Sponsored by TCI International Inc.
15 Jul 21. CAE to invest C$1bn in innovation over five years to develop the aviation technologies of the future.
- Positioning CAE as a leader in Advanced Air Mobility (air taxis) and green light aircraft technologies
- Creating digitally immersive solutions using data ecosystems and artificial intelligence
(NYSE: CAE) (TSX: CAE) – CAE today announced that it will be investing C$1bn over the next five years in innovation. The investment will fund Project Resilience, a transformation project to develop the technologies of tomorrow, including digitally immersive solutions using data ecosystems and artificial intelligence in civil aviation, defence & security and healthcare. The project will also allow CAE to position itself as a leader in end-to-end technology, operational support and training solutions for Advanced Air Mobility, as well as develop green light aircraft technologies.
In partnership with the Government of Canada and the Government of Québec, the project will allow CAE to play a key role in making air travel safer, defence forces mission ready, and helping medical personnel save lives.
The Government of Canada and the Government of Québec will provide a combined investment of C$340m over the next five years (C$190 million for Canada and C$150m for Québec).
Executives and employees of CAE joined the Right Honourable Justin Trudeau, Prime Minister of Canada, the Honourable François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry as well as Mr. François Legault, Premier of Quebec, and Mr. Éric Girard, Québec’s Minister of Finance and Minister of Economy and Innovation for the announcement.
“CAE is launching a major five-year Research and Development investment program which will reinforce CAE’s position as a global technology leader, create high-value jobs and collaborations, and contribute to a greener, safer, and more inclusive world,” said Marc Parent, CAE’s President and Chief Executive Officer. “CAE is a Canadian innovation powerhouse, and our Research and Development will allow us to reinforce our leadership in training by creating digitally immersive solutions across many sectors and markets to make the world a safer place. The project will also allow us to expand into exciting new markets such as advanced air mobility, green light aircraft technologies and next generation healthcare equipment and services. We thank the government of Canada and the government of Quebec who will be partnering with us to open up these new markets for CAE and Quebec and Canada.”
“With advanced air mobility, we are on the cusp of a new era of aviation,” Parent added. “Disruptive aerospace companies are building cutting edge aircraft and creating a new sector within the industry from the ground up. We are investing to position CAE to be one of the leaders in defining this emerging industry, supporting OEMs with the development, testing and certification of aircraft programs, simulation equipment and the delivery of training to the next generation of pilots and maintenance technicians. It is expected that close to 60,000 uniquely trained professional pilots will be needed to safely fly passengers and cargo in these electric Vertical Take-off and Landing vehicles, and CAE has the expertise to help make it happen.”
CAE will harness its unique technological capabilities, long-standing expertise in supporting airworthiness test programs as well as its latest innovations in simulation, virtual/mixed reality (VR/MR) and data analytics to be at the forefront of disruptive mobility technologies such as eVTOL vehicles.
Through the project, CAE will invest in the development of electric aircraft technologies and solutions, including retrofitting its large fleet of light trainer aircraft to reduce its carbon footprint. CAE announced on Sept 28, 2020 that it became the first Canadian aerospace company to reach carbon neutrality.
Creating jobs and investing in future talent
CAE will carry out Project Resilience in Canada, utilizing its R&D laboratories, as well as its test and integration, and training facilities. Throughout Project Resilience, CAE will collaborate and co-develop technology solutions with small and medium companies from across Canada and will create 700 new highly skilled jobs at CAE in Canada, including 600 in Quebec. Through this project, CAE will work with post-secondary institutions, research centres and STEM institutions and create 5,000 Work Integrated Learning (WIL) opportunities for students and 100 new scholarship positions.
CAE employs more than 11,000 people globally, with approximately half of them working in 18 locations across Canada.
The government investments are subject to the finalization of definitive agreements.
The investments in Project Resilience are in line with CAE’s current pace of R&D investment.
Quotes from today’s government announcement regarding investments in the aerospace industry
“The aerospace sector is a pillar of the Canadian economy, providing good jobs for Canadian workers from coast to coast to coast. It’s essential that we support the long-term growth of the sector and help make Canada a world leader in greener, more innovative technologies. The investments announced today will help the aerospace sector increase its research and development efforts so that innovative, greener, more sustainable aircraft can be built right here in Canada for decades to come, creating good jobs for hard-working Canadians.”
– The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada
“These are major projects that will drive Quebec towards the future! We will design the helicopters and planes of tomorrow here, in Quebec. These devices will generate wealth, all while reducing greenhouse gas emissions all over the planet. The aerospace industry will start up again stronger. Your government will be there to solidify our status as a leader and to ensure a bright future for the Quebec aerospace industry.”
– Mr. François Legault, Premier of Quebec(Source: PR Newswire)
14 Jul 21. Kromek – backing a tech winner in the fight against Covid-19. A radiation detection technology company focused on the medical, security screening and nuclear markets is planning a commercial roll-out of its Covid-19 bio-security pathogen detectors. It is winning multiple contracts in other parts of the business, too.
Order book covers 75 per cent of revenue estimates for 2021/22 financial year.
- Successful pilot of Covid-19 pathogen detectors in UK airports, schools and retail outlets ahead of commercial roll-out.
- Cutting edge CZT detectors being deployed in medical imaging scanners in multiple countries.
- £20m worth of nuclear sector revenue in active procurement that could be delivered this year.
