euros of cash this year, with free operating cashflow seen improving to 100m from 40m euros last year.
Assuming no dividends on 2020 results, the group sees net debt at 3.2bn euros at the end of this year.
Leonardo last year forgave $300 m of related-party debt of DRS, which is now preparing for a listing on the NYSE, the unit said in a filing to the U.S. Securities and Exchange Commission. ($1 = 0.8413 euros) (Source: Reuters)
10 Mar 21. TT Electronics, the global provider of engineered electronics for performance-critical applications, today announce their Full Year Results.
- Recovery underway, with increasing order intake and improved production capacity after the impact of Covid-19
- 60 m investment in R&D and acquisitions
- Improving business performance and clear path to double-digit margins, supported by self-help actions
- Good trading momentum in 2021, underpinned by record order book
- Positive structural trends in markets expected to accelerate as a result of COVID-19 impacts
- Proposed final dividend of 4.7p per share
Results for the year ended 31 December 2020
Second half recovery and record order book, started 2021 well
- Recovery well underway, strengthening in Q4 with increasing order intake and improved production capacity, after Q2 COVID-19 impact
- £60m investment in R&D and acquisitions; Torotel largely integrated, performing well and bringing exciting business opportunities
- Benefiting from structural growth drivers associated with sustainability, supplying products for a cleaner, smarter and healthier world
- ESG credentials recognised through an improved ‘AA’ rating in MSCI ESG assessment
- Self-help programme on-track; yielding £2m benefits in 2020, a further £5m in 2021 and £11-12m full run-rate in 2023
- Full year revenue down 9% year-on-year at constant currency after COVID-19 impact; improving trend in H2
- Strong free cash flow of £14.4m, aided by £3.6m working capital inflow
- Resumption of dividend payments, reflecting good recovery and positive outlook
- Improving business performance and clear path to double-digit margins, supported by self-help actions
- Good trading momentum in 2021 underpinned by record order book
- Revenue in the five months from October 2020 to February 2021 flat organically versus prior year
- Positive structural trends in markets expected to accelerate as a result of COVID-19 impacts
09 Mar 21. Norway suspends Rolls-Royce asset sale on security grounds. Norway has suspended the sale of a Norwegian engine maker owned by Rolls-Royce Holdings to a Russian-controlled company while it assesses the security implications for the country’s navy and the civilian sector, the government said on Tuesday.
Norway’s NSM security agency is assessing the €150m ($178m) sale announced on Feb. 4 of Bergen Engines to a company controlled by Russia’s TMH Group, NSM and the justice ministry said.
Britain’s Rolls-Royce said it was selling Bergen Engines as part of a disposal plan aimed at helping the maker of engines for aircraft and ships survive the pandemic.
Based in Bergen on Norway’s west coast, Bergen Engines is, among other things, a supplier to NATO member Norway’s navy which is headquartered nearby.
“There is significant uncertainty in relation to national security interests, and this uncertainty must be dealt with,” Justice Minister Monica Maeland told a news conference to announce the suspension. “We don’t know which conclusion we will draw.”
TMH Group said it would cooperate with Norwegian authorities and it was hopeful of completing the transaction.
“We are fully aware of and take seriously our export control compliance obligations,” TMH said in a statement.
“This will include those obligations that relate to Bergen Engines, relating to the protection of any controlled technology including to prevent it being used for unauthorised end use.”
Norway’s justice ministry said any ongoing due diligence linked to the sale must also be put on hold during the review.
In 2019, Norway introduced a new security law strengthening the government’s ability to impose conditions or block foreign acquisitions when vital national interests are at stake.
While NSM assesses corporate takeovers from time to time, Norway has yet to block any business transactions since the law came in, the agency said.
“It’s very difficult to estimate how long this process will take,” NSM department head Frode Skaarnes told Reuters.
Rolls-Royce shares closed down 2.3% on Tuesday, lagging a 0.2% rise in the FTSE 100 benchmark index.
A spokesman for Rolls-Royce said it had alerted the government in the proper way before announcing the sale.
“We understand, however, that the Norwegian Government now wishes to further investigate the deal and Rolls-Royce will co-operate in any way we can with that review. As requested, we have paused the sales process,” the spokesman said.
Relations between Norway and Russia, which share a border in the Arctic, gradually improved in the post-Cold War era before suffering a setback when Moscow annexed Crimea in 2014.
That triggered more tension in the north with a military build-up on both sides and more frequent manoeuvres.
The Russian embassy in Oslo did not immediately respond to a request for comment.
