Sponsored by TCI International Inc.
www.tcibr.com
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14 Apr 21. Sierra Nevada Corporation to spin off space division. Sierra Nevada Corporation (SNC) will spin off its space division into a separate company, a move reflecting the “historic growth” it foresees for that business in the next several years.
In a message to employees April 14, SNC Chairwoman and President Eren Ozmen said the company’s Space Systems division will become a standalone company, called Sierra Space, although remain a subsidiary of SNC.
Creating Sierra Space, she said, will enable the company to better capture expected growth in the space industry. SNC’s space business currently generates $400m in annual revenue, and she projected that increasing to $4bn in 5 to 10 years. Privately-held SNC has traditionally disclosed few details about its revenue.
“To achieve this growth and even greater impact more quickly, today we are announcing our space business area will transition to become an independent, commercial space company – Sierra Space,” she wrote. “Our teams and technologies are uniquely positioned to realize this significant current market opportunity to build the new space economy.”
Ozmen provided few details about how the transition of SNC’s space business to Sierra Space would unfold, but she said it would take several months to complete. Even after the transition, Sierra Space will “continue deep cooperation and synergy” with SNC’s other business areas in aviation and defense.
How SNC built its space business
SNC’s space business dates back to acquisitions in 2008 of MicroSat Systems, a small satellite developer, and of SpaceDev, a company with expertise in spacecraft components and hybrid propulsion systems. SNC acquired Orbital Technologies Corporation, a space technology company involved in propulsion and life support systems, in 2014.
The SpaceDev acquisition brought with it the technology for Dream Chaser, a lifting-body spacecraft that SNC developed first through NASA’s commercial crew program and then its commercial cargo program. The first cargo Dream Chaser is being built for launch in 2022 under a NASA contract to resupply the International Space Station.
SNC remains interested in developing a crewed version of Dream Chaser, and is also working on inflatable module technology called Large Inflatable Fabric Environment (LIFE) through NASA’s Next Space Technologies for Exploration Partnerships, or NextSTEP, program. The company is proposing to combine Dream Chaser and LIFE into concepts for a commercial space station.
“Vibrant low-Earth orbit economy”
At a March 31 media event, SNC officials described their space station concepts, as well as the company’s intent to participate in NASA’s new Commercial LEO Destinations program, which will provide funding through Space Act Agreements to mature commercial space station designs.
At that event, an executive said the company was disappointed in NASA’s planned funding for that program, which will be limited to between $300m and $400m combined over as many as four Space Act Agreements. “We’re a little disappointed in the amount of money NASA wants to put against it and the timeline,” John Roth, vice president of business development at Sierra Nevada Space Systems, said at the briefing.
He called for greater investment by NASA to speed up development of commercial space stations. “We have done financial modeling and it’s not going to be inexpensive,” he said. “We’re prepared to invest beside NASA in a public-private partnership to make that happen.”
Ozmen, in her memo, described the company’s role in creating a “vibrant low-Earth orbit economy” with Dream Chaser and that commercial space station, along with the use of LIFE modules for exploration and other technologies SNC has developed.
“Demand is soaring for experienced, cutting-edge technologies like ours, and the high barrier to entry gives us an important competitive advantage,” she wrote. “We have the right team and the right tech at the right time, and our customers expect even more great things from us in the future.” (Source: glstrade.com/Space News)
15 Apr 21. Darktrace IPO filing contradicted earlier claim on Mike Lynch role. Complication for cyber security group’s efforts to distance itself from Autonomy founder. Mike Lynch is currently battling extradition to the US and Darktrace has told potential investors there is a risk it could be embroiled in his case. Darktrace has issued contradictory information about the role of British tech billionaire Mike Lynch, who has been charged with fraud in the US, complicating the cyber security company’s efforts to distance itself from the Autonomy founder ahead of its potential £3bn float. In 2018, Darktrace told the Financial Times that Lynch had left its advisory council the previous year as explanation for why he was removed from its website. But the company’s stock market registration document published this week says he remained on the body until March 2021. Darktrace, whose cyber security product is designed to detect unusual network activity, is hoping to list on the London stock market in the coming weeks, hot on the heels of the disastrous float of another high-flying British venture-backed start-up, Deliveroo. The opposing statements Darktrace has made about Lynch’s role threaten to undermine its efforts to distance itself from his legal woes. Lynch is currently battling extradition to the US and Darktrace has told potential investors there is a risk it could be embroiled in his case. Darktrace had no comment, but a person close to the company denied there had been any inconsistency in its statements. Lynch’s investment firm, Invoke Capital, said: “In 2017 Dr Lynch stepped back from the advisory council and has not attended any meetings since. We understand that as part of Darktrace’s IPO process the advisory council documentation has been updated to reflect this.” Lynch was indicted in the US in November 2018 for allegedly artificially inflating revenues at Autonomy, the software company he founded and ran before selling it to HP in 2011 for $11bn.
He has always strenuously denied any wrongdoing. After the Autonomy sale, Lynch set up Invoke, the investment vehicle through which in 2013 he helped launch Darktrace and funded the start-up for the first two years before it attracted other investors that have included Summit Partners and KKR. Today he and his wife, Angela Barcares, are major individual shareholders, owning 18.5 per cent of the company between them. The links went beyond Invoke’s initial investment in Darktrace. Invoke and Darktrace shared office space for years; several of Darktrace’s top executives worked at Invoke and Autonomy; two Invoke employees “supported the finance function” of Darktrace; and since 2013 the cyber security company has paid millions to Invoke for managerial services provided by Lynch and others. The ties with Invoke and Autonomy proved embarrassing as the US investigation into Autonomy heated up with the April 2018 conviction of Sushovan Hussain, the former Autonomy chief financial officer and a Darktrace board member until November 2016. In October 2018, the Financial Times reported that Lynch had been removed from the list of the advisory council members on Darktrace’s website. Lynch at the time was also a director, though he subsequently resigned when he was indicted. Darktrace that month told the FT that Lynch had stepped down from the advisory council, then called the advisory board, in 2017. “Mike Lynch does not sit on the advisory board,” the company said, adding: “Given his position on the board of directors, it was deemed redundant for Mike to be on both the advisory board and the board of directors. With growing responsibility at Invoke Capital, he decided to just be on the board of directors for Darktrace in 2017.” Recommended Helen Thomas Why it won’t be Deliveroo that casts a shadow on Darktrace In the registration document this week, Darktrace said the advisory council had been set up in September 2013 and that: “Michael Lynch was a member of the Advisory Council from its establishment until March 2021.” It makes no reference to Lynch stepping down or back from the advisory council before this year or declining to attend meetings. Darktrace disclosed in its registration document that in 2018 it was subpoenaed by US authorities for information about Invoke, warning there was a risk Lynch’s investment through Invoke could give rise to money laundering claims if the funds included cash from the Autonomy sale. The start-up added that it viewed such a risk as low, saying it had not been contacted by the US Department of Justice since the 2018 subpoenas and that it did not believe Darktrace was the target of any DoJ investigation. The company also said that as of this month it had materially completed “a transition plan for its full separation from Invoke” that included the “separation of shared office premises, the transfer of certain personal and other operational matters”. The managerial services contract with Invoke will also end when the company lists, with Darktrace paying a £1.2m termination fee. (Source: FT.com)
14 Apr 21. MDA Ltd. Announces Closing of Over-Allotment Option. MDA Ltd. (“MDA” or the “Company”), a leading provider of advanced technology and services to the burgeoning global space industry, today announced that, further to its recently completed initial public offering of common shares (the “Common Shares”) of the Company (the “Offering”), the over-allotment option granted to the Underwriters (as defined below) to purchase up to an additional 4,285,725 Common Shares at a price of $14.00 per Common Share (the “Over-Allotment Option”) was exercised in full, generating additional gross proceeds to the company of approximately $60m.