Kromek (KMK:15.75p), a Sedgefield-based radiation detection technology company focused on the medical, security screening and nuclear markets, has announced a raft of contract wins worth over £0.75m alongside annual results. The directors also revealed that the current order book covers 75 per cent of analysts’ revenue estimates for the 2021/22 financial year which point towards turnover rising from £10.4m to £15m.
Moreover, house broker Cenkos Securities expects gross margins to rise from 48 to 52 per cent, so with the benefit of a relatively fixed cost base last year’s Covid-19 impacted cash loss of £1.7m is forecast to produce a small adjusted cash profit. Paul Hill of Equity Development has similar estimates. It’s worth pointing out that forecasts don’t factor in any contribution from Kromek’s bio-security pathogen detectors which sample air and identify the presence of any biological pathogen including Covid-19.
The technology is based on Kromek’s work in developing a mobile bio-security system capable of detecting airborne pathogens for an agency of the US Department of Defence (DARPA). In the past month, DAPRA awarded Kromek a follow-on US$6m (£4.2m) contract to deliver an automated and fully mobile airborne pathogen detection system, and the company has been awarded a £349,000 contract from the UK Ministry of Defence. Chief executive Arnab Basu (pictured) says his company is in “serious discussions with multiple governments” and notes that “its unique set of IP isn’t reflected in the current valuation.” I concur, so much so that with a raft of positive news flow set to announced on multiple fronts in the coming months I expect the share price to re-rate markedly.
Firing on all cyclinders
In the civil space, and funded by a £1.25m Innovate UK grant, Kromek’s Covid-19 pathogen detectors are being piloted successfully in UK airports, hospitals and the retail sector ahead of commercial roll-out this year. A false alarm rate of only one in 800,000 tests means that detection levels are comparable with gold standard PCR tests. To quantify the size of the opportunity, Hill at Equity Development values the annual global market for the biological threat detection devices at £500m and believes that Kromek could win a 20 per cent share on a 25 per cent profit margin.
During our results call Basu also revealed that Kromek is scaling up its US$58m seven-year contract with an Original Equipment Manufacturing (OEM) customer that is installing the company’s cutting edge CZT detectors in medical imaging scanners in multiple countries. The contract supports a third of analysts’ full-year revenue estimates. More awards should be forthcoming given that an increasing number of OEMs are deploying ‘best in class’ CZT detectors in scanners to more accurately diagnose and treat patients with cancer, Parkinson’s Disease, cardiovascular illnesses and osteoporosis.
The company should be a beneficiary of the UK Government’s £329m five-year nuclear detection budget, too, given that Kromek’s product offering covers key areas of border control and terrorism threat detection – its dirty bomb detectors are now deployed in 26 countries – and the UK Government is “localising supply chains.” Interestingly, Basu revealed that Kromek has £20m worth of revenue in active procurement in the nuclear sector that “could be delivered this year”, highlighting the marked increase in activity being seen across major international markets.
In security screening, Kromek has received its first commercial order, and subsequent follow up orders, from an OEM customer whose next-generation scanner, based on Kromek technologies, achieved the highest level of European liquid explosive detection certification for cabin baggage. In addition, the company has received orders for CZT modules to be designed into an advanced baggage screening system of a new US-based customer.
Importantly, Kromek has the funding to support delivery of further contract wins following the £13m equity raise at 15p a share in February 2021. Closing net cash of £7.4m is effectively £8.8m as post financial year-end the US Government has written off US$1m Covid-19 Paycheck loan and a further US$0.8m loan is expected to be forgiven, too.
I last suggested buying the shares at 16.75p (‘Small-cap bargain hunt’, 14 February 2021), and feel that the value of the company’s IP and scale of the profit opportunity on offer from Kromek’s Covid-19 pathogen detectors – expect some exciting news within the next few months – warrant a return to April’s highs (28p), and well beyond. Strong buy. (Source: Investors Chronicle)
14 Jul 21. What’s Up in Defense: Investment Outlays Up 23% in June; 9% Rolling 3 Months. Monthly DoD investment outlays rose 23% y-o-y in June to $23bn, with procurement up 22% y-o-y vs a rise of 24% for R&D. Over the past three months R&D advanced 5%, vs an 11% increase for procurement, leading to a 9% increase in investment outlays. Investment spending lagged the budget by $12bn, or 5%, in FY20, which should support incremental growth in FY21 with a flattening budget.
Investment Outlays Rose 23% in June, Driven by RDT&E. Investment outlays are up 8.5% 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 ninth month of the FY is up 22.9% y-o-y following a 12.2% decline in May. 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 June, the 23.7% increase in R&D was driven by the Army up 205.3%, while the Air Force was down 3%. Procurement was up 22.2% y-o-y due to a 62.3% increase in Air Force outlays with DW down 13.0%.
Tracking Outlays vs Appropriations – Nine Month Outlays 75% of FY21 Funding. Ex 4 highlights investment outlays relative to Appropriations. In FY19/FY20, there was a $43BB lag. For FY20, investment outlays of $239BB compared to the enacted budget 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 $250BB in investment funding, this could be an incremental 4 pts of annual growth. Outlays in the first nine months of the fiscal year of $187.3BB are 75% of the FY21 budget.
Defense Budget What’s Next? On May 28th, the Administration released its DoD budget request of $715bn, which is up ~2% y-o-y. The request shifts funding toward R&D investments which rise 5% in FY22 vs. a 6% decline for Procurement. A key element of the budget reflects divestment of legacy systems w/ funds reallocated to cutting-edge technology. Nonetheless, the late release pushes the FY22 mark-up and Appropriations process, with the fiscal year likely to start under a CR. There is likely to be disagreement in Congress with HASC Republicans urging 3-5% spending growth, while Progressive Democrats favor cuts. There are pockets of growth around space and cyber, but also areas of pressure with some cuts across the Army and broader procurement accounts. A key watch item is the funding of unfunded priorities in Congress.