Besides Bergen Engines’ commercial relations with Norway’s navy, authorities must also consider the wider implications of the Rolls-Royce deal, said Jakub Godzimirski, a research professor at the Norwegian Institute of International Affairs.
“It must be decided under Norway’s security law whether the new owners would get access to sensitive information,” he said. “If a Russian firm acquires a leading maker of engines, it could also give the Russian navy access to new technology.”
While Norway welcomes foreign investment, this must be balanced against potential threats to national security, the justice ministry said. Maeland said she planned to brief parliament separately on the matter.
Bergen Engines makes medium-speed gas and diesel engines for marine and power generation customers. It employs about 950 people and had revenue of £239m ($332m) in 2019. (Source: Reuters)
08 Mar 21. Buyers line up for Indian firm BEML. Some of India’s biggest private sector defence firms have been linked with bids to acquire a controlling stake in BEML Limited, formerly Bharat Earth Movers Limited.
Tata Motors, Mahindra and Mahindra, Bharat Forge, and Ashok Leyland – all producers of military vehicles – are reported to be preparing bids to acquire a 26% stake in the state-owned enterprise, which was put up for sale by the government earlier this year.
The private sector companies have not officially confirmed their interest, although BEML said in a stock exchange filing on 5 March that the company has now appointed a consultant for the share sale.
In January, the government initiated plans to sell its BEML stake through the release of an expression of interest document. The deadline for interested parties was 1 March. The sale of the 26% stake is expected to be worth around USD140m.
The government’s divestiture will take its ownership in BEML down to 28%. It holds a 54% stake, with most of the remainder owned through Indian stock exchanges.
In its earlier announcement, the government said that the buyer of BEML will be “required to undertake certain obligations” including employee protection, asset stripping, and business continuity. Various other conditions apply to the sale including security clearances and the requirement for investors to have a minimum net worth of USD191m.
BEML builds equipment including military trucks, artillery, missile launchers, engineering vehicles, recovery vehicles, and mine-protected vehicles. It is also involved in aerospace manufacturing, but its primary business sectors include mining, construction, and railways. (Source: Jane’s)
08 Mar 21. PCX Aerosystems Announces Agreement to Acquire Senior Aerospace Connecticut. PCX Aerosystems, a leading provider of flight-critical, life-limited dynamic components and systems for demanding aerospace applications, is announcing that they have reached an agreement with Senior plc to acquire its Senior Aerospace Connecticut operation located in Enfield, Connecticut (“SAC”).
This acquisition expands PCX’s portfolio with SAC’s complementary rotorhead & transmission component offerings and broadens the combined company’s customer relationships.
“We at PCX view the acquisition of SAC as a very positive transaction for all of our stakeholders. The combination of these two long-standing Connecticut manufacturers creates an enterprise capable of providing a broad set of supply chain solutions for our customers,” stated Jeff Frisby, PCX Aerosystems President and CEO.
With the addition of SAC’s complementary expertise, PCX Aerosystems believes there is significant revenue synergy opportunities across both military and commercial platforms. PCX is committed to continuous improvements and capital investments at both facilities to serve the growth needs of the OEM customer base.
“The combination of SAC and PCX creates a stronger supplier for our customer base with regards to capabilities and expertise, while providing SAC access to a broader market in which to pursue its growth strategy,” states Michael Lang, SAC Vice President and GM.
PCX Aerosystems is a leading supplier of highly engineered, precision, flight critical assemblies for rotorcraft and fixed wing aerospace platforms. Founded in 1900, the company serves defense and commercial aerospace markets. PCX focuses on producing complex parts machined from hard alloys such as titanium, Inconel and steel – where tight tolerances and quality are imperative. The company provides direct delivery of components and large assemblies to customers such as Boeing, General Electric Aircraft Engines, Bell Helicopter, and Sikorsky. PCX Aerosystems is owned by RFE Investment Partners and PCX management.
RFE Investment Partners, based in New Canaan, CT, is a private equity investor with over 40 years of lower middle market buyout experience investing in growth companies in partnership with entrepreneurial management teams. (Source: PR Newswire)
09 Mar 21. Novaria Group Announces Acquisition of The Young Engineers, Inc. This represents the third acquisition completed by Novaria with the support of equity partner KKR in the last nine months.
Novaria is pleased to announce the acquisition of The Young Engineers, Inc. (TYE). TYE is an expert in the design and manufacturing of aircraft and aerospace hardware, with a primary focus on fasteners and inserts. The terms of the deal were not disclosed.