Pursuant to the Offering, MDA issued 28,571,500 Common Shares at a price of $14.00 per Common Share for gross proceeds to the Company of approximately $400m.
The Common Shares began trading on the Toronto Stock Exchange on April 7, 2021 under the symbol “MDA”.
Following the closing of the Over-Allotment Option, there are 119,238,920 Common Shares issued and outstanding.
The Offering was made through a syndicate of underwriters led by BMO Capital Markets, Morgan Stanley Canada Limited and Scotiabank, as joint bookrunners, with Barclays Capital Canada Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., CIBC World Markets Inc., National Bank Financial Inc. and Stifel Nicolaus Canada Inc., as underwriters (collectively, the “Underwriters”). (Source: PR Newswire)
14 Apr 21. COMSovereign Expands its Advanced Wireless Signal Processing Capabilities with the 14 Apr 21. Acquisition of Innovation Digital, LLC.
– Acquisition Brings Unmatched Digital Signal Processing Expertise, Patented Portfolio of Algorithms to Enable Development of High-Performance Communications Products and Licensing Revenue Stream –
COMSovereign Holding Corp. (NASDAQ: COMS) (“COMSovereign” or “Company”), a U.S.-based developer of 4G LTE Advanced and 5G Communication Systems and Solutions, today announced that it is acquiring Innovation Digital, LLC (“Innovation Digital”), a premier developer of “beyond state-of-the-art” mixed analog/digital signal processing solutions, intellectual property (IP) licensing, design and consulting services.
Innovation Digital’s signal processing techniques and IP have significantly enhanced the bandwidth and accuracy of RF transceiver systems and have provided enabling technologies in the fields of communications and RADAR systems, signals intelligence (SIGINT) and electronic warfare (EW), test and measurement systems, and semiconductor devices.
Terms of the transaction include total consideration of $8m consisting of $1.6 m in cash and convertible debt and $6.4m worth of shares of restricted common stock. The transaction is expected to close within approximately 10 days subject to traditional closing conditions. Following the close of the transaction, Dr. Scott Velasquez will assume the role of Chief Research Officer for COMSovereign including the oversight and management of the Lextrum, VEO and Innovation Digital business units.
Transaction Highlights
- The firm provides intellectual property licensing, design and consulting services supporting the implementation of advanced digital system technologies and services for extremely high-performance communications, RADAR, and integrated component applications. Clients include multiple U.S. defense contractors such as General Dynamics, Raytheon, L3Harris and various U.S Department of Defense agencies including The Naval Surface Warfare Center, the Missile Defense Agency, the Air Force Research Laboratory and DARPA.
- The accretive acquisition of Innovative Digital is expected to contribute approximately $3 m in net revenue from licensing this year from committed customers.
- Innovation Digital holds 21 issued and several pending United States Patents. As part of COMSovereign, its valuable IP and expertise will further advance the performance capabilities of the Company’s entire range of next-gen radio products that will set a new standard for throughput and efficiency.
- Innovation Digital was founded by Dr. Scott Velazquez, who holds four degrees from MIT including a Ph.D. in Electrical Engineering. Scott is considered the pioneer, and still one of the foremost experts in mixed analog/digital signal processing technology.
“Innovation Digital’s engineers are among the top experts in signal efficiency and waveform engineering and aligns with our strategy of building and maintaining our technological leadership and capabilities through either organic means or via acquisition. Their addition to our team will accelerate the integration of both Lextrum’s In-Band-Full-Duplex and the licensed Transpositional Modulation technologies into our next generation ‘Polaris’ 5G radio products, resulting in dramatic improvements in product performance and expanding our unique features and capabilities,” said Dr. Dustin McIntire, CTO of COMSovereign.
For more information about COMSovereign, please visit www.COMSovereign.com and connect with us on Facebook and Twitter.
About COMSovereign Holding Corp.
COMSovereign Holding Corp. (Nasdaq: COMS) has assembled a portfolio of communications technology companies that enhance connectivity across the entire data transmission spectrum. Through strategic acquisitions and organic research and development efforts, COMSovereign has become a U.S.-based communications provider able to provide 4G LTE Advanced and 5G-NR telecom solutions to network operators and enterprises. For more information about COMSovereign, please visit www.COMSovereign.com. (Source: PR Newswire)
14 Apr 21. Phantom Space Corporation Raises $5m In Seed Funding to Revolutionize Space Transportation. Through mass manufacturing space technologies, Phantom Space will send 100s of rockets into space starting in 2023.
Phantom Space Corporation, a space transportation technology development and manufacturing company, today announced it has raised $5m in seed investment funding to make space commerce commonplace and to lower the barriers to space access. The round was led by New York City based Chenel Capital, who specializes in growth equity investments.
Phantom is a startup working to democratize space by mass manufacturing small launch vehicles (rockets), satellites, and space propulsion systems. The company is developing core launch system technologies needed to transform the space transportation industry. Phantom is filling the unmet need to effectively access space and utilize on-orbit capabilities through modern mass manufacturing production, aiming to become the “Henry Ford of Space”. Other competitors in this space are capped at conducting several dozen launches per year where Phantom Space’s unique manufacturing methodology and globally distributed launch sites allows for hundreds of launches.
This latest round of funding will go towards expanding Phantom’s team of engineers, scientists, technicians and managers passionate about designing space transportation systems based on today’s requirements and today’s supply chain realities. Phantom’s current team consists of 26 space industry and technical experts with deep market knowledge and know-how not often found at a company at this stage of maturity. The company is ramping up quickly and is currently building its first launch vehicle development unit in preparation for stage level testing late this year. The first launch will be with Phantom’s Daytona rocket, which employs the first US produced oxidizer-rich stage combustion LOX/RP engines built by Ursa Major Technologies in Denver, Colorado. Phantom is currently building four launch vehicle development units, putting their current trajectory for their first orbital launch at Q1 2023.
“We are proud of our contrarian approach to building rockets and other space transportation technology,” says Jim Cantrell, CEO & Co-Founder of Phantom Space Corporation. “We want to be the Henry Ford of the space industry with mass production while others in this space are focused on vertically integrating their technology and supply chain. At Phantom, to achieve rapid time to market and enabling mass manufacturing, we are leveraging mature supply chains in addition to our own innovations. This allows us to get to orbit faster than ever thought possible.”
Additionally, Phantom recently acquired StratSpace, an Arizona-based company that develops space systems and flight hardware, leads space market forecasting, and represents space industry clients across the world. StratSpace has hosted 46 successful space missions and satellite programs since their inception and Phantom will be integrating these core technologies as part of its mission to transform the space transportation industry.
Phantom is currently focused on securing more launch sites over the next year. Furthermore, Phantom has confirmed that they are building an imaging satellite for a commercial customer who will be deploying this imagery in support of United States Department of Defense core missions. This is one of many government partnerships on Phantom’s radar for the near future in addition to a multitude of commercial projects.
“Phantom Space is among the best-positioned space startups to democratize access to space,” says Richard Chenel, Founder and Managing Partner at Chenel Capital. “Phantom has seen strong demand from both government and commercial partners and we’re thrilled with the opportunity to provide the lead in capital for this round that will support their growing pipeline of customers and launch sites” said Chenel.