The Near-Term Outlook Likely Faces Pressure. Deficits driven by COVID-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 FY22 budget request did not include a FYDP providing some cloud over the longer-term outlook. There is likely some dependence on the National Defense Strategy and the offsetting savings that can be harvested to drive investments in modernization and a pivot to China, but also the force required for a diplomacy first strategy. (Source: Jefferies)
14 Jul 21. Patria reforms under its ambitious growth strategy. The second quarter of 2021.
- Patria Group’s net sales for the first two quarters was EUR 251.4m (EUR 255.5m in 2020).
- Operating profit was EUR 20.8m (11.2).
- Equity ratio was 39.6% (35.9%) and net gearing 70.3% (90.3%).
- Patria’s new strategy aims at ambitious growth by the end of year 2025. In order to fully utilize opportunities Patria has decided to take into use a new growth-supporting operating model from January 1, 2022 onwards. The related group-wide cooperation negotiations were finalized in an outstanding cooperation between the personnel groups and the company.
- Patria was awarded a contract for the delivery of Patria Sonac ACS Acoustic Minesweeping Systems to the Royal Norwegian Navy by the Norwegian Defence Material Agency (NDMA).
- Joint Finnish-Latvian development programme for sustained army mobility enhancement, to which Patria will deliver the 6×6 vehicle chassis platform, proceeds as planned. A demo tour for the Latvian Armed Forces and an industry day for the local company network was organised in Latvia in May. A cost-effective supply chain is currently being created in Latvia.
- Millog received a significant order related to the Finnish Defence Forces´ CV9030 infantry fighting vehicle fleet mid-life upgrade work.
- Senop Oy signed a contract with Kongsberg Defence & Aerospace As to supply integrated Fire Distribution Centres to an international NASAMS program.
- Patria’s Land business unit achieved the Task Classification I — Top of the World Recognition at the Finnish Institute of Occupational Health’s Zero Accidents Forum. During 2020, 385 consecutive days were achieved without occupational accidents.
- Patria Pilot Training offering civilian pilot training and Patria Aerostructures unit´s metal operations started cooperation negotiations in June concerning all personnel due to productional and financial reasons caused by the COVID-19 pandemic.
Highlights after the second quarter
- As part of the European Defence Industrial Development Programme, Patria has been selected to lead a defence industry consortium developing next-generation armoured platforms and upgrading existing ones in order to improve ground combat capabilities. The consortium includes 19 leading defence companies from various EU countries.
- Patria is also part of a three-country Northern-European cooperation in a consortium selected by the EU in the European Defence Industrial Programme for Maritime Surveillance Capabilities. The member states are Sweden, Finland and Estonia.
- Patria and Kazakh airline Air Astana signed continuation for an agreement of training new pilots. The agreement is valid until the end of 2023.
- The Finnish Defence Forces ordered laser sights and additional image intensifiers from Senop Oy. The value of the contract is more than 13.6 M€ excluding VAT.
Outlook for the rest of the year
Patria focuses on its new growth strategy and operating model and creates a new organisation during the autumn. The new operating model aims at developing customer-centricity as well as strengthening operational efficiency and financial results. This will enable Patria to keep its reliable, cost-efficient life cycle support services and products in focus and maintain customer fleets’ performance on the required level in all conditions also in the future.
The significant HX Programme continues providing an extremely important and long-standing opportunity to Patria.
Patria 6×6 vehicle programme with Finland and Latvia proceeds as planned, and Patria expects it to lead to actual vehicle system procurements during 2021. It is also foreseen, that the programme will be of interest to other countries wishing to improve mobility of their armed forces.
13 Jul 21. IMCO Industries Ltd. acquires EMT Electronics Manufacturing Technology. This acquisition is a further step in IMCO Group’s expansion strategy, offering its customers complete end-to-end solutions that will now also include Electronic Manufacturing Services.
IMCO Group announced the acquisition of EMT Electronics Manufacturing Technologies Ltd. subject to suspending conditions. EMT specializes in the design, manufacturing, and testing of electronic circuits, and has been acquired for the amount of up to NIS 7m, of which NIS 4m will be paid at the closing, and an additional NIS 3m are subject to future profit. The acquisition furthers the group’s strategy to be a one-stop shop for customers in the security, defense, medical and civilian fields. With EMT’s proven excellence in the design and production of integrated circuits, IMCO now offers a complete in-house solution, including electronic manufacturing.
Eitan Zait, IMCO Industries CEO: “This move is a further step in IMCO Group’s path to provide its customers with complete solutions tailored for customer’s requirements, converging towards Tier-1 customers worldwide. We are glad to announce this expansion, giving us further in-house capabilities of designing and assembling electronic PCBs. EMT is a leader company in the field, and we are convinced it will contribute to our entire group and allow us to continue to lead and provide our customers with complete and advanced turn-key solutions.”