This acquisition continues Novaria’s expansion into aerospace fasteners. “We have made several acquisitions since April 2020, all of which are unique contributors to our evolving business model,” said Novaria CEO Bryan Perkins. “The acquisition of TYE is an integral part of our strategy to expand our portfolio of proprietary and qualified products we offer customers.”
The company’s extensive product range consists of industry-standard and proprietary potted, mechanically attached, floating nut and panel fasteners.
“The decision to acquire TYE was an easy one, given its reputation in aerospace and its fit with our family of operating companies,” said Novaria CFO Justin Tucker. “We are looking forward to having access to TYE’s expertise and resources, which will allow us to expand our product line and differentiated solutions.”
Since its founding in 1963, TYE has successfully introduced several product lines to the aerospace industry. TYE’s committed focus on its innovation and a new partnership with Novaria will allow them to continue to expand its product portfolio and drive innovations to the market.
TYE operations will continue at its Southern California facility with its tenured, skilled employees, including former owner and president Pat Wells.
“Incorporating our product line within Novaria is a great combination that will continue the over 50-year history of TYE and allow for additional growth,” Wells said. “I look forward to joining Novaria, as their growth and success was a big factor in choosing them as partners for the next phase of TYE.” (Source: BUSINESS WIRE)
09 Mar 21. Ultra Electronics secures record order book.
- The order book reached £1.1bn at the end of last year
- Ultra’s underlying operating profit rose by 7 per cent to £126m
Thanks to robust defence spending in the ‘five eyes’ nations – the US, Canada, UK, Australia and New Zealand – Ultra Electronics’ (ULE) order book expanded by 4 per cent in 2020, to a record £1.1bn. Contract wins included a $145m (£104m) ‘indefinite delivery, indefinite quantity’ (IDIQ) agreement to supply its Orion radio systems to the US Navy.
The group’s underlying operating profit increased by 7 per cent to £126m. Momentum was led by 12 per cent growth in the maritime division amid stronger demand for sonar products such as sonobuoys, which are electronic sensors that detect enemy submarines. This offset weakness in the ‘critical detection and control’ business, where commercial aerospace orders dropped by close to a fifth.
Net debt has fallen by 45 per cent to £86m, equivalent to just 1.1 times adjusted cash profits. On the back of £99m of free-cash-flow generation, the group has declared a final dividend of 41.5p a share.
Coming into 2021, Ultra’s order book provided visibility over 71 per cent of expected revenue and it has continued to secure new contracts. A focus on areas such as cyber security and electronic warfare leave it well positioned for the evolving priorities of global defence spending, and its accelerated transformation plan should translate to improved margins. Buy. Last IC View: Buy, 1,898p, 8 Apr 2020. (Source: Investors Chronicle)
08 Mar 21. Italy’s Leonardo forgave $300m of U.S. unit DRS’ debt ahead of IPO: filing. Italian aerospace and defence group Leonardo last year forgave $300m of related-party debt of its DRS unit, which is now preparing for a listing on the NYSE, the unit said in a filing to the U.S. Securities and Exchange Commission.
After the transaction, New Jersey-based DRS recorded a fall in its total net debt to $427m last year from $712m in 2019, according to the filing.
The forgiven debt was part of a $2bn credit agreement between Leonardo group’s 100% owned subsidiary US Holding and DRS and provided for a term loan maturing in 2022, paying a 7.5% interest rate.
Leonardo filed for an initial public offering (IPO) of DRS last month with the aim of listing a minority stake in the unit.
To get ready for the upcoming listing on the New York Stock Exchange, DRS said it planned to repay $237m of related-party borrowings and issue $450m of new debt.
The defence electronic division intends to keep future profits for growth and does not anticipate paying a regular cash dividend, the unit said in the filing. It said that Leonardo, which currently owns 100% of DRS, will receive all of the proceeds from the IPO.
DRS said adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved to $268m last year from $234m in 2019, while the EBITDA margin on sales rose to 9.6% from 8.6%.
To have access to classified data and bid on classified programs for the U.S. department of defence, independent managers will exercise voting rights linked to DRS shares owned by Leonardo, the filing said, referring to a revised proxy agreement that governs relations between the unit and its main investor. (Source: Google/Reuters)
08 Mar 21. Accenture has acquired Australian-based supply chain and logistics consulting firm, GRA. Founded in 1997, GRA has offices in Melbourne, Canberra and Brisbane with a team of 50. The firm specialises in end-to-end supply chain and logistics strategies and operations, working with some of Australia’s leading organisations in areas such as government, aerospace and defence and consumer goods.