For more information about Phantom Space Corporation and their development and manufacturing of space transportation technologies, please visit https://www.phantomspace.com/. (Source: PR Newswire)
14 Apr 21. Astranis Raises $250m From Top Growth Investors. With new funding Astranis will scale to meet global demand for affordable satellite broadband. Astranis, the company building the next generation of telecommunication satellites, today announced a $250m Series C financing round, valuing the company at $1.4bn.
The financing was led by funds managed by BlackRock, with significant participation from new investors Baillie Gifford, Fidelity Management & Research Company LLC, Koch Strategic Platforms, Monashee Investment Management, and Uncorrelated Ventures. Existing investors Andreessen Horowitz, Venrock, Fifty Years, ACE Early Stage Partners, Harpoon Ventures, Indicator Fund, Industry Ventures, Jaan Tallinn, Jeff Dean, Jerry Yang’s AME Cloud, Jude Gomila, Refactor Capital, Rising Tide Fund, SOMA Capital, and others also participated in the round.
Astranis is solving one of the largest challenges facing the modern world: reducing the cost of internet access to get the next four billion people online.
The new funding will be used to significantly expand production of Astranis’s unique microsatellite platform, built to satisfy the significant global demand for affordable broadband. Additionally, Astranis will dramatically accelerate new technology research and development to support its next-generation platforms. That includes the company’s proprietary software-defined radio technology, which increases satellite performance and flexibility, and allows manufacturing at scale, lowering the price point to end-consumers.
Astranis’s satellites can be deployed at a low cost and be built in months, not years. That’s in contrast to traditional satellites that require hundreds of millions of dollars of capital and five or more years to get new capacity online. The smaller size of Astranis’s satellites — just 350 kg, or about 20 times less than traditional satellites — and their deployment into geostationary orbit (GEO) allows Astranis to start providing coverage with just a single MicroGEO satellite and bring capacity online quickly, focusing beams of broadband connectivity right where it’s needed.
“We are solving one of the biggest problems facing the world today,” said Astranis co-founder and CEO John Gedmark. “Four billion people do not have reliable access to broadband internet. Getting connectivity to those who need it the most changes lives in a profound way. It empowers people to take control of their health, education, and economic situation. We’re talking about something that is now absolutely part of the base of the hierarchy of needs.” Astranis has projects in work around the globe to deploy satellites to bring connectivity to some of the world’s most underserved areas.
BofA Securities, Inc. acted as sole placement agent on this transaction.
About Astranis
Astranis is building small, low-cost telecommunications satellites to connect the four billion people who currently do not have access to the internet. Each spacecraft operates from geostationary orbit (GEO) with a next-generation design of only 350 kg, utilizing a proprietary software-defined radio payload. This unique digital payload technology allows frequency and coverage flexibility, as well as maximum use of valuable spectrum. By owning and operating its satellites and offering them to customers as a turnkey solution, Astranis is able to provide bandwidth-as-a-service and unlock previously unreachable markets. This allows Astranis to launch small, dedicated satellites for small and medium-sized countries, Fortune 500 companies, existing satellite operators, and other customers.
Astranis launched a first test satellite into orbit in 2018 and is now underway with its first commercial program—a satellite to provide broadband internet for Alaska that will more than triple the available bandwidth across the state. The satellite is undergoing assembly, integration, and test and is set for a launch later this year. (Source: BUSINESS WIRE)
13 Apr 21. Searchlight Capital Partners to Acquire Technical Airborne Components from TransDigm Group. Technical Airborne Components (“TAC”, “the Company”), a leading designer and manufacturer of rods and struts for the aerospace industry, announced that Searchlight Capital Partners (“Searchlight”), a leading global private investment firm, has entered into a definitive agreement to acquire the Company from TransDigm Group Incorporated (“TransDigm Group”) (NYSE: TDG).
TAC is one of the leading European players in the rods and struts market with a presence in commercial aircraft, regional and business jets, helicopters, as well as military and space programs. The Company benefits from long-standing relationships with key aircraft manufacturers including Airbus, Leonardo and Pilatus, among others, as well as differentiated design-to-build capabilities. This results in an attractive sole-source portfolio underpinned by long-term contracts, as well as exposure to growing platforms like the A320. TAC is based in Belgium (Liège), with approximately 170 employees.
Ralf Ackermann, Partner at Searchlight, commented: “We are delighted to be partnering with TAC and its management team and look forward to drawing upon our industry and operational expertise, as well as our transatlantic presence to accelerate its growth. This investment further demonstrates our belief in the long-term recovery of the Aerospace sector.”
Dirk Dhooge, President of TAC, commented: “This is an exciting opportunity for the entire TAC team, we look forward to working with Searchlight to expand our business and gain new opportunities. We believe that this transaction keeps TAC well-positioned for the impending Aerospace recovery.”
About Searchlight Capital Partners
Searchlight is a global private investment firm with over $9bn in assets under management and offices in New York, London and Toronto. Searchlight seeks to invest in businesses where its long-term capital and strategic support accelerate value creation for all stakeholders.
About TransDigm Group
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems. (Source: BUSINESS WIRE)
13 Apr 21. Aerospace Firms End State Solutions and Near Space Corp. Announce Joint Agreement. Certification and Flight Test Experts Bring Speed to Tightly Regulated Market. End State Solutions and Near Space Corp. (NSC) announced today an agreement to provide aerospace companies a single-source for a full suite of flight testing and Federal Aviation Authority (FAA) certification services. Unmanned, manned and optionally piloted aircraft developers can obtain speed-to-market through the leadership and experience the companies provide.
End State Solutions advances new aerospace technology through certification. NSC operates the FAA designated Tillamook Unmanned Aircraft System (UAS) Test Range which provides experienced safety planning, airspace deconfliction and complex test operations over diverse terrain. The combined services enable aircraft developers to focus on their product rather than the complexities of test and certification.
“Our agreement provides customers an efficient path to market entry,” said Charlton Evans, CEO of End State Solutions. He added, “when the certification strategy is worked in parallel with aircraft test and development, we all finish certification faster.”
The FAA requires aerospace companies to prove their safety through a non-prescriptive set of rules, regulations and data packages and will partner with them to work through a certification that results in a safe, reliable product.
“With our 25 plus years of operating UAS in the national airspace system, we have built a reputation with the FAA for safe operations with high complexity, and pioneered UAS flights in the NAS that we continue to build on,” said Kevin Tucker, president of NSC.
About End State Solutions
End State Solutions enables aerospace companies to achieve success through strategic regulatory planning, navigation through the FAA certification process and flight test programs. The consultants have decades of regulatory, engineering, operations, sustainment and entrepreneurial experience in the commercial and defense space. End State Solutions currently provides services for more than six UAS and urban air mobility clients who seek to enter the U.S. market through certified beyond visual line-of-sight drone operations. For more information visit us on LinkedIn.
About Near Space Corporation and the Tillamook UAS Test Range
NSC brings more than 26 years’ experience with coordinating and flying unmanned systems in the NAS. Flights have been planned, coordinated and completed for multiple agencies with certified and non-certified platforms, up to altitudes of 130,000 feet. This experience provides excellent support to customers, by supplementing engineering capability and adding the safety and test operations experience needed to conduct complex flight testing. The NSC team has significant experience and demonstrated capability with flying disciplined operations. They plan and review all missions, conducting evaluations of objectives and then building a safety plan as part of a Specific Operations Risk Assessment (SORA) process. NSC was selected as one of the FAA designated UAS Test Ranges in 2014, operating the Tillamook UAS Test Range as part of the Pan Pacific UAS Test Range Complex. (Source: PR Newswire)
14 Apr 21. Babcock set to rack up £1bn losses. 1,000 jobs will be axed in restructuring review. Babcock International is to plunge more than £1bn into the red after new management at the defence contractor ordered a drastic writedown in the value of the company and the profitability of its contracts. The company is also making 1,000 redundancies, mainly in middle management, 850 of them in the UK.