Yaniv Hadar, EMT CEO: “We are proud and excited to join the IMCO Group, and are confident that our proven excellence for the production and integration of electronic systems and assembly of electronic PCB’s will enable the group to enrich its capabilities and provide its customers with state-of-the-art solutions at the highest standards and technologies. Our rich experience in working with leading customers worldwide, both in the security and civilian fields, enables us to know how to suit the ideal solution for each request. “
IMCO Industries Ltd. (Tel Aviv Stock Exchange TASE: IMCO) is a leading defense provider of complex solutions for air, ground, and naval applications. With advanced design, global mass production, and project management capabilities, IMCO delivers a wide range of solutions from electrical harnesses and electro-mechanical devices to cutting-edge LED lighting systems. Founded in 1974, IMCO is a sole supplier of armed forces and defense companies. IMCO has been a trusted supplier and partner of the defense industry for nearly five decades. The company has been involved in generation after generation of some of the most reliable fighting vehicles, including the Merkava tank and the Namer APC.
EMT, Electronics Manufacturing Technology Ltd. is an Israeli company specializing in the design and production of electronic components and provides a variety of contacted turn-key solutions and assembly and integration of electronic products. The company serves a wide range of customers operating in the communications, optical equipment, medical equipment and defense industries. http://www.e-mt.co.il/
12 Jul 21. Monteverde & Associates PC Announces an Investigation of Broadstone Acquisition Corp. – BSN. Juan Monteverde, founder and managing partner at Monteverde & Associates PC, a national securities firm rated Top 50 in the 2018-2020 ISS Securities Class Action Services Report and headquartered at the Empire State Building in New York City, is investigating Broadstone Acquisition Corp. (“BSN” or the “Company”) (BSN) relating to its proposed merger with Vertical Aerospace Ltd. Under the terms of the agreement, BSN shareholders are expected to retain ownership of 14% of the combined company.
The investigation focuses on whether Broadstone Acquisition Corp. and its Board of Directors violated securities laws and/or breached their fiduciary duties to the Company by 1) failing to conduct a fair process, and 2) whether the transaction is properly valued.
It is free and there is no cost or obligation to you.
About Monteverde & Associates PC
We are a national class action securities litigation law firm that has recovered millions of dollars and is committed to protecting shareholders from corporate wrongdoing. We were listed in the Top 50 in the 2018-2020 ISS Securities Class Action Services Report. Our lawyers have significant experience litigating Mergers & Acquisitions and Securities Class Actions. Mr. Monteverde is recognized by Super Lawyers as a Rising Star in Securities Litigation in 2013, 2017-2019, an award given to less than 2.5% of attorneys in a particular field. He has also been selected by Martindale-Hubbell as a 2017-2020 Top Rated Lawyer. Our firm’s recent successes include changing the law in a significant victory that lowered the standard of liability under Section 14(e) of the Exchange Act in the Ninth Circuit. Thereafter, our firm successfully preserved this victory by obtaining dismissal of a writ of certiorari as improvidently granted at the United States Supreme Court. Emulex Corp. v. Varjabedian, 139 S. Ct. 1407 (2019). Also, over the years the firm has recovered or secured over a dozen cash common funds for shareholders in mergers & acquisitions class action cases.
If you owned common stock in the Company and wish to obtain additional information and protect your investments free of charge, please visit our website or contact Juan E. Monteverde, Esq. either via e-mail at or by telephone at (212) 971-1341.
(Source: PR Newswire)
13 Jul 21. Company Announcements – Solid State PLC.
Final Results & Investor Presentation. Solid State plc
(“Solid State”, the “Group” or the “Company”)
Final Results for the 12 months ended 31 March 2021
Analyst Briefing & Investor Presentation
Solid State plc (AIM: SOLI), the specialist value added component supplier and design-in manufacturer of computing, power, and communications products, is pleased to announce its audited final results for the 12 months ended 31 March 2021.
The Group has delivered:
- Stable revenue year on year at £66.3m (2020: £67.4m), reflecting diversified market sector exposure which has given the business resilience to the COVID-19 pandemic and Brexit challenges.
- Record profitability reflected in adjusted operating margins increasing 110bps to 8.3%, based on solid margins in both divisions and the improved operational efficiencies.
- Adjusted fully diluted EPS up 18% to 54.7p (2020: 46.3p).
- Consistently strong operating cash generation of £6.9m (2020: £8.0m) with reported cash conversion of 162% (2020: 195%).
- A dividend increased 28% on prior year reflecting record performance in the year.
- An open order book on 31 May 2021 of £51.0m – and £41.4m (2020: £37.9m) on like-for-like (excludes the companies acquired during the year) basis reflecting 9.2% organic growth in the open order book on 31 May 2021.
Strategic Achievements in FY20/21
Notable achievements in FY20/21 to advance our strategy included:
- Acquisitions of Willow Technologies and Active Silicon:
o Enhanced technology adding a portfolio of own brand image processing products and electro-mechanical components (including component manufacturing capabilities in USA); and,
o Enhanced the international sales capabilities and resources in the USA and Europe.
- Internal technology development of the Group’s battery pack and Battery Management Systems (BMS) offering, own brand computing products and building the portfolio of communications products through the Group R&D programme.
- Established in-house Electromagnetic Compatibility (EMC) testing capabilities through the capital investment programme.
Commenting on the results and prospects, Gary Marsh, Chief Executive said:
“I am pleased to report that Solid State has delivered another year of record profits and a further step in achieving its medium term target of doubling adjusted earnings per share, despite a challenging market environment and the pandemic.
“The completion of two bolt-on acquisitions late in the year significantly enhance the Group’s capabilities and add to the Group’s resilience and strategic targets of achieving greater diversity in geographical and industry sector coverage.