“The pandemic has accelerated the need for businesses to transform their supply chains to become more customer focused, agile, and socially responsible with the flexibility to withstand future disruptions,” Tara Brady, country managing director for Accenture in Australia & NZ, said. “The addition of GRA will expand our supply chain and operations capabilities to help clients with their transformation to intelligent, customer-centric supply chains supporting profitable growth.”
“We are looking forward to starting a new chapter with Accenture and contributing our skills, culture and extensive supply chain capabilities to Accenture’s substantive network of clients and partners,” Carter McNabb, Partner at GRA, said. “With supply chains across sectors at a pivotal junction, we are confident that this combination will enable both our team and clients to continue to grow and innovate at an accelerated pace.” (Source: Google/ADM)
08 Mar 21. Babcock parts ways with long-term auditor PwC. UK’s second biggest defence contractor signals fresh start under new management. Babcock has appointed Deloitte as its new external auditor, subject to shareholder approval. Babcock International, the UK’s second biggest defence contractor, is parting ways with PwC, its longstanding auditor, as new chief executive David Lockwood puts his stamp on the group. The company has appointed Deloitte as its new external auditor, subject to shareholder approval at this year’s annual meeting. PwC has advised Babcock since 2002. Governance rules stipulate companies must rotate auditors after a maximum period of 20 years, although calls for more regulator rotation have intensified in the wake of corporate collapses, such as government contractor Carillion. Babcock flagged a change was in the offing in its annual report last year. The company unnerved investors in January when it signalled it could be forced to cut the expected value of contracts and future income. In a trading update, Babcock said it had brought in an independent accountancy firm to review its balance sheet and contract profitability, the results of which would be reviewed by PwC. The company warned that early indications suggested “there may be negative impacts on the balance sheet and/or income statement for current and/or future years”, but refused to clarify which contracts could face revision. Babcock at the time also ruled out providing any financial guidance for the remainder of its financial year. The news sent its shares down by 18 per cent on the day to 216p. They closed at 257p on Friday. Lockwood, who ran Cobham before it was acquired by private equity group Advent International, took the helm last September, replacing Archie Bethel, a 16-year Babcock veteran. He moved swiftly to make his mark on the company, launching a strategic review of its businesses and bringing in a new finance director, David Mellors, also from Cobham, to succeed the retiring Franco Martinelli. Babcock provides maintenance and support for the UK’s nuclear submarines at Faslane, and was a member of the consortium that built new aircraft carriers. Recommended LexBabcock International Group PLC Babcock: crash dive Premium It has been battling to shore up confidence in its performance ever since an unknown group, Boatman Capital Research, published a list of highly critical claims two years ago including that the company faced “potentially massive exceptional costs”. Babcock has consistently rejected the claims in the Boatman report, but the allegations wiped millions of pounds off the Babcock’s shares. Babcock said: “As indicated in our 2019/20 annual report, as planned we ran a process to tender the external audit during the course of this financial year, and as a result have selected Deloitte to be our external auditor for 2021/22, subject to shareholder approval. PwC, having been auditor since 2002, was not invited to participate in the recent tender.” Analysts have suggested that a rights issue to bolster the balance sheet is looking increasingly likely. Barclays in January suggested a rights issue between £400m-£600m was probable. (Source: FT.com)
08 Mar 21. Nordic Unmanned Raises Capital for Acquisitions. Nordic Unmanned, a Norway-based provider of unmanned systems and services, announced that it has carried out a private placement of NOK 100m to pursue acquisitions.
“While we see strong organic growth ahead, we also see tremendous opportunities to add value through acquisitions. We have mapped the industry in Europe, identifying a number of potential acquisition targets. There are a number of smaller niche players in the industry that will benefit from the growth engine we have built,”
said Knut Roar Wiig, CEO and co-founder of Nordic Unmanned.
The European drone market was estimated at approximately USD5bn in 2020 and is expected to double in size by 2025. The largest revenue segment is services, which is Nordic Unmanned’ s focus.
Nordic Unmanned was publicly listed on Euronext Growth in Oslo in December 2020 following a private placement of NOK 99m, with the main purpose of expanding the fleet of unmanned aircraft. Since then, one Schiebel CAMCOPTER S-100 RPAS system is added to the fleet, and further additions are on the way.