In an unscheduled statement a few weeks before a planned update on a review of the business, Babcock said it had “identified impairments and charges totalling approximately £1.7bn”.
Of that sum, £1bn will come from write-offs in goodwill — effectively correcting an over-valuation — on the £3bn worth of acquisitions that it has made over the past decade. That will come on top of 2020 profits from operations falling more than 40 per cent to £307m.
Babcock is a Ministry of Defence contractor, operating the Devonport naval dockyard at Plymouth and building Royal Navy warships at its Rosyth yard near Edinburgh. It is also a key part of the supply chain building the country’s new generation of nuclear submarines. It undertakes engineering support and flight training for the Royal Air Force, trains engineers and performs maintenance for the army, and also operates search and rescue helicopters in the UK and Europe.
The majority of its £4.7bn annual income comes from the British taxpayer. It has a workforce of 34,000.
The present structure of the group is the result of a takeover spree by its late chief executive Peter Rogers, who successively spent £350m acquiring Devonport, £1.3bn on VT Group, formerly known as Vosper Thornycroft, and £1.6bn on Avincis, the old Bond helicopters group.
The review of the group was ordered after a changing of the guard at the company last year with the departure of its chief executive Archie Bethel and his finance director Franco Martinelli. They were replaced by David Lockwood and David Mellors, who had become available after their previous employer, the aerospace company Cobham, was taken over.
The news that the new management has a plan, that future profits are expected to drop by only £30m a year and that with access to £1.2bn in cash it will not have to tap shareholders for a refinancing bailout, prompted a surge in the shares. They peaked at £13 in 2014 but three years ago the group fell out of the FTSE 100. In January, as investors began to waver, the shares fell below 200p, a 15-year low, valuing the company on the stock market at less than £1bn. The stock closed up 32 per cent, or 77½p, at 319½p last night.
Announcing the review in January, Lockwood had indicated that he did not expect to report back until the May publication of Babcock’s annual results. However, those results are likely to be delayed because of the volume of accounting work needed on the writedowns and write-offs and because the company effectively has two auditors at present as Deloitte prepares to take over from PWC. “The early results from our reviews show significant write-offs and a smaller ongoing reduction in the profitability of the group,” Lockwood said.
He highlighted the poor performance of the Avincis acquisition. “It has not delivered shareholder value with low returns on high amounts of invested capital,” he said. He has already ordered the sale of its business that flies staff to offshore oil rigs on helicopters. He added that he was reviewing all of its aerial emergency rescue services.
Lockwood’s review indicates a clear-out of other peripheral businesses across the energy, nuclear, construction and rail sectors, and other legacy contracts such as maintaining the Metropolitan Police’s fleet of vehicles. Babcock said that it would “focus on being an international aerospace, defence and security company with a leading naval business”. That will lead to £400m of disposals.
In an implied criticism of previous management, he said: “We are changing our operating model to simplify the business . . . to be a better place to work, a better partner to our customers.”
Lockwood said that the company he inherited had 16 layers of management, and no group human resources nor standard terms of employment. The clear out of middle management will cost £40m — an average of £40,000 per head in redundancy payouts — and is expected to create annual savings of £40m. (Source: The Times)
14 Apr 21. Man with a plan for urgent repair job. David Lockwood insists Babcock International was not “broken” when he joined as chief executive in September and that he has “never read” the brutal research on the defence group by the mysterious Boatman Capital, which warned more than two years ago that Babcock had “terrible” relations with the Ministry of Defence and faced “potentially massive exceptional costs”.
Yet despite Lockwood’s comments, his new strategy rather suggests that Babcock was a broken company and that Boatman’s
hit-job, while inaccurate in some places, hit the spot in others. Take a look at the measures laid out by Lockwood yesterday — £1.7bn of impairments, which is larger than the company’s market capitalisation, even if they are mostly non-cash charges, 1,000 job cuts, and £400m of disposals. Lockwood also set out “key enablers” which he said the company will need to “execute our strategy”. These include “a new operating model, a new culture and people strategy, an innovation strategy and a stronger balance sheet”. Sounds like Babcock was broken to me. “When I was at Cobham we thought we should be more frightened of Babcock than we were,” Lockwood said. Ouch.
Some of the things Lockwood plans to do are remarkably simple. He will introduce a group HR function to help ensure that the company’s talent is deployed in the most effective places. He is also getting rid of supply chain financing — which apparently didn’t include Greensill, before you ask — which Lockwood admits was more expensive than conventional borrowing. The new Babcock boss said that it was a “waste of energy” looking to the past and would not apportion any blame for what he found at the company, but this does not reflect well on the former chairman Mike Turner and chief executive Archie Bethel.
Babcock is a big supplier to the MoD so it is in the UK’s interests that Lockwood succeeds. Shareholders clearly liked what they heard, sending the shares up 32 per cent as Lockwood ruled out an equity raise unless something goes seriously wrong. Boatman, whose identity is still unknown (to some! Ed), also couldn’t resist a comment after two years of silence on Twitter. “We did warn you this company had problems,” it said. (Source: The Times)
13 Apr 21. Babcock Gives Business Update and Announces Large Write Off. Babcock International Group PLC (“Babcock” or “the Group”) issues the following update for the financial year ending 31 March 2021 (FY21) including an update on reviews currently taking place and our headline unaudited results. This announcement is being made ahead of the Group’s Preliminary Results announcement to provide some early transparency on key issues.
Key points
Note: these are subject to the finalisation of our reviews and the year end audit
- Babcock will focus on being an international aerospace, defence and security company with a leading naval business and providing value add services across the UK, France, Canada, Australia and South Africa
- The contract profitability and balance sheet review (“CPBS”) has identified impairments and charges totalling approximately £1.7bn
- The vast majority of the impact of the CPBS is one-off in nature and non-cash affecting
- The CPBS is expected to result in an ongoing reduction in Group underlying operating profit of approximately £30m each year
- We are changing our operating model to simplify the business and reduce layers. The consequential restructuring will have a one off cash cost of approximately £40m and is expected to deliver realisable annualised savings of approximately £40m. The benefit in FY22 will be roughly half this due to timing
- We will rationalise the Group’s portfolio by divesting certain businesses. We anticipate this will generate proceeds of at least £400m over the next twelve months
- Draft unaudited management results show FY21 underlying revenue of £4,690m (FY20: £4,872m) with underlying operating profit of £307m (FY20: £524m) before CPBS impacts. These results include our share of joint ventures and associates (note 1)
- Net debt (excluding lease obligations) at 31 March 2021 was £750m, with an estimated net debt to EBITDA ratio of 2.5 times
- We have confidence that the markets we address and our capabilities to address those markets will be favourable in the medium term. However, we will be revising our forecasts for profitability for future periods as we continue to assess the business. We are cautious about progress in FY22 profitability as it will be a year of transition
- We aim to return Babcock to strength without the need for an equity issue
We will set out further details of the above at our Preliminary Results, the publication of which is likely to be delayed as a result of COVID-19 working constraints and the large number of potential adjustments under consideration in our CPBS. We will prioritise quality of reporting over speed.