“The Board is confident that the achievements of the last year and the post period end growth in open orders are a very good foundation going into the current financial year. The experience of our team, focus on structural growth markets and the balance sheet strength set Solid State aside from many in our sector, giving the Directors confidence in the mid-term prospects.” (Source: FT.com)
06 Jul 21. Gilmour Space secures $61m Series C funding. One of Australia’s leading launch services companies, Gilmour Space Technologies, has secured $61mi from global investors in what is the largest private equity investment raised by a space company in Australia. The company plans to launch its first orbital rocket next year.
The Series C round, which includes US-based Fine Structure Ventures, Australian venture capital firms Blackbird and Main Sequence, and Australian superannuation funds HESTA, Hostplus, and NGS Super, brings the Gold Coast based company’s total funds raised to date to $87m.
Brett Rome, lead investor and Managing Partner at Fine Structure Ventures, said, “The team at Gilmour is building the leading sovereign launch company in Australia, and utilising their innovative hybrid rocket engine to efficiently address the growing global demand for putting satellites into orbit.”
Since launching its first hybrid rocket in mid 2016, Gilmour Space has achieved a series of significant technology milestones to become a world leader in orbital-class hybrid propulsion technologies that use safer and lower cost fuels than traditional chemical propulsion rockets.
In recent months, the company, which employs 70 people, has also secured launch contracts with Australian and international customers including US-based Momentus, Sydney-based Space Machines Company, and South Australia’s Fleet Space Technologies.
“This new investment will give us runway to launch our first orbital rocket in 2022. It will help us develop multiple Eris vehicles, grow our team from 70 to 120 in the next 12 months, build our sovereign space manufacturing capability for rockets and satellites, and facilitate a commercial spaceport in Queensland, where we hope to launch the world’s first hybrid rocket to space,” said Gilmour Space CEO and Co-Founder, Adam Gilmour. (Source: Rumour Control)
06 Jul 21. Satellogic Is SPAC’d. Nettar Group, Inc. (“Satellogic” or the “Company”) and CF Acquisition Corp. V (Nasdaq: CFV) (“CFAC V”), a SPAC sponsored by Cantor Fitzgerald, have entered into a definitive merger agreement that will result in Satellogic becoming a publicly traded company. The transaction is expected to be completed early during the fourth quarter of 2021, subject to regulatory approvals and other customary closing conditions. After closing, Satellogic will trade on the Nasdaq under ticker symbol SATL.
Using their proven technology at scale, Satellogic will be positioned to remap the Earth daily in high resolution and at an affordable price-point, fundamentally changing the way people access and use satellite data. The Company’s patented camera design captures 10 times more data from a single satellite than any other EO smallsat.
Satellogic currently has 17 commercial satellites on-orbit, including four that were launched on June 30. At 70 centimeters per pixel, the company stated that the high-resolution images of Earth produced by their satellites add up to more capacity than the next four competitors combined. Each satellite collects approximately 300,000 sq km of data per day and produces full-motion videos(FMV) o fas much aso two minutes in length.
Satellogic was founded to help solve some of the greatest challenges of our time: resource utilization and distribution. From tradeoffs between food, energy and water supplies, to monitoring the impacts of natural disasters, global health and humanitarian crises in the midst of a looming climate emergency; access to a continually refreshed source of global, high-quality data is critical to confronting some of the world’s most crucial issues.
Satellogic designs and manufactures every core component that goes into creating and manufacturing their satellites. This vertical integration provides a significant cost advantage, enabling the firm to produce and launch satellites for less than one-tenth the cost of their competitors, which buy components and use third-party assemblers. These capabilities also result in shorter R&D cycles as well as the ability to efficiently scale, all the while maintaining overall quality. By comparison, Satellogic is achieving more than 60 times better unit economics than the firm’s closest peers in the NewSpace sector, and more than 100 times better unit economics than legacy competitors.
Satellogic recently signed a multiple-launch agreement with SpaceX to deploy the full constellation of 300+ satellites, which is expected to completed by 2025. Once fully deployed, Satellogic will be the only company capable of remapping the world at resolutions as high as 30 centimeters and at the frequency required to address virtually all commercial applications.
On July 5, 2021, Satellogic entered into a definitive merger agreement with CFAC V. The transaction reflects an implied pro forma enterprise value of $850m for Satellogic, representing a multiple of approximately 1.1x projected revenue of approximately $800m by 2025.
The transaction is expected to result in cash on the balance sheet of up to approximately $274m, after transaction expenses and debt repayment, through the contribution of up to $250m of cash held in CFAC V’s trust account (assuming no redemptions by CFAC V’s public stockholders), and a concurrent PIPE offering of $100m led by SoftBank’s SBLA Advisers Corp. and Cantor Fitzgerald, among other top-tier institutional investors.
The transaction, which has been unanimously approved by the Boards of Directors of Satellogic and CFAC V, is subject to approval by CFAC V’s stockholders and other customary closing conditions.
Emiliano Kargieman, CEO & Co-Founder of Satellogic, said, “Since our founding, Satellogic has been committed to our mission of democratizing access to geospatial data to help solve the world’s most pressing problems. Today’s transaction is a significant milestone and brings us one step closer to fulfilling that goal. The merger will allow us to continue building out our constellation of satellites and maintain our position as a global leader in sub-meter imagery. Satellogic is poised to be the only company capable of remapping the world daily at the sub-meter resolution necessary to address commercial applications affordably. We are grateful to our talented and ambitious team who have developed best-in-class technology, a strong track record of delivering satellites to orbit, and the ability to scale at near-zero marginal cost.”