“We’re the first publicly listed drone operator in Europe, and the strong reception after the listing has enabled us to raise further capital at favourable terms, putting us in an even better position to be a leader in an upcoming industry consolidation,” said Mr. Wiig. (Source: UAS VISION)
08 Mar 21. Tata, Mahindra, Ashok Leyland eye BEML stake. At least six companies, including Tata Motors Ltd, Mahindra and Mahindra Ltd and Ashok Leyland Ltd, are looking to buy a 26% stake in state-run defence equipment maker BEML Ltd, two people aware of the developments said.
Bharat Forge Ltd and Megha Engineering and Infrastructure Ltd may also submit expressions of interest for the government’s stake in BEML, the people said on condition of anonymity.
Companies such as Tata Motors, Mahindra and Ashok Leyland are looking to seek control of BEML as part of their strategy to grow their defence manufacturing businesses and cut dependence on the core commercial vehicle business, which is cyclical in nature.
“For auto companies, BEML is a major competitor in the tenders and would eventually win a lot of them since it’s state controlled. Hence, it makes sense for these companies to acquire the heavy-vehicle manufacturing company,” said a senior executive from one of the firms cited above, requesting anonymity.
The government, which owns 54% in BEML, invited expressions of interest for the stake sale in the defence equipment maker, along with the transfer of management control, on 4 January. The department of investment and public asset (Dipam) initially set 1 March as the deadline for submission of interest but later extended it to 22 March.
SBI Capital Markets Ltd is advising the government on the sale process.
“After the EoIs (expressions of interest have been received, SBI Capital Markets will intimate the shortlisted bidders of the next stage,” said one of the two people cited above.
BEML manufactures products such as the Prithvi missile launcher, army transportation vehicles, and railway and metro coaches. The company operates in three major business segments—mining and construction, defence and aerospace, and rail and metro. It has nine manufacturing units in Bengaluru, Kolar Gold Fields, Mysuru, Palakkad and Chikkamagaluru.
Spokespeople for SBI Capital Markets, Mahindra and Mahindra Ltd and Ashok Leyland Ltd declined to comment.
A spokesperson for Megha Engineering confirmed the company’s interest in BEML but declined to elaborate.
Queries emailed to the spokespeople for the finance ministry, Dipam and Tata Motors on Friday afternoon and Bharat Forge on Saturday morning remained unanswered till the time of publishing this story.
The stock price of BEML rose by 24% in the last one month to ₹1,171.90 on BSE.
Presenting the Union budget for the year starting 1 April, finance minister Nirmala Sitharaman announced details of a new central public sector enterprise (CPSE) policy, paving the way for the privatization of non-strategic state-owned companies.
Sitharaman has said that the government aims to keep the “bare minimum” CPSEs in four strategic sectors and privatize the rest or close down unviable ones. The four strategic sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance and financial services.
The stake sales in BEML will help bolster the government’s efforts to raise funds via asset sales for the next fiscal year.
The government hopes to generate ₹1.75tn from disinvestment receipts in the coming fiscal.
The government missed its ₹2.1tn FY21 disinvestment target by a wide margin and pushed key transactions such as that of Air India Ltd and Bharat Petroleum Corp. Ltd to the next fiscal year. (Source: Google/https://www.livemint.com/companies/news)
06 Mar 21. Investor Chamath Palihapitiya confirms selling shares in Virgin Galactic. Venture investor Chamath Palihapitiya on Saturday confirmed in a tweet that he has freed up some capital by selling shares in Virgin Galactic Holdings Inc, for investing at scale without impacting his pace and strategic view.
“I hated to do it but my balance sheet shrank by almost $2B this week,” he mentioned in the tweet here thread, adding a sad emoji.
In the long tweet thread, mentioning about reviewing and remodeling of everything he invested in, Palihapitiya also clarified that he did not sell any shares of any other SPAC he launched.
A regulatory filing showed Palihapitiya sold 6.2 million shares in the space tourism company he helped take public in 2019, for around $213m.
In an emailed statement through a spokesman on Friday, Palihapitiya said he would redirect the funds from the share sale toward a “large investment” focused on the fight against climate change. Virgin Galactic did not immediately respond to request for comment. (Source: Reuters)
04 Mar 21. Safran Signs EUR500M Loan Agreement With European Investment Bank to Finance Research on Future Aircraft Propulsion Systems.
- A major step forward in Europe and Safran’s roadmap for carbon-free air transport by 2050
- A French-led project primarily intended for the next generation of single-aisle commercial airplanes
The European Investment Bank (EIB) has given Safran a 500m euro credit line to finance its research into innovative propulsion systems for the next generation of single-aisle commercial airplanes. This marks a major step forward in Safran’s roadmap to achieve carbon-free air transport.
The loan agreement underscores the purpose of the EIB, which recently redefined itself as a “climate bank”, to support industry research and innovation efforts to foster the transition toward a decarbonized and environmentally-friendly economy.
The project is primarily being carried out by Safran in France. Reflecting its ecological goals, the project is aiming for a drastic reduction in fuel consumption by the next generation of single-aisle commercial airplanes. It also represents a decisive step toward the ambitious objective of achieving carbon-neutral flights by 2050. The project has four main goals: maximize propulsion efficiency; intensively optimize energy management; develop disruptive technologies and integrate them in aircraft. By combining these four aspects, the next generation of airplanes will be able to fly using only alternative fuels.
The credit line will be made available from now to September 2022, with the date to be chosen by Safran, and will have a maturity date of up to ten years, starting when the funds are provided.
The European Investment Bank is a long-standing partner to Safran, and had already provided €300m in funding back in 2009 to help develop the LEAP engine.
“The funding arrangement set up with the EIB will make a decisive contribution to Safran’s research into carbon-free aviation,” noted Bernard Delpit, Safran’s Chief Financial Officer. “The disruptive technologies developed by these projects should make a significant contribution to meeting our goal of carbon-neutrality. At Safran, we are very pleased to have established a long-standing relationship with this institution, which has already helped finance several of our key projects.”
“This emblematic project perfectly illustrates the EIB’s mandate of helping to make Europe the first economy to achieve carbon neutrality by 2050,” said Ambroise Fayolle, Vice-President of the European Investment Bank. “To meet this goal for the air transport sector, one in which Europe is a world-class player thanks to companies like Safran, we must develop innovative new propulsion systems to ensure the environmental transition. The EIB is delighted to support Safran’s efforts in meeting this technological challenge.” (Source: ASD Network)
01 Mar 21. Rocket Lab SPAC’s Up To Become A Publicly Traded Company + Unveils Their New Launch Vehicle, Neutron.
If you happened to attend the recent SmallSat Symposium 2021, you know that one of the “hot’ topics for keynotes, panels and discussions targeted the information regarding the Special Purpose Acquisition Companies (SPAC) and the associated funding possibilities for satellite and space companies. Now, Rocket Lab USA, Inc. and the Vector Acquisition Corporation (Nasdaq: VACQ) (“Vector”) SPAC backed by technology investor Vector Capital have entered into a definitive merger agreement that will result in Rocket Lab becoming a publicly traded company.
The transaction is estimated to be completed in Q2 2021 and, at that time, Vector will change its name to Rocket Lab USA, Inc., and the combined company will trade under the Nasdaq ticker symbol RKLB.
Record Rocket Lab is transforming the way space is used and accessed by delivering end-to-end solutions across the launch and space systems markets. Since the Company’s first orbital launch in 2018, the firm’s Electron launch vehicle has become the second-most frequently launched U.S. rocket each year. To date, Rocket Lab has delivered 97 satellites to orbit for more than 20 public and private-sector organizations and technology-leading constellation operators.
Rocket Lab’s customer base is evenly split across government and commercial organizations that include NASA, the NRO and DARPA, as well as commercial satellite leaders. As the first company to deliver regular and reliable dedicated launch services for smallsats, Rocket Lab has also played a leading role in catalyzing the growth of the commercial small satellite industry.
The satellites launched by Rocket Lab enable operations in national security, Earth Observation (EO), space debris mitigation, weather and climate monitoring, communications and scientific research. Rocket Lab has an established space systems business that develops satellite and spacecraft solutions for a range of commercial and government missions, from LEO constellations to high-complexity,deep space and interplanetary missions.
Rocket Lab’s Photon spacecraft family delivers a satellite-as-a-service solution that eliminates the typical high cost, time and complexity customers face when building their own satellites. With Rocket Lab, customers can buy a launch, satellite, ground services and on-orbit management as a turn-key package, resulting in a disruptive reduction in cost and time to orbit. Rocket Lab has an operational Photon in orbit, with additional missions to the Moon, Mars and Venus planned.
In 2021, Rocket Lab will employ Electron and Photon to launch a satellite to lunar orbit for NASA to serve as a precursor for Gateway, a Moon-orbiting outpost that is part of NASA’s Artemis program to return humans to the lunar surface.
Rocket Lab also unveiled their medium-lift Neutron rocket — an advanced new generation, reusable, launch vehicle with an 8-ton payload lift capacity that is tailored for mega constellations, deep space missions and human spaceflight. Neutron will be able to lift more than 90% of all satellites forecast to launch through 2029 and introduces highly disruptive lower costs to the high-growth constellation market by leveraging Electron’s heritage, launch sites and architecture.
Rocket Lab’s in-house launch and space systems capabilities provide significant competitive advantages in entering the high-growth space applications market that comprises approximately $320 bn of the current $350+ bn space industry TAM. Having reached these milestones — and considering the unprecedented commercial investment and government expenditures driving rapid growth in the space economy — Rocket Lab and the firm’s Board of Directors believe that this proposed transaction is the appropriate next step to position the Company for continued success.
On March 1, 2021, Rocket Lab entered into a definitive merger agreement with Vector. The transaction reflects an implied pro forma enterprise value of $4.1bn for Rocket Lab, representing 5.4 x 2025 projected revenue of approximately $750m.The transaction is expected to result in pro forma cash on the balance sheet of approximately $750m through the contribution of existing cash estimated to be on Rocket Lab’s balance sheet prior to close, up to $320 m of cash held in Vector Acquisition Corporation’s trust account(assuming no redemptions by Vector’s public shareholders), and a concurrent, approximately $470m PIPE of common stock, priced at $10.00 per share and led by Vector Capital, BlackRock and Neuberger Berman, among other top-tier institutional investors.
The transaction, which has been unanimously approved by the Boards of Directors of Rocket Lab and Vector, is subject to approval by Vector’s shareholders and other customary closing conditions. Following the closing of the transaction, the Company will continue to be led by Founder and CEO Peter Beck. Alex Slusky, CEO of Vector and CIO and Founder of Vector Capital, will join Rocket Lab’s Board of Directors alongside Sven Strohband of Khosla Ventures, David Cowan of Bessemer Venture Partners, Matt Ocko of DCVC and Mike Griffin, independent director.
Peter Beck, CEO and Founder of Rocket Lab, said, “In the history of spaceflight, Rocket Lab is one of only two private companies that has delivered regular and reliable access to orbit. Not only are we the leader in small launch, we are the second most frequently launched rocket in the U.S. annually and the fourth most frequent launcher globally. Space has defined some of humanity’s greatest achievements, and it continues to shape our future. The satellites we build and launch are keeping countries connected and borders protected, monitoring weather and managing waste, providing insights on climate change, and helping us manage resources for future generations. Since day one, our talented Rocket Lab team has demonstrated stellar execution and a keen ability to seize growth opportunities. Now, we are thrilled to build upon this momentum and welcome Alex Slusky, a seasoned technology investor and public company director to our Board as we come together with Vector to become a publicly traded, pure-play, end-to-end space company. This milestone accelerates Rocket Lab’s ability to unlock the full potential of space through our launch and spacecraft platforms and catalyzes our ambition to create a new multi-bn-dollar business vertical in space applications.”
Alex Slusky, CEO of Vector and Founder and Chief Investment Officer of Vector Capital, said, “Rocket Lab is a once-in-a-generation company that is democratizing access to space through its constant innovation, leading technology and proven execution. Peter is a true visionary who has built a world-class company with discipline and grit. Rocket Lab is ideally positioned to continue to capture market share in the rapidly expanding space launch, systems and applications markets. Vector Capital has a nearly 25-year track record of identifying and building high-growth technology businesses and we are thrilled to partner with Peter and Rocket Lab’s talented team to support the Company’s next generation platforms and capabilities. Vector is thrilled to partner with Rocket Lab as it seeks to capitalize on unprecedented commercial and government spending in the burgeoning space economy.” Key
Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be available in a Current Report on Form 8-K to be filed by Vector with the Securities and Exchange Commission and at www.sec.gov.The investor presentation can also be found on Rocket Lab’s investor website at www.rocketlabusa.com/investors. (Source: Satnews)
03 Mar 21. Comtech Telecommunications Completes Acquisition Of UHP Networks. Comtech Telecommunications Corp. (“Comtech”) (NASDAQ: CMTL) has closed the acquisition of UHP Networks Inc. (“UHP”). Founded in 2011, UHP is based in Canada and has developed revolutionary technology that is transforming the growing Very Small Aperture Terminal (“VSAT”) market.
UHP’s unique time divisional multiple access (“TDMA”) technology used in its VSAT platforms has software defined network functionality that offers best-in-class support for very large networks. With more than 3 bn people globally who are not connected to any wireless services, the UHP acquisition allows Comtech’s customers to cost-effectively provide service to end-users with the quality and reassurance of the Comtech brand and service offerings.