David Lockwood, CEO said, “We announced a series of reviews in January and promised to report back on our strategic direction, a new operating model and a new financial baseline at our full year results. Today we give you an update on all of these areas. The early results from our reviews show significant write offs and a smaller ongoing reduction in the profitability of the Group. Through self-help actions, we aim to return Babcock to strength without the need for an equity issue. We are creating a more effective and efficient company through our new operating model and, in line with our new strategic direction, will rationalise the Group’s portfolio to help strengthen our balance sheet. Through our new operating model, the future Babcock will be a better place to work, a better partner to our customers and will be well placed to capture the many opportunities ahead of us”.
The person responsible for arranging the release of this announcement on behalf of the company is Jack Borrett as Company Secretary.
Introduction
As previously communicated, we are currently undertaking a series of reviews of the Group, including refreshing our strategy and reviewing our contract profitability and balance sheet. We are also taking actions to improve the efficiency and financial strength of the Group including a programme of disposals and changes to our operating model. While this work is ongoing and not yet finalised, the initial headlines are being shared today to give early transparency.
1) Strategy review
The strategy review we announced in November 2020 is now well advanced and so, while work continues, we can share the highlights today:
- Our UK defence businesses operate in an attractive market and have strong competitive advantages
- Our Marine business has a range of platforms, systems and products that are highly competitive in international markets
- We expect to play a crucial role as a strategic partner to the UK Government across key defence programmes including the Government’s 2030 vision for UK shipbuilding
- Our international defence businesses have strong niche positions that will be further developed. We will focus on France, Canada and Australia
- The other markets we operate in vary in their attractiveness, ranging from the long term opportunities of the civil nuclear market and a strong business in South Africa through to areas outside the core of what Babcock offers, for example civil training
- The Avincis acquisition in 2014 has not delivered shareholder value with low returns on high amounts of invested capital. We are selling our oil and gas aviation business and we are reviewing our options for the each of the aerial emergency services businesses
- A number of key enablers will be needed to execute our strategy including a new operating model, a new culture and people strategy, an innovation strategy and a stronger balance sheet supported by our disposal programme
We will give more details of our new strategy alongside our Preliminary Results.
2) Results for the 2021 financial year (before adjustments from CPBS)
We set out the headline financial performance for the year ending 31 March 2021 based on our draft management accounts. This information is subject to detailed reviews by management and external audit and is before the impacts of our contract profitability and balance sheet review.
In summary, based on our previous format of underlying reporting (see note 1):
- Underlying revenue was £4,690m (FY20: £4,872m), down 2% on last year excluding disposals and FX
- Underlying operating profit was £307m (FY20: £524m), down 36% excluding disposals and FX
- Net debt (excluding lease obligations) at 31 March 2021 was £750m. This position benefited from a VAT timing benefit of £56m, corporation tax repayments of £67m and around £20m of FX translation benefit
- Average net debt (excluding lease obligations) over the year was around £1.2bn
Balance sheet
Based on draft management accounts and the early view of the recurring impact of the CPBS, the Group’s net debt to EBITDA ratio at 31 March 2021 was 2.5 times. This is the measure used in the covenant in our revolving credit facility (RCF) and makes a number of adjustments from reported net debt and EBITDA.
Our net debt now includes balances related to the use of supply chain financing in the Group with extended credit terms. Such amounts were previously reported in trade payables. At 31 March 2021 the amount included was £25m, lower than the level last year. We are phasing out the use of supply chain financing across our Group.
In addition to supply chain financing, the Group factors certain receivables in Southern Europe. These are non-recourse to the Group and so are not included in net debt. For reference, the level of receivables factoring at 31 March 2021 was £102m (31 March 2020: £98m).
At 31 March 2021, the Group’s cash balance was £533m. This combined with the undrawn element of our RCF gave us liquidity headroom of around £1.2bn. We repaid the US Private Placement of $500m, which was hedged at £307m, in March 2021. This was funded from existing Group cash resources.
We are commencing discussions with our banks to secure protection to the potential downside risks in our scenario planning.
Capital structure We believe that a strong balance sheet provides resilience to the Group as well as operational and strategic advantages. After the completion of our various reviews, we will determine the appropriate capital structure for the Group which we believe we can achieve within the next 24 – 36 months.
Our plans outlined in this update, including the changes to our operating model and our disposal programme, are part of our aim to return Babcock to strength without the need for an equity issue.
Dividend
As part of our focus on building a strong balance sheet, the Board will not be recommending a dividend for FY21 or FY22.
Outlook
We have confidence that the markets we address and our capabilities to address those markets will be favourable in the medium term. However, we will be revising our forecasts for profitability for future periods as we continue to assess the business. We are cautious about progress in FY22 profitability as it will be a year of transition and also given the ongoing uncertainty of when COVID-19 restrictions will be lifted in our markets.
3) Contract profitability and balance sheet review (“CPBS”)
As announced in January, we have been performing a detailed review of our contract profitability and balance sheet. This review is looking at a sample of approximately 100 contracts, representing around £2.6bn of revenue each year across all four sectors. The selected contracts received differing levels of review depending on their perceived risk. We have also performed a review of the balance sheet covering all of the balance sheet captions. Again, these reviews were performed on a risk basis across all four sectors.
While the work is not yet complete and is subject to further review by our Audit Committee, our Board and our auditors prior to the publication of audited results for the year, the early conclusions indicate a material impact on the Group’s financial statements. This update is accordingly being provided to provide early transparency on key areas with the caveat that the finalisation of the exercise well may change the results set out below.
The impacts of the CPBS on our financial results may be categorised into two types:
- One-off write offs and provisions – the large majority of adjustments totalling c.£1.7bn are one-off in nature. The technical accounting analysis has not been finalised and therefore the allocation of the adjustments between exceptional items, underlying profit and prior year adjustments is not yet decided
- Recurring income statement impacts – these items will reduce underlying operating profit in both FY21 and future years. The early estimate of this impact is approximately £30m per annum for future periods and approximately £20m for FY21
There are over 100 potential adjustments identified within the review. A summary of these by balance sheet caption is as follows:
Impairment of goodwill and acquired intangibles of approximately £1bn. Despite the fact that we have not finalised our ongoing budgets and forecasts, our current analysis indicates an impairment of the goodwill for the Land and Aviation sectors relating to a decrease in our forecasts for future cash generation and changes in our impairment test methodology.
Impairment of property, plant and equipment (PPE) and right of use assets of approximately £300m. These adjustments primarily relate to fleet valuation – where certain aircraft carrying values are no longer expected to be recovered through use or sale – and the standardisation of our accounting policies covering aircraft maintenance and airframe parts and rotables.
Other non-current assets will be impacted by approximately £100m relating to lower deferred tax assets, the impairment and amortisation of some intangible assets (e.g. software) and the revision of investment balances in joint ventures and associates.
Adjustments to current assets of approximately £250m following the assessment of certain contract profitability margins, the recoverability of trade and other receivables, an increase in obsolescence provisions for inventory, and a reassessment of certain contract mobilisation costs.
Current liabilities will increase by approximately £50m including the reassessment of aircraft maintenance accruals, contract liabilities and environmental provisions.
4) Operating model
We are changing our operating model to create a business that is more efficient and effective. We are reducing layers of management within the business to form a simpler, flatter structure that will simplify how we operate, improve line of sight, shorten communication lines and therefore increase business flexibility and our responsiveness to market conditions. This will reinforce a one company culture and remove the duplication and lower quality delivery that a siloed approach delivered. This, unfortunately, will result in headcount reductions. We are also reducing the Group’s property portfolio, especially in the UK.