Howard W. Lutnick, Chairman & CEO of CFAC V and Cantor Fitzgerald said, “Satellogic is uniquely positioned to dominate the Earth Observation industry. Its technology, data, and analytics have vast use cases across countless industries. Imagine insurance companies being able to document disaster damage in real-time detail remotely. Or an app providing direct daily satellite data to a farmer about the best time to harvest crops. Or bringing live documentation of deforestation or rising sea levels to policymakers to drive the discussion around climate change. The possibilities are limitless. We are excited to partner with Emiliano and the rest of the Satellogic team as they endeavor to build and launch 300+ satellites in the constellation and unlock the significant opportunity for commercial applications to enable smarter global decision-making.” (Source: Satnews)
12 Jul 21. Even in a challenging period, publicly traded defense stocks thrive. From a business perspective, 2020 will be remembered as an incredibly challenging and volatile year. Yet by mid-2021, as society (at least in the United States) began the process of returning to normal, investment returns of the defense sector rebounded to historic highs. This remarkable indicator demonstrates just how strong the sector has been. But long-time investors would not be surprised by this latest rebound. In each of the previous two decades, 2000-2009 and 2010-2019, the SPADE Defense Index outperformed the S&P 500 by more than 120 percent.
Companies around the world dealt with the impact of a pandemic that shut down both global and local trade, and the defense sector was no different. Firms operating in defense and adjacent markets — such as aerospace — were further challenged by a manufacturing shutdown of the Boeing 737 Max commercial aircraft, a collapse in global commercial air travel and transport (up to 90 percent at times), and a U.S. political election that saw a change in control at the White House and the House of Representatives.
As firms struggled to maintain a healthy workforce and sustain operations during a slowing economic environment, they also had to manage a global supplier base with similar problems. The U.S. Department of Defense, recognizing that defense production capacity is vital to readiness, took multiple actions to assist the defense-industrial base, and should be commended for doing so.
Much of the sector was deemed to have essential workers, and many manufacturing plants were declared critical infrastructures. This enabled the agency to allocate more than $10bn from COVID-19 economic support packages provided by Congress to assist manufacturers experiencing hardship from the aerospace slowdown and to accelerate contract payments to prime contractors who, in turn, accelerated payments to their subcontractors.
As 2020 moved into 2021, the outlook for defense sector firms improved. Global regulatory agencies approved the 737 Max to return to flight, commercial air traffic began an uptrend and new commercial aircraft orders were placed. Additionally, the White House budget proposal for fiscal 2022 shows continued support for the Pentagon and a willingness to invest in new technologies, which will enable defense firms to better compete on a global scale.
The stability and support from the defense industry’s largest customer have encouraged companies to maintain their strategy for growth. The announcements of mergers and acquisitions that will impact the Top 100 list continue. High-profile deals for Cubic Corporation, FLIR Systems, Perspecta and DynCorp International have already closed. A proposed deal for Lockheed Martin to acquire Aerojet Rocketdyne awaits regulatory approval later this year.
Combined, these recent positive actions have been reflected in stock prices. During 2020, the SPADE Defense Index was flat on the year, while its constituent stocks provided returns to investors that ranged from a gain of 146 percent (Maxar Technologies) to a loss of 55 percent (Viasat).
This year, through June 15, 2021, the index gained 14 percent, outperforming the broader U.S. market. Such performance is not atypical: Over the past 21 years, the sector outperformed in 17 of them, many times by double digits. It is one reason why funds, such as Invesco’s Aerospace & Defense ETF, have invested a collective $5bn in assets in the sector.
Publicly traded defense companies represent more than 70 percent of Defense News’ latest Top 100 list, and 80 percent of those are based in the United States. This provides a wealth of data and a measure of transparency on a sector that has shown to be a solid investment in good times as well as troubled ones. (Source: Defense News Early Bird/Defense News)
12 Jul 21. Five takeaways from this year’s Top 100. This year’s Defense News Top 100 list includes a few non-surprises. Lockheed Martin remained the largest contractor, which has been the case since the annual list was published in 2000. Consolidation resulted in movement among contractors, with Raytheon Technologies knocking Boeing off its No. 2 position. Finally, U.S. and Chinese firms dominate the Top 10, reflecting the size of those governments’ respective defense budgets.
But here’s what I found noteworthy about this year’s list:
- Some prominent suppliers are missing. Unfortunately, all contractors don’t respond to the Defense News survey, notably General Atomics and SpaceX, as well as some suppliers that would appear to clear the lowest-ranking sales figure on the list. Triumph Group is one example. Some of the firms taken private have also dropped from the Top 100, notably Cobham, which was purchased by Advent International in 2020.
For non-U.S. contractors, there also some that could show up in the Top 100, including several Russian and Chinese contractors, the Polish Armament Group, and possibly Taiwan’s Aerospace Industrial Development Corporation.
- Defense News added some more services contractors. This year’s list includes two federally funded research and development centers — Mitre and Aerospace Corporation. This raises the question, however, of where to draw the line between private, nonprofit and state-owned enterprises. Naval Group of France is included in the list, and Chinese firms are state-owned, though they may have multiple subsidiaries listed on stock markets. The U.S. Department of Defense operates logistics centers, shipyards, depots and arsenals. If government-owned shipyards compete against the private sector for ship repair work, they arguably are a market factor, too.