All UHP employees are expected to join Comtech, including Vagan Shakhgildian, the President of UHP, who will also assume the role of Senior Vice President of Network Products, leading Comtech’s efforts to expand the presence of both HEIGHTS™ and UHP’s solutions in the mobile backhaul, maritime, enterprise and defense/government markets, which all have a growing need for high-speed satellite-based networks.
The initial up-front payment of approximately $24.0m was paid in shares of Comtech common stock. An additional payment of $5.0m (payable in cash and/or common stock at Comtech’s option) is due upon certain conditions being met, all of which are expected to occur within the next 12 months. The purchase agreement also provides for an earn-out payment of up to an additional $9.0m (payable in cash and/or common stock at Comtech’s option) if certain agreed upon sales milestones are reached over an eighteen-month period. Approximately 1.0 m shares of Comtech’s common stock were issued at closing in respect of the initial payment and escrow arrangements under the terms of the purchase agreement.
Comtech is not purchasing UHP’s sister company headquartered in Moscow; however, Comtech will be able to immediately market and sell UHP products to customers in that region. Except for five months of incremental amortization of intangible assets that is expected to approximate $1.0 m, the acquisition will not materially impact Comtech’s fiscal 2021 consolidated net sales or Adjusted EBITDA guidance previously issued on December 9, 2020.
Fred Kornberg, Chairman of the Board and Chief Executive Officer of Comtech said, “The acquisition of UHP fits perfectly with our strategy of offering the most robust and advanced wireless communications solutions for our global customers. We are delighted to acquire UHP and expect use of its incredible technology to expand globally for many years to come.”
01 Mar 21. RUAG Aerospace Services Sale Completed. RUAG has announced the completion of the sale of RUAG Aerospace Services GmbH to General Atomics Europe. RUAG International has transferred all shares in RUAG Aerospace Services GmbH to General Atomics Europe (GA-Europe). GA-Europe will take over the maintenance activities for private aircraft and military aircraft as well.
With the transfer of ownership (contractual closing) from RUAG Aerospace Services GmbH to General Atomics Europe (GA-Europe), all company shares have been transferred to the new owner. The sale process has thus been contractually completed. GA-Europe is taking over all business activities as well as all of the approximately 420 employees. At the Oberpfaffenhofen site, RUAG International continues to employ 800 people in aerostructures construction (RUAG Aerostructures) – this business segment is not affected by the sale.
Felix Ammann, former Managing Director of RUAG Aerospace Services GmbH, says: “We are very pleased with the successful conclusion and wish General Atomics Europe every success for the future. We are convinced that they bring excellent prerequisites with them to successfully continue the business activities and sustainably secure the jobs for the future.”
Harald Robl, Managing Director of General Atomics Europe, adds: “With this acquisition, GA-Europe is sustainably strengthening its market positioning in the aviation business. We have developed a strategic concept for the future that will open up new growth and value creation prospects for the Oberpfaffenhofen site, far beyond the existing business areas, despite the current economic crisis.”
A corresponding agreement (signing) for the acquisition of the business activities of RUAG Aerospace Services GmbH has already been signed by both companies on 30 September 2020. The sale is in line with the concept for the unbundling and realignment of RUAG International approved by the Swiss Federal Council on 15 March 2019. The parties have agreed not to disclose the contractual terms.
Further developed and expanded: RUAG International took over the two divisions Services and Components of the former German aircraft manufacturer Fairchild Dornier in 2002. After the takeover, RUAG Aerospace Structures GmbH (RUAG Aerostructures) and RUAG Aerospace Services GmbH were created.
With the transfer of the services division, the then RUAG supplemented the product and service portfolio with the production of the Dornier 228 and its customer support, as well as maintenance on business jets and military helicopters. In 2007, RUAG began further development of the Do228 into the Do228 Next Generation, and in 2009 RUAG resumed production of the aircraft. The successful maiden flight of the new series aircraft took place on 30 July 2010. To this day, the Do228 NG is manufactured in Oberpfaffenhofen and Customer Support looks after customers worldwide.
In the field of military helicopter maintenance, new orders were secured for the NH90 of the German Armed Forces. The site is thus well positioned for the future. In business jets, the company focused on creating added value for customers through its ‘one-stop shop’ approach. This also strengthened its position in the market thanks to the improved customer experience. (Source: joint-forces.com)
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.