The changes will result in approximately 1,000 employees leaving the Group within the next twelve months with an approximate restructuring cost of £40m, most of which are cash costs.
This will reduce our overall operating cost base. Some of the savings will be recognised across long term projects, for example where they form part of existing contract efficiency assumptions, and some savings will benefit our customers via the contract structure.
As such, the expected realisable annualised savings are approximately £40m. The benefit in FY22 will be roughly half this due to timing.
5) Portfolio rationalisation
One of the strands of our strategic review is to consider which businesses Babcock is the best owner of and on which we could earn a sufficient return on capital. We will be looking to rationalise the portfolio to reduce complexity, increase focus and increase the effective use of the Group’s capital by disposing of the businesses that are nearer the perimeter of our strategy.
We are targeting net proceeds of at least £400m over the next twelve months from these disposals. Several businesses are currently being reviewed as disposal candidates and three processes are currently underway to test the market.
Additionally, as announced on 11 March 2021, we have agreed the conditional sale of our oil and gas aviation business. This deal is expected to complete in the second calendar quarter of 2021 subject to the satisfaction of the relevant third party conditions.
Notes
Note 1: presentation of financial results
We will change the way we report our results for FY21 onwards. The Preliminary Results will show this new approach along with restatements for the prior year and a full reconciliation from the old to the new approach.
We will be updating the definition and presentation of underlying results to align more closely to statutory measures. This will include changing how we show the results of joint ventures in our underlying numbers, moving to including one line in the income statement relating to Babcock’s share of joint ventures’ and associates’ profit after tax. This will align our underlying revenue with the statutory IFRS measure. Our underlying operating profit will be consistent with the IFRS measure except for the exclusion of certain defined specific adjusting items.
We will also be simplifying the method of presenting our cash flow.
The numbers cited in this release are under the previous reporting format.
BATTLESPACE Comment: Whilst not actually stating which disposals will be made, it is likely that Babcock Land Defence Ltd (formerly DSG), will be amongst the candidates, as we have bene predicting for some time along with the write off of the inflated £140m purchase price. Babcock were hit badly by the US Boatman Report which rightly forecast the situation announced today and the accompanying devastating drop in the share price. David Lockwood was parachuted in after the departure of the former CEO, Archie Bethel and CFO. Will he pull off a restructuring, or like Laird and Cobham, previous patients, will the result be a breakup of Babcock with BAE and KBR sharing the spoils or a merger with SERCO? Watch this space!
13 Apr 21. What’s Up in Defense: Investment Outlays +7.4% in Mar; +10.0% Rolling 3 Months. USA Aerospace & Defense Electronics. Monthly DoD investment outlays rose 7.4% y-o-y in March to $26.8bn, with procurement down 7.1% y-o-y vs an increase of 26.6% for R&D. Over the past three months R&D advanced 16.1%, vs a 5.8% increase for procurement, leading to a 10.0% increase in investment outlays. Investment spending lagged the budget by $12BB, or 5%, in FY20, which should support incremental growth in FY21 with a flattening budget.
Insights
Investment Outlays Grew 7.4% in March, Driven by R&D. Investment outlays are up 10.0% for the trailing three months. Outlays continue to be lumpy with the trailing three months increase supported by accelerated progress payments and prior year’s budget growth. The sixth month of the new FY has returned to M-HSD growth with a 7.4% y-o-y increase following the 11.9% decline in February. This compares to FY20 growth of 11.7%, which was led by R&D, up 11.9%, with an 11.5% rise for procurement. In March, the 26.6% increase in R&D was driven by the Army up 127.4%, while Defense Wide was down 1.8%. Procurement was down 7.1% y-o-y due to a 29.4% drop in Air Force outlays with Army up 23.3%.
Tracking Outlays vs Appropriations – Six Month Outlays 49% of FY21 Funding. Ex. 4 highlights recent investment outlays relative to Appropriations. Over FY19 and FY20, there was a $43bn lag. For FY20, investment outlays of $239BB compared to the enacted budget authority of $251BB. This points to outlays lagging authority by 5%, which supports a longer tail to growth as Appropriations are spent. Given the FY21 budget passed with $250bn in investment funding, this could be an incremental 4 pts of annual growth. Outlays in the first six months of the fiscal year of $122.4bn are 49% of the FY21 budget.
Defense Budget What’s Next? On December 27, President Trump signed a $2.3trn spending package that included a $900bn Coronavirus relief package. The bill included $688BB for defense in FY21 (Sept.), flat with FY20 spending levels. Both Procurement and R&D were plussed up, advancing 2% and 2.6% vs FY20 spending levels. The signing of the bill funds FY21. There is more uncertainty around the FY22 budget, which starts October 1st, given the change in Administration. The release of the Skinny budget on April 9th provided some indication, with defense spending proposed up 1.7% in FY22 vs. enacted levels in FY21. The full budget could be released in late May, providing additional detail. Nonetheless the delay from a typical February-March release likely pushes the mark-up process for FY22, with the fiscal year likely to start under a CR. There is likely to be disagreement in Congress with some urging from HASC Republicans to support 3-5% spending growth, while Progressive Democrats favor cuts.
The Near-Term Outlook Likely Faces Pressure. Deficits driven by COVID-19-related stimulus will likely curtail spending growth. A baseline defense budget for FY22 is up slightly with FY23+ providing a better indication of priorities. The release of the full FY22 budget will likely provide a better indication of the intermediate term outlook. We expect a MSD decline in aggregate over the next several years. (Source: Jefferies)
12 Apr 21. Babcock review boosts shares despite 1.7bn pound charge.
* Aims to avoid equity raising
* Shares jump as much as 34%
* To hold off on dividends
* Expects to shed 1,000 jobs (Adds analyst, shares, background)
Babcock on Tuesday warned of 1.7bn pounds ($2.34bn) in charges after a review of its business but shares in the British engineering firm jumped 30% on relief that its recovery was not expected to include a cash call.
“Through self-help actions, we aim to return Babcock to strength without the need for an equity issue,” recently appointed CEO David Lockwood said.
The 150-year-old company said it would aim to raise at least 400m pounds from divestitures over the next 12 months.
The mid-cap company, which has contracts in the aerospace, defence and civil nuclear sectors, brought in Lockwood as CEO and a new finance chief last year to navigate through the pandemic.
It said it plans to take a 40 m pound restructuring charge, mostly over the next 12 months, and expects about 1,000 of its approximately 35,000 staff to leave the group.
JP Morgan analysts in a note called Babcock’s update “far more benign than many expected” and upgraded their rating on the company to “overweight” from “neutral”.
The shares jumped as much as 34% in early trade and stood up 25% higher at 3 pounds by 0714 GMT, recouping some of the losses they suffered in January when Babcock began its review of the profitability of its contracts.
Babcock, whose biggest customer is Britain’s Ministry of Defence, said it would not recommend a dividend for 2021 and 2022, adding that the review would lower its underlying operating profit by about 30m pounds each year.
“We are cautious about progress in FY22 profitability as it will be a year of transition and also given the ongoing uncertainty of when COVID-19 restrictions will be lifted in our markets,” Babcock said.