- For all the interest defense establishments have in fostering innovation and new ideas, no new startup in recent years has made it into the Top 100. SpaceX could be the one, and others, such as Palantir or Turkey’s Baykar, may have a crack at this in the 2020s. But contrast defense to other high-tech or engineering sectors where new entrants are reaching scale and are shaking up the old guards. For the DoD in particular, it has not supported a new entrant that has been able to scale to a sales level that would entail inclusion in the Top 100. Doing so could well spawn significant additional capital inflows to support defense/security startups.
- Not all contractors increased sales in 2020 compared to 2019. The total sales data from fiscal 2020 is not comparable to fiscal 2019 because there are eleven firms included in this year’s list for which there is no fiscal 2019 data. United Technologies Corporation and Raytheon Company were listed in last year’s rankings, but there were divestitures to BAE Systems with the formation of Raytheon Technologies. Still, it’s noteworthy that not all contractors increased sales in FY20 compared to FY19.
- Consolidation has been an enduring theme and continues to reshape the sector. However, it remains to be seen how the Biden administration will assess further consolidation in defense. The Top 100 suggests a fragmented market, but that’s far from the case in some segments where a handful of suppliers or primes exist. The services sector, however, is an exception, and the Top 100 suggests further consolidation is probable. (Source: Defense News Early Bird/Defense News)
12 Jul 21. Titomic (ASX:TTT) wraps up acquisition of Silicon Valley firm.
- Titomic’s (TTT) US subsidiary finalises its acquisition of Silicon Valley-based Tri-D Dynamics for up to US$1.5m (A$2.01m) in cash and shares
- Tri-D is a US company seeking to upgrade infrastructure by embedding digitally connected technology into metal structures
- The team are set to focus on Titomic’s initiatives in the defence, aerospace as well as the oil and gas industries
- The acquisition was initially announced in by Titomic in April
- Titomic shares were up 4.65 per cent and trading at 45 cents
Titomic’s (TTT) US subsidiary has finalised its acquisition of Silicon Valley-based Tri-D Dynamics for up to US$1.5m (A$2.01m) in cash and shares. TTT describes Tri-D as a design and manufacturing company developing smart pipe infrastructure, which seeks to upgrade infrastructure by embedding electronics into metal structures to outfit them with digitally connected technology. Titomic and the three person US-based team are set to join together under the Titomic US banner after initially announcing the acquisition in April. The team are set to focus on Titomic’s initiatives in the defence, aerospace as well as the oil and gas industries. According to TTT, consideration for the buy comes in the form of US$1m (A$1.3m) in cash to external Tri-D shareholders and the issue of ordinary fully paid shares in the company equal to US$500,000 (A$669,000). Payment of consideration to the relevant Tri-D is set to be subject to the relevant Tri-D Founder continuing employment with Titomic for three years. Titomic Chief Executive Officer Herbert Koeck said the acquisition represented an important of part of its US strategy. “The acquisition of the Tri-D business is an important part of our U.S. strategy into the defence and aerospace industries where there is a strong need for the cost and performance advantages which our market ready solutions with best-in-class CSAM technology provide,” he said. (Source: Google/https://themarketherald.com.au/)
09 Jul 21. UK engineer Senior lifts forecast on recovery in aerospace, oil & gas. British jet and auto parts supplier Senior Plc (SNR.L) on Friday forecast 2021 performance to be slightly ahead of its previous expectations, encouraged by “clear signs of recovery” in the aerospace and the oil and gas sectors. The engineering firm, which supplies equipment to planemakers including Boeing (BA.N), Airbus (AIR.PA) and heavy equipment maker Caterpillar (CAT.N), said trading in six months to June had been ahead of management expectations and sales were likely to fall 13%. While the aerospace industry is still reeling from a pandemic hit, Senior pointed to updates from Airbus and Boeing in recent weeks, saying some production rates picking up towards the end of this year and into 2022 support its outlook raise. Parts suppliers such as Senior are facing a turbulent time, with production cuts from automakers due to chip shortages adding to woes of a demand slump from planemakers. The industry had already weathered Boeing’s 737 MAX crisis since 2019. London-listed Senior also said on Friday it ended the period with a net cash inflow of 61m pounds ($84m), while net debt was expected to be around 71m pounds. In the past weeks, the company has managed to fend off a $1.2bn takeover bid from private equity firm Lone Star Global. read more ($1 = 0.7261 pounds) (Source: Reuters)
09 Jul 21. Mubadala’s satellite group Yahsat IPO raises $731m. Share sale is the second largest on record in Abu Dhabi and gives Yahsat a market value of about $1.8bn. Abu Dhabi sovereign fund Mubadala Investment Co. has raised AED2.7bn ($731m) in an initial public offering of satellite operator Yahsat after pricing shares near the middle of a marketed range. A subsidiary of the fund sold 975.9m shares in Yahsat, which trades under the name Al Yah Satellite Communications Co., for AED2.75 each, according to a statement Friday, after marketing them for between AED2.55 and AED3.05 each. The share sale is the second largest on record in Abu Dhabi, after Abu Dhabi National Oil Co. for Distribution PJSC raised $850.8m in a 2017 offering, according to data compiled by Bloomberg. It is also the first IPO in Abu Dhabi since that listing.
The IPO gives Yahsat a market value of about AED6.7bn ($1.8bn), according to the statement. Yahsat will remain majority owned by Mubadala after the listing. The offering was multiple times oversubscribed and attracted interest from “high quality, global institutional investors allowing for increased foreign direct investment into the UAE”, according to the statement. The Emirates Investment Authority subscribed to five percent of the final offer size. Sovereign funds ADQ and Mubadala – alongside the emirate’s state oil company – have signalled their intentions to list more assets locally.
“This IPO paves the way for further interest and investment in similar, future transactions,” the company said.
First Abu Dhabi Bank PJSC, Bank of America Corp. and Morgan Stanley led the offering, while Abu Dhabi Commercial Bank PJSC, EFG-Hermes Holding Co. and HSBC Holdings Plc were the joint bookrunners. The shares are set to begin trading on July 14. (Source: ArabianBusiness.com)
09 Jul 21. Communications & Power Industries (CPI) has successfully completed the purchase of TMD Holdings Limited and its subsidiaries, including TMD Technologies Limited and TMD Technologies, LLC (together, TMD). Consisting of approximately 170 employees in facilities in the United Kingdom and the United States, TMD is a world-leading designer and manufacturer of technologically advanced microwave, radio frequency and high voltage equipment for radar, electronic warfare, communications, medical, EMC testing and scientific applications.
TMD brings new products and technological capabilities to CPI’s established portfolio of electronic components and subsystems focused primarily on the defense and communications markets. TMD’s range of reliable and innovative products includes traveling wave tubes (TWTs), TWT amplifiers, transmitters, microwave power modules, high voltage power supplies, and other microwave devices and amplifiers.
“TMD has a well-earned global reputation for high-reliability transmitters and microwave devices, in particular state-of-the-art microwave power modules and TWT amplifiers. We have long been impressed by the quality of TMD’s people and technology. Adding TMD’s proven products to CPI’s Electron Device Business will provide a TMD with a prosperous, long-term home for their business and will enable the companies to offer customers broader capabilities and more comprehensive solutions for radar, electronic warfare, communications, EMC testing and related applications,” said Andy Ivers, president and chief operating officer of CPI.
The newly acquired business will be owned and operated as a subsidiary of CPI and will be part of CPI’s Electron Device Business, which focuses on components used in the generation, amplification, transmission and reception of microwave signals. TMD’s leadership team will remain with the business and report to Todd Treado, president of CPI’s Electron Device Business.
“Having worked in close partnership with them on a number of key programs, we have come to strongly appreciate CPI’s approach to customer service, reliability and innovation. We see these as an excellent fit to the culture at TMD, which is based on the same values. The TMD team looks forward to our next chapter, growing the business within CPI and continuing to be the best partner to our customers for innovative and reliable radio frequency and high voltage power solutions,” said Dave Brown, who leads the TMD operations.
The transaction was funded using CPI’s existing cash balances. Financial terms of the acquisition are not being disclosed.
About Communications & Power Industries
Communications & Power Industries (CPI) is a global manufacturer of electronic components and subsystems focused primarily on communications and defense markets. With a heritage of technological excellence that spans decades, CPI develops, manufactures and globally distributes innovative and reliable technology solutions used in the generation, amplification, transmission and reception of microwave signals for commercial and military applications. CPI serves customers in the communications, defense, medical, industrial and scientific markets. CPI consists of Communications & Power Industries LLC, headquartered in Palo Alto, California, and Communications & Power Industries Canada Inc., located in Ontario, Canada. Learn more about CPI at www.cpii.com.
About TMD Technologies Limited
With a heritage dating back to the 1940s, TMD Technologies Limited (TMD) is a world-class designer and manufacturer of professional microwave and radio frequency (RF) products. At the company headquarters in Hayes, West London it produces specialized transmitters, amplifiers, microwave power modules (MPMs), high voltage power supplies, microwave tubes and transponders for radar, electronic warfare and communications applications. A twice previous Queen’s Award winner, TMD also produces a range of advanced instrumentation microwave amplifiers for EMC testing, scientific and medical applications. TMD is also making on-going and substantial investment in the development of quantum-enabled technology under the UK National Quantum Technologies Programme (UK-NQTP). Recently, TMD has expanded their investment in the Solid State Power Amplifier MPM space through a partnership with Diamond Microwave LTD, and now has SSPA MPMs available with various output power options from UHF through Ku-band. www.tmd.co.uk
About TMD Technologies, LLC
TMD Technologies, LLC is a U.S. subsidiary of TMD Technologies Limited. Based in Baltimore, Maryland, it provides complete technical and commercial support to TMD’s customers in the USA and offers a comprehensive product repair center. The Sales and Business Development team is engaged with promoting the whole range of TMD’s products, as well as identifying new business development opportunities in the United States. www.tmdus.com
09 Jul 21.. Sentient Digital also announced a rebranding that involves a new name and a logo as part of the acquisition. Mission-focused engineering services provider Sentient Digital has completed the acquisition of a US Department of Defense (DoD) technology contractor RDA. Sentient Digital has also announced a new brand identity, SDi, in relation to the transaction. The deal is in line with SDi’s strategy to build crucial technological skills and enter new markets.
Since late last year, SDi has been working on plans related to the purchase of RDA.
The parties signed the transaction agreement with 1 June as the actual closing date. RDA is a provider of systems engineering and software development services.
With the addition of RDA, SDi will expand its specialised technological expertise in mission-crucial acoustic engineering.
These expanded skills will allow it to support signal processing for anti-submarine warfare (ASW) applications.
SDi president Chris Mobley said: “This acquisition aligns to our goals of expanding our customer base and building organisational expertise.
“Further, this deal supports our vision of becoming essential to our customers through continued organic growth of capabilities, targeted IP acquisitions, and new operating models that inspire innovation to create differentiated products and services for our customers.”
With its rebranding, SDi will now cease to operate under the trade name or logo of Entrust Government Solutions. (Source: army-technology.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.