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03 Sep 21. TP Group PLC (AIM:TPG) slipped 7% to 5.6p at noon after Science Group PLC (AIM:SAG) withdrew its takeover offer. Science Group, which dipped 1% to 426.16p, said it was because “TP Group have been unwilling to provide access to due diligence information unless certain conditions were agreed which are unacceptable to Science Group”.
“TP Group have declined to even define the content and extent of such due diligence information if it were to be provided, nor have they responded to other pre-conditions within the Science Group indicative offer,” the engineer said.
Last month, TP Group said that both takeover offers received at the time were undervaluing the business.
As of Friday, Science Group holds 24.1% of TP Group and said it will keep it as a “strategic investment” while adopting “an active engagement strategy in relation to its investment”. (Source: proactiveinvestors.co.uk)
02 Sep 21. Melrose returns to profit. Turnaround of GKN showing signs of progress.
- Asset sales bring down company’s debt
- £729m being returned to shareholders
Melrose Industries (MRO), a company that specialises in turning around struggling engineering businesses, took on its biggest challenge with the £8.1bn purchase of UK engineering group GKN in 2018. It was forced to give certain assurances to gain approval in the face of hostility from unions and then had to contend with a pandemic that hit GKN’s two main business lines hard. The aerospace division lost £410m in 2020 as revenue fell 27 per cent, while its automotive arm declared a statutory loss of £183m as sales dropped by 19 per cent. Shutdowns at customers’ factories accelerated transformation plans for the automotive business and in aerospace it addressed the severe downturn in demand head-on by reducing headcount. Although restructuring of the latter segment, particularly in the US, is still getting going, the efforts made so far seem to be paying off. Adjusted operating profit stood at £223m in the six months to June, ahead of forecasts, compared with an £11m loss in the same period last year.
Adjusted net debt has fallen substantially to £300m, compared with £2.85bn at the beginning of the year, and a post-acquisition pension deficit of £1bn has now been whittled down to £150m, meaning the group can halve its annual contribution to £30m a year. The improved position is largely due to proceeds generated from the sale of Nortek Air Management for £2.6bn in June. Combined with a £200m deal agreed in August to sell Nortek Control, the £700m in cash generated since buying the group five years ago and the retention of another business unit, Melrose is “well-placed” to deliver on its intention to double shareholders’ returns from that deal, the company said.
Later this month, Melrose will hand back £729m in proceeds to shareholders. Even after factoring this in, net debt-to-ebitda stood at 1.5x, compared with 4.1x at the start of the year.
Although sales in GKN’s aerospace division remain 33 per cent below 2019 levels and the automotive sector is still hobbled by a global semiconductor shortage, executive vice-chairman Chris Miller argues its growth potential is “much higher than Nortek” as it is still in a much earlier phase of restructuring.
Analysts agree. Peel Hunt’s Harry Philips said his full-year earnings forecast for Melrose could edge up by £20m to £450m. Earnings per share (on a smaller base due to buybacks) could rise to 4.8p, up from a current target of 3.9p, he said. His target price of 300p a share is way ahead of the FactSet consensus of 214p, but even the average estimate (likely to be updated) is comfortably above its current value. Upgrade to buy. Last IC view: Hold, 111p, 3 Sep 2020. (Source: Investors Chronicle)
02 Sep 21. SAIC Announces Second Quarter of Fiscal Year 2022 Results.
- Revenues increase to $1.8bn; 4.1% total revenue growth, 3.8% growth excluding acquired revenues
- Diluted earnings per share increase to $1.41; Adjusted diluted earnings per share(1) increase to $1.97
- Net bookings of $1.6bn; Book-to-bill ratio of 0.9 for the second quarter
- Company raises revenue, adjusted EBITDA margin(1) and adjusted diluted EPS(1) guidance for fiscal year 2022
Science Applications International Corporation (NYSE: SAIC), a premier Fortune 500® technology integrator driving our nation’s digital transformation across the defense, space, civilian, and intelligence markets, today announced results for the second quarter ended July 30, 2021.