Excluding the impact from the review, underlying revenue for the year to March 31 was 4.69bn pounds, down from 4.87bn a year earlier, while underlying operating profit fell 41% to 307m pounds. (Source: Google/Reuters)
12 Apr 21. Teledyne Schedules Meeting Date for the FLIR Acquisition, Clears Poland and South Korea Antitrust Reviews. Teledyne Technologies Incorporated (NYSE:TDY) announced today that the U.S. Securities and Exchange Commission has declared effective the Form S-4 Registration Statement concerning the pending acquisition of FLIR Systems, Inc. (NASDAQ:FLIR). Both Teledyne and FLIR have scheduled special meetings for each company’s respective stockholders to approve matters related to the acquisition on May 13, 2021. Teledyne also announced today that it received antitrust clearance for the pending acquisition from regulatory authorities in Poland and South Korea.
On Wednesday, April 7, 2021, Teledyne received a consent letter regarding the proposed acquisition from the President of the Office of Competition and Consumer Protection of Poland. Today, Teledyne received an unconditional clearance letter from the Korea Fair Trade Commission.
Previously, Teledyne received a clearance letter from the Federal Cartel Office of Germany on April 1, 2021. On March 31, 2021, Teledyne received a No-Action Letter regarding the proposed acquisition from the Competition Bureau of the Government of Canada. Teledyne obtained antitrust clearance in the U.S. on March 1, 2021, when termination of the waiting period under the Hart-Scott-Rodino (“HSR”) Antitrust Improvements Act of 1976 occurred. Subject to the receipt of additional required regulatory approvals in Turkey and China, the transaction is expected to close in the second quarter of 2021.
In addition, all permanent financing for the pending acquisition was completed on March 22, 2021. Financing consisted of $3.00bn of investment-grade bonds due 2023 through 2031, as well as a $1.00bn Term Loan Credit Agreement and an Amended and Restated Credit Agreement with capacity of $1.15bn both maturing in 2026. (Source: BUSINESS WIRE)
12 Apr 21. Mike Lynch fraud case casts a shadow over £3bn Darktrace float plan. The cybersecurity provider Darktrace has warned that the fraud allegations against its founding shareholder, the former Autonomy chief executive Mike Lynch, threaten its prospects as it gears up for a £3bn stock market debut.
In documents published as part of the formal process that must be followed before a London float, Darktrace admitted that the criminal and civil charges against Dr Lynch “could result in a material adverse effect” on its business and prospects.
The 55-year-old is awaiting judgement in a $5bn (£3.6bn) High Court fraud claim brought by Hewlett-Packard after its takeover of Autonomy.
The calamitous 2011 deal triggered an $8.8bn writedown and allegations of false accounting against Dr Lynch. The 55-year-old is also fighting extradition to the US on fraud charges. In both cases he has denied any wrongdoing.
In 2013, Dr Lynch’s venture fund Invoke Capital became the founding investor in Darktrace, which is targeting a lucrative stock market debut next month. It uses a software technique called machine learning to defend corporate and government networks from cyber attacks.
But it warned that “significant damage” to its reputation may be caused by Dr Lynch’s legal fights.
Darktrace told potential investors that negative publicity associating it with Dr Lynch or Autonomy “could adversely affect the group’s reputation in the cyber security, financial, investment and other communities, and could also adversely affect the group’s future share price”.
It added that its share price could be undermined if Dr Lynch is forced to sell his 5.1pc stake by a judgement against him. His wife Angela Barcares owns a further 13.4pc of Darktrace, giving them a combined holding worth £555m if the company achieves a forecast valuation of £3bn.
Darktrace also said there was a risk it could face money laundering charges arising from the US prosecutions of Dr Lynch and Autonomy’s former finance chief Sushovan Hussain, who was convicted and imprisoned on fraud charges in 2018.
Darktrace said an indictment against Dr Lynch in 2019 may have accused him of making payments to Hussain via the company and that it had received subpoenas from prosecutors. Hussain retains a 2.8pc stake in the company.
“There remains a risk that the group could be charged with offences,” it said. “Having analysed and considered the relevant circumstances, the directors believe this risk to be low.”
Poppy Gustaffson, Darktrace’s chief executive, told The Telegraph that the involvement of Dr Lynch in Darktrace was “not a concern” and despite the disclosures in its regulated filings “we’re not worried about any impact on the business”.
She said: “Mike is a visionary technologist and was an early investor in Darktrace but he isn’t involved in the day-to-day running of the company.”
Darktrace’s float is expected to test the London market’s appetite for technology stocks after the disastrous Deliveroo’s disastrous debut last month.
Ms Gustafsson, a 38-year-old co-founder of Darktrace, rejected comparisons with the takeaway app. She argued that it lacked Darktrace’s status as a “fundamental technology company” that is able to replicate its service for many customers at little extra cost.
The company, which has more than 1,400 staff, said its revenues rose 45pc in 2020 to $199m. It generated a pre-tax loss of $27m, down from $38m for the previous year.
Analysts and investors said they did not believe that Deliveroo’s valuation had affected Darktrace’s float plans.
James Wise, a partner at Balderton Capital, which has a stake in Darktrace said it “could have chosen to list anywhere, and decided to list on the FTSE as they feel it is the best place in the long run for the company, so any recent volatility won’t have concerned them”.
Richard Windsor, an independent analyst, said Darktrace would have had difficulty floating in the US “because of the issue surrounding Mike Lynch and the USA’s desire to extradite him”. Ms Gustafsson said: “London just felt like the logical place for us.”
Invoke Capital has maintained links to Darktrace including sharing some staff and office space. Darktrace said it had been preparing for a “full separation” from the fund, which it paid $3m for management services last year. (Source: Daily Telegraph)
12 Apr 21. Shake-up at Airbus as defence and technology chiefs quit. Airbus on Monday announced the biggest shake-up in its top ranks since Chief Executive Guillaume Faury took the helm two years ago, sparked by the departure of two key executives.
The French CEO said the shake-up, reducing its executive committee in size and doing away with the split ownership of technical resources dating back to a former structure driven by European politics, would lead to greater internal cohesion.
Dirk Hoke, head of the Defence & Space division, and Chief Technology Office Grazia Vittadini will both step down on July 1, the company said in a statement.
Hoke, who has been leading efforts to co-develop a European fighter with France’s Dassault Aviation, will be replaced in the top defence spot by production chief Michael Schoellhorn, whose role as chief operating officer will be filled by military aircraft boss Alberto Gutierrez.
Hoke and Vittadini are both leaving to pursue opportunities outside the aerospace group, Airbus said without elaborating.
The move comes days after Airbus and Dassault Aviation reached a critical deal after weeks of tense discussions over the share of work on the Future Combat Air System – a Franco-German-Spanish fighter project.
The deal still faces political uncertainty in a German election year and national differences over technology rights, but is seen as a milestone for Europe’s largest defence project.
One person familiar with the matter said Hoke, an ex-autos executive once seen as a potential CEO, had been in discussions over his departure for some months. Faury’s three-year term expires next year but there are no indications that he plans to step down, having steered Airbus through the COVID-19 pandemic.
TECHNOLOGY STREAMLINED
Airbus is also merging technology and engineering as a result of a cascade of changes resulting from the departures, putting long-term and current research under one roof.
The military aircraft unit will be run by Jean-Brice Dumont, whose current job as head of engineering will be merged with Vittadini’s technology role under a single new engineering boss, Sabine Klauke, who moves from defence to the wider role.
Previously, engineering functions had been split between two positions on the top management committee in a throwback to a disjointed structure abandoned in 2013, leading to what several sources described as turf battles over resources.
Airbus – once a notorious battleground for Franco-German political and economic divisions – said the shake-up would lead to deeper co-operation between its various activities.
Although passports no longer dictate hiring policy, the shake-up remains carefully balanced, with one fewer French seat on the top committee but France awarded greater visibility over the Airbus portion of FCAS. Airbus is officially linked with Germany and Spain on FCAS, while Dassault represents France. (Source: Reuters)
12 Apr 21. Oman establishes military pension fund. Oman’s ruler, Sultan Haitham bin Tariq al-Said, issued a royal decree on 7 April creating a separate pension fund for the country’s armed forces and security services.
Under article two of decree 33/2021, the Military and Security Services Retirement Fund has been established, which will “enjoy financial and administrative independence and report to the Council of Ministers. Its system (bylaw) shall be issued under Royal Decree.”
A separate fund for other branches of the civil service and state-owned entities has also been created, known as the “Social Security Fund”. The establishment of the two funds will consolidate a multitude of other retirement funds across Oman’s military, security, and civil service organisations.
The plan to centralise pension funds was first revealed in the country’s 2021 budget. Released in January, the budget stated that the creation of two funds would be undertaken this year “in line with the government’s efforts to achieve efficiency and financial sustainability for pension funds, and to overcome challenges faced by these funds”. (Source: Jane’s)
09 Apr 21. Pure Capital Solutions Announces Acquisition, New Funding, And Focus On Space Economy. Nova Space Inc., a Space Economy Professional Development Provider, to Become Publicly Traded Through Merger with Pure Capital Solutions. Pure Capital Solutions (OTC Ticker symbol: PCST) a Utah corporation, announced the acquisition of Nova Corps, LLC, a Minnesota limited liability company through a merger with PCST in exchange for the issuance of 87,779,000 shares of restricted common stock. The shares issued will represent 80% of the issued and outstanding shares of PCST, with Nova Corps becoming a wholly owned subsidiary of PCST under the new name Nova Space – a Wyoming Incorporation (Nova Space).
PCST latest move combines a highly experienced management team and world class subject matter experts with the acquisition of Nova Corps. Under the new banner of Nova Space Inc, the organization is set to develop extraordinary digital offerings for Space Operations and Astronautics training, education, and professional development. The new management team will be led by CEO/President Joseph Horvath and COO/Vice-President Christopher Allen.
The Space industry is experiencing rapid growth, investment, and technological change. One of the keys to helping this industry reach new milestones is providing a standardization of knowledge through better training and professional development. By supporting and enabling the growth of the performers, rather than just technologies, the industry will improve communication, performance, and business outcomes, said Joseph Horvath, President and CEO.
The space economy is quickly providing immense opportunities for career growth, wealth creation, and participation in meaningful human endeavors. There are hundreds of thousands of people willing to participate today, who need development opportunities to achieve confidence and competence in the space industries best practices. By leveraging the best in adult learning design, digital learning experiences have the power to rapidly install durable new skills and competencies for individuals and organization at scale, said Christopher Allen, Vice President and COO.
As a result of this transaction, Todd Marshall and Daren Wright of PCST resigned from their positions as officers and directors of the Company. Tyler Rainey will remain with the Company in the role of Secretary. (Source: PR Newswire)
08 Apr 21. ORBCOMM To Be Acquired By GI Partners. ORBCOMM Inc. (Nasdaq: ORBC) has entered into a definitive agreement to be acquired by GI Partners in an all-cash transaction that values ORBCOMM at approximately $1.1bn, including net debt. Under the terms of the agreement, ORBCOMM stockholders will receive $11.50 in cash per outstanding share of common stock upon closing of the transaction, representing a premium of approximately 52% to ORBCOMM’s closing share price on April 7th and a 50% premium over the 90-day volume-weighted average share price through that date.
The investment by GI Partners will support ORBCOMM’s strong momentum in the industrial IoT as it increases its investment in sales, marketing and technology innovation to accelerate growth, execute on its long-term strategic plan and global market expansion, and provide added flexibility as a privately-held company.
“This transaction will provide immediate and substantial value to ORBCOMM stockholders, reflecting the tremendous commitment and work of our employees and stakeholders. The partnership with GI Partners will provide us the opportunity to rapidly advance our long-term strategy,” said Marc Eisenberg, ORBCOMM’s Chief Executive Officer. “GI Partners has an established track record of working with companies to accelerate growth, and we look forward to continuing to drive innovation, providing world-class service to our global customers and expanding our market share in the industrial IoT as a privately held company.”
“ORBCOMM has a long history of innovation, providing mission-critical services to customers across the global logistics landscape and a broad range of other industries,” said Mark Prybutok, Managing Director of GI Partners. “We are excited to work with the ORBCOMM team to take the business forward as IoT use cases continue to evolve and grow.”
ORBCOMM’s Board of Directors has unanimously approved the transaction and recommends that ORBCOMM’s stockholders vote in favor of the transaction at the special meeting of ORBCOMM stockholders to be called in connection with the transaction. A special meeting of ORBCOMM’s stockholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission (SEC) and subsequent mailing to its stockholders.
The transaction is expected to close following the satisfaction of customary closing conditions, including approval by ORBCOMM stockholders and the receipt of required regulatory approvals.
The parties expect the transaction to close in the second half of 2021. Subject to and upon completion of the transaction, ORBCOMM will become a privately-held company and its common stock will no longer be listed on the Nasdaq Stock Market.
PJT Partners and Raymond James are acting as financial advisors to ORBCOMM, and Milbank LLP is acting as legal counsel. Evercore is acting as financial advisor to GI Partners, and Simpson Thacher & Bartlett LLP and Morgan, Lewis & Bockius LLP are acting as legal counsel. (Source: Satnews)
12 Apr 21. Cyber security group Darktrace plans to float in London. Cambridge-based company says it is targeting a market worth $40bn a year. Poppy Gustafsson: IPO would signal a ‘historic day for the UK’s thriving technology sector.’ Cyber security company Darktrace plans to float in London in a vote of confidence for the exchange weeks after the listing of fellow start-up Deliveroo hit problems on its first day of trading. Darktrace, which was founded in 2013, said on Monday that it planned an initial public offering on the London Stock Exchange’s main market in what chief executive Poppy Gustafsson said would be “a historic day for the UK’s thriving technology sector”. The company uses artificial intelligence to detect and respond to cyber threats. It generated revenue of almost $200m in its latest financial year but estimates that it is going after a market worth $40bn a year. It is also profitable on earnings before interest, tax, depreciation and amortisation, with ebitda of $9m in its latest financial year. “Developed by our talented software engineering teams in Cambridge, our artificial intelligence was the first on the market to be deployed at scale in the enterprise,” said Gustafsson. “Today [it] is responsible for protecting over 4,700 organisations worldwide from the most sophisticated cyber threats.” There have been fears for the future of tech IPOs in London after shares in Deliveroo, the food delivery company, fell by almost a third on their first day of trading at the end of last month. After falling by another 10 per cent on Friday, Deliveroo shares were trading up by almost 3 per cent on Monday morning. While it has chosen to list in London, North America is Darktrace’s largest market and, according to Monday’s filing, its greatest source of growth. Darktrace’s revenue grew at 39 per cent during the six months ending in December, the first half of its financial year, to $126.5m, compared to 45 per cent growth in the last full year. But pre-tax losses more than doubled to $47.9m in the first half the current fiscal year, primarily due to a jump in financing costs. Operating losses narrowed from $21.5m to $4.9m in the same period. Jefferies, Berenberg and KKR Capital Markets are joint global co-ordinators for the float while Needham and Piper Sandler will act as additional joint bookrunners. Future of W(Source: FT.com)
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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.
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