“SAIC took meaningful steps forward in the second quarter across many strategic, financial and operational areas. Our quarterly results reflect increased organic growth and a second straight quarter of record profitability,” said SAIC CEO Nazzic Keene. “We are proud of our accomplishments – while remaining ever vigilant in driving performance into the future. We added strategic components to the portfolio through the acquisitions of Halfaker and Associates and Koverse, increasing market access in health IT and artificial intelligence.”
Second Quarter Summary Results
Revenues for the quarter increased $72m, or 4.1%, compared to the same period in the prior year quarter primarily due to ramp up on new and existing contracts, net favorable changes in contract estimates, and the accelerated amortization on certain off-market liability contracts, partially offset by contract completions. Adjusting for the impact acquired revenues and divested revenues, revenues grew 3.8% primarily due to net increases in program volume and new awards. We estimate the second quarter program impact from the COVID-19 pandemic to be approximately $36 m, primarily driven by reduced volume in our supply chain business.
Operating income as a percentage of revenues of 7.2%, increased from 5.7% in the comparable prior year period primarily due to improved profitability across our contract portfolio, net favorable changes in contract estimates, the accelerated amortization on certain off-market liability contracts, and decreased intangible amortization, partially offset by gains related to the resolution of certain legal and other program contract matters in the prior year.
Adjusted EBITDA(1) as a percentage of revenues for the quarter increased to 10.1% of revenues from 9.5% of revenues in the prior year quarter primarily due to improved profitability across our contract portfolio, net favorable changes in contract estimates and the accelerated amortization on certain off-market liability contracts, partially offset by gains related to the resolution of certain legal and other program contract matters in the prior year. We estimate the second quarter program impact from the COVID-19 pandemic to be approximately $1m of adjusted EBITDA(1).
Diluted earnings per share for the quarter was $1.41 compared to $0.87 in the prior year quarter. Adjusted diluted earnings per share(1) for the quarter was $1.97 compared to $1.63 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 58.4m from 58.6m during the prior year quarter.
Cash Generation and Capital Deployment
Cash flows provided by operating activities for the second quarter were $92m, a decrease of $12m compared to the prior year quarter, primarily due to the prior year quarter benefiting by approximately $40m from the deferral of payroll taxes as afforded by the CARES Act in response to the COVID-19 pandemic.
Free cash flow(1) for the second quarter which excludes the impact from the MARPA Facility, decreased by $5 m from the prior year quarter to $85 m. The prior year quarter benefited by approximately $40 m from the deferral of payroll taxes as afforded by the CARES Act in response to the COVID-19 pandemic.
During the quarter, SAIC deployed $310m of capital, consisting of $244m for acquisitions, $37m of plan share repurchases, $22m in cash dividends, and $7m of capital expenditures. In addition, SAIC made $22m of mandatory debt repayment in the second quarter.
Quarterly Dividend Declared
Subsequent to the end of the quarter, the Company’s Board of Directors declared a cash dividend of $0.37 per share of the Company’s common stock payable on October 29, 2021 to stockholders of record on October 15, 2021. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.
Backlog and Contract Awards
Net bookings for the quarter were approximately $1.6bn, which reflects a book-to-bill ratio of 0.9 and a trailing twelve months book-to-bill ratio of 1.6. SAIC’s estimated backlog at the end of the quarter was approximately $24bn. Of the total backlog amount, approximately $3.3bn was funded.
SAIC was awarded the following contracts during the quarter:
Notable New Business Awards:
U.S. Space and Intelligence Community: SAIC was awarded $664 m of contract awards by space and intelligence community organizations, including a program providing digital and systems engineering solutions for intelligence and defense agencies worth $355m. Most of these contracts serve customers in the intelligence community and classified space domain that rely on SAIC for highly-specialized expertise in digital engineering as well as cloud, artificial intelligence, cybersecurity, technology integration, engineering, IT modernization and mission operations.
U.S. Air Force: SAIC was awarded a contract worth up to $90m by the U.S. Air Force Life Cycle and Management Center to mitigate small unmanned aircraft systems (sUAS) threats and protect U.S. forces. Under the contract, SAIC will provide a broad range of integrated logistics support and sustainment services necessary to modernize defenses against the rapidly evolving threat of sUAS. The single-award contract has a one-year base period of performance with three one-year options.
Notable Recompete Awards:
U.S. Defense Information Analysis Center: SAIC was awarded a recompete task order, valued at $126m over a five-year period of performance to continue providing research and development for modeling and simulation enhancements in support of the U.S. Army Combat Capabilities Development Center (DEVCOM) Ground Vehicle Systems Center (GVSC).
U.S. Navy: SAIC was awarded a five-year, $85m contract to continue to provide software engineering, cloud migration, DevSecOps, and cyber support to the U.S. Navy’s Joint Expeditionary Command and Control (JEXC2) family of systems.
Other Notable News
Launch of CloudScendTM: As previously announced, SAIC launched CloudScendTM a cohesive solution of integrated platform automation tools, security protocols and processes to help federal agencies plan for and accelerate the migration of large-scale workloads to the cloud and innovate further once they are migrated. CloudScend leverages SAIC’s deep experience in helping government organizations obtain the benefits of the cloud to determine the best way to prioritize the migration of strategic workloads. The comprehensive framework enables agencies to map requirements to mission needs and achieve a clear view of their path to the cloud with detailed insights and a proven methodology.
Fiscal Year 2022 Guidance
As a result of the Company’s year-to-date performance and future expectations, including expected impacts from the COVID-19 pandemic, the Company is updating previously provided fiscal year 2022 guidance. The guidance assumes expected negative COVID-19 impact of approximately $125m in revenue and approximately $10m in adjusted EBITDA. The guidance also assumes that support currently provided under Section 3610 of the CARES Act continues through the end of fiscal year 2022 (January 28, 2022). The table below summarizes fiscal year 2022 guidance and represents our views as of September 2, 2021. (Source: BUSINESS WIRE)
03 Sep 21. SAIC (SAIC) BUY, $84.12 PT: $105.00. SAIC reported FQ2:22 EPS of $1.97 vs. our est./cons. of $1.44/$1.47. Revs increased 4.1% y-o-y and were 3% above our forecast. Organic growth was 3.8%. Adj. EBITDA margins of 10.1% were 180 bps ahead of our estimate of 8.3%. Compared to our estimates, GAAP EBIT was $0.35 better with taxes a modest headwind. EPS guidance was raised by 5% to $6.50-$6.70 vs. our est./cons. of $6.50/$6.53.
Insights
FY22 EPS Guidance Raised by 5% at the Midpoint to a Range of $6.50-$6.70 (vs. Cons. of $6.53, and $6.15-$6.40 prior). Mgmt. expects FY22 sales of $7.30-7.40bn (vs. prior guidance of $7.15-7.30bn), incorporating a COVID impact of $125m in sales (down $25m from previous) coupled with the addition of $100MM of revenues from Halfaker & Associates. Revenue guidance implies 3% growth in H2 at the midpoint, with organic revenue flat. The midpoint of revenues of $7.35bn compares to our est./cons. of $7.33bn/$7.33bn, which had incorporated Halfaker.
Q2 Revenue Performance was 3% Above Our Expectations. Revenues of $1.836bn in FQ2 grew 4% y-o-y and were 3% above our $1.783MM estimate. Revenue grew 3.8% organically, which came in above our estimate for 0.5% organic growth. Contribution from Halfaker was in the ~$5m range vs. our est. of $10m (closed July 2021). SAIC absorbed a COVID impact of $36m, or 2 pts, in Q2, primarily tied to the supply chain business.
SAIC reported 0.9X B2B for FQ2:22 and TTM B2B of 1.6X. Net bookings of $1.6BB in the quarter included $664m of awards from space and intelligence community organizations, including a $355m program providing digital and systems engineering for intelligence and defense agencies. The company also won a $90m award from the USAF Life Cycle and Management Center to mitigate small UAS threats. SAIC ended Q2 with a backlog of $24bn, including funded backlog of $3.3bn. Backlog was up 25% y-o-y, mostly due to unfunded backlog, which stepped up 29%.
Profitability Ahead Driven by Contract Profitability and Changes in Estimates. Adj. EBITDA margins of 10.1% expanded by 60 bps y-o-y and came in sharply above our expectations of 8.3%. The delta was largely driven by net favorable changes in contract estimates, the accelerated amortization on certain off-market liability contracts, and decreased intangible amortization, with improved profitability across the contract portfolio another driver. The COVID impact was largely immaterial at $1m. EBITDA margin guidance for FY22 was raised to 8.9-9.0% from 8.7-8.8% prior (vs. cons. 8.9%) and H1 margins of 9.9% implying a steep H2 deceleration.`
Solid FCF with 109% Conversion YTD. FQ2 FCF ex-MARPA represented $85m, or 74% conversion to Adj. NI, which compares to $90MM a year ago. YTD FCF of $249MM totals 55% of our FY22 estimate of $450MM and is 109% conversion of Adj. NI. FCF ex-MARPA guidance was maintained at $430-470MM despite the rise in income statement guidance. SAIC repurchased $38MM of shares in FQ2 ($91m YTD). We assume $220m of debt pay down in FY22 with $61m paid down YTD. (Source: Jefferies)
02 Sep 21. Wolfpack receives $500k grant to support Aussie startups. Wolfpack Space Hub, a company that supports Australian space start-ups, has received $500,000 in funding to continue growing its “pack” network.
The investment to the Sydney-based company, a joint collaboration of Saber Astronautics and TCG, forms part of the Entrepreneurs Australia incubators grant.
Saber’s CEO Dr Jason Held said Wolfpack is “a different program from anything you’ve seen in Australia”.
“Many excellent incubators know how to build downstream services start-ups, and that is good business for Australia,” he said. “But flight is where you get the best advantage because you get to own the supply. Those who build the road set the toll.”
Compared with other companies, Wolfpack connects Australian manufacturers to step forward together, such as reaching for contracts, grants and relationships with the industry as a “pack”.
Wolfpack will support new ventures planning for orbit with on-site expertise, deep-technical support to fly into space, satellite operations support and manufacturing assistance.
“This is the most inclusive, open, and progressive project we’ve ever done,” said Dr Held.
“Start-ups that would normally compete are instead supporting each other directly – they join each other’s proposals, share information, and help each other out in ways we haven’t seen elsewhere.”
Saber Astronautics manages the mission control center funded by the Australian Space Agency’s Space Infrastructure Fund (SIF) and supplies to the National Space Test Facilities (NSTF).
According to the press release, the Wolfpack Space Hub will seek external technical support “that allow sharing between companies that would normally compete”.
Some of the companies involved include Spiral Blue, a satellite computing company; Delta-V, another start-up support; Sperospace, a robotics manufacturer; and more.
The Morrison government has invested over $700mi into the sector since 2018 in efforts to reach a $12bn industry, expecting to create another 20,000 jobs by 2030.
Australia has slowly increased its space efforts since the establishment of the Australian Space Agency in 2018.
One of the “barriers” of space access according to Wolfpack is “achieving flight”, which has crippled many start-ups to begin, often pivoting to data and sensor companies instead.
As part of its business strategy, Wolfpack only supports Space and tech-manufacturing-heavy companies, excluding UAVs, software-only and data businesses.
“The Wolfpack Incubator is focused on upstream space companies, both civil and defence, where manufacturing is needed and not available elsewhere,” it added.
Wolfpack Space Hub has launched at a time when other companies are also pursuing this business strategy, such as Microsoft’s Azure Space.
But the company said while it is following the footsteps of other successful brands, Wolfpack provides support “not found in traditional a start-up house”. (Source: Space Connect)
02 Sep 21. UK Government to completes acquisition of Sheffield Forgemasters International Limited. The Ministry of Defence (MOD) launched an offer to acquire Sheffield Forgemasters International Limited (SFIL), allowing HM Government to refinance the company and secure the supply of components for the MOD’s critical existing and future UK defence programmes in July.
The MOD also intends to invest up to £400m for defence critical plant, equipment and infrastructure into SFIL over the next 10 years to support defence outputs. The acquisition has been assessed as the best value for money for the taxpayer due to the unique capabilities and circumstances. The immediate cost of the acquisition is £2.56m for the entire share capital of the company plus debt assumed.
SFIL is the only available manufacturer with the skills and capability to produce large scale high-integrity castings and forgings from specialist steels in an integrated facility to the highest standards required for these programmes. Furthermore, SFIL’s ownership will not prevent other UK based manufacturers bidding for MOD contracts, which will continue to be run in an open and fair competition.
The MOD has already started working closely with the company to implement best practice governance that will ensure appropriate financial oversight to secure the company’s future success, with the aim eventually to return the business to the private sector.
Following the announcement on 28 July that Ministry of Defence had launched an offer to acquire Sheffield Forgemasters International Limited, the acquisition was successfully completed on 19 August. This secures the supply of components for the MOD’s critical existing and future UK defence programmes. (Source: https://www.gov.uk/)
02 Sep 21. Ricardo: the reformed petrolhead. ‘Green’ transport offers automotive consultancy Ricardo as many opportunities as those it is losing.
Bull points
- The opportunities of ‘net zero’
- Order book stays strong
- Finances not in doubt
Bear points
- Decline of internal-combustion engines
- Uncertainty about new chief executive’s plans
A company that supplies the transmission set-up for the world’s fastest production car – powered, it almost goes without saying, by an internal-combustion engine – should not revel in the prospect of a world with net-zero carbon emissions. And it’s true, it might be an exaggeration to say Ricardo (RCDO) ‘revels’ in the demise of petrol-driven autos (or diesels). But a greener world isn’t short of opportunities for the Sussex-based consultancy.
Ricardo’s bosses make much of the group’s green credentials. Flick through the latest annual report and you would be hard-pressed to guess the group still derives much of its revenue and profit by catering to the demands of petrolheads. However, as the table for divisional breakdown shows, in 2018-19, the most recent ‘normal’ year, its performance products division generated 25 per cent of the group’s £384m of revenue and almost the same proportion of its £43m operating profit before central costs. And even by 2022-23, according to estimates from broker Investec, the division will still be producing over 20 per cent of both group revenue and profit, designing and making niche components such as engines and transmissions for the likes of McLaren, Aston Martin and Bugatti (the maker of that ridiculously fast car).
In addition – and almost by definition – the group’s biggest division, both by revenue and profit, automotive and industrial, generates much of its revenue from consultancy relating to burning carbon fuels. All of which should not be surprising for a company formed way back in 1915 by the original petrolhead, Harry Ricardo, an Edwardian gent who, after education at Rugby and Trinity College, Cambridge developed an obsession with making the internal-combustion engine work more efficiently.
Times change, however, and, although the forthcoming demise of carbon-burning engines may be greatly exaggerated, the group’s focus is much more on those green credentials. So the auto and industrial division is also about “ending range anxiety for electric-vehicle drivers”, says the latest annual report. Meanwhile, the group’s small, but hopefully fast-growing, energy and environment division will help with solutions for high-capacity charging of those self-same vehicles and, down on the farm, will help calculate audit trails for greenhouse gas emissions (and removals) from, as it were, farm to fork.
A little less green, but no less important, the rail division is involved in certification for Europe’s biggest signals replacement programme, currently running in Denmark. In its defense division, which is wholly US-focused (hence the spelling), Ricardo’s major contract is to provide upgraded anti-lock braking systems for the US Army’s so-called high-mobility multi-purpose vehicles, which look much like something out of a sci-fi comic strip.
Pulling all these activities together – and viewing its activities through the lens of ‘environmental, social and governance’ (ESG) – Ricardo says that in 2019-20 over 80 per cent of its revenue was derived from tackling climate change and environment issues either “strongly” or “to some degree”. Put another way, it also says 66 per cent of its revenue was contributed by services that tackle climate change or environmental issues or had environmental benefits.
Sure, there is an element of PR to all this. A company that owes its existence to an activity that, by the 2030s, might be the equivalent of cigarette smoking today will be understandably keen to put itself on the correct side of the all-consuming narrative of our times. But to the extent that the group’s order book is holding up despite the erosion of business related to burning fuels (see Chart 1), management is correcting the loss of direction that Ricardo seemed to suffer in the first half of the 2010s.
That loss of direction is illustrated in Chart 2. Ricardo’s return on equity – a proxy for how well a company uses its capital – has been going more down than up since before the sub-prime mortgage crisis of 2008. It may be no coincidence that, over the same period, the amount that management devoted to research and development (R&D) also fell, at least in relation to sales. Similarly, capital spending, while reasonably consistent as a proportion of sales, was falling more than rising from the mid 2000s onwards.
True, profit margins held up well enough during this period. They peaked at over 10 per cent in each of the three years 2012-13 to 2014-15 and never fell below 7 per cent until 2019-20’s Covid-hit period. Likewise, Ricardo was a steady generator of free cash. But these data also imply a management plan that prioritised each coming year’s results over the longer term. The share price performance indicates that investors caught onto this in mid 2018; after the share price peaked just clear of £10, its fall was dramatic.
However, at 382p and over 60 per cent below the peak, there is a good case for saying the fall has been overdone. Ricardo’s results for the year to end June, to be released on 9 September, will show that the group has matched the City’s – admittedly scaled-back – expectations. Revenue for the year will be much the same as 2019-20’s £350m, feeding through to underlying pre-tax profits in line with analysts’ estimates (ie, around £18m). Obviously, that’s much better than 2019-20’s lossmaking figure but well short of the average Ricardo was clocking up through most of the 2010s.
In terms of revenue growth, the strongest performers were defense (revenue up about 14 per cent), energy and environment (up about 12 per cent) and rail (up 3 per cent). Those segments closely related to Ricardo’s historical automotive consultancy – performance products and automotive and industrial – were the weakest. Performance products was still affected by the Covid-related shutdown in mid 2020 at McLaren Automotive to whom Ricardo supplies engines. Year-on-year revenues at automotive and industrial fell 13 per cent, prompting a divisional reorganisation, which will show up in a one-off charge against 2020-21’s profits. Any doubts about Ricardo’s finances were removed when the company raised £28m via a share placing last November. As a result, year-end net debt was £47m, down from £73m a year earlier.
Meanwhile, brokers Zeus Capital and Investec (advisers to Ricardo) come up with similar valuations for the shares. Applying what it reckons are appropriate multiples to Ricardo’s divisional profits for 2021-22, removing debt and factoring in a 9 per cent discount rate, Investec comes up with a 570p-per-share value. Using a 10-year projection of cash flows discounted to present value at 8 per cent a year, Zeus arrives at 540p.
At 382p, Ricardo’s shares trade at a 30 per cent discount even to the lower value. Meanwhile, in terms of conventional price/earnings ratios, the rating is just 12 times forecast next-12-month earnings (see table), maybe falling when City forecasts are upgraded following next week’s results. That, for instance, is comfortably lower than the average for the FTSE SmallCap index.
Sure, there is the important matter that Graham Ritchie will join Ricardo as chief executive on 1 October following an eight-month search to replace Dave Shemmans, the boss since 2005. The new broom may do a lot of sweeping and, until it becomes clear what gets swept, the shares may mark time. Even so, the downside looks limited. As recovery prospects go, Ricardo, the reformed petrolhead, seems to have miles in the tank. (Source: Investors Chronicle)
02 Sep 21. Gordhan admits no quick fix for Denel. Democratic Alliance (DA) parliamentarian Michele Clarke is a dogged seeker after the truth with specific reference to beleaguered Denel with questions ranging from the number of disciplinary hearings through to the number of Rooivalk helicopters built, profitability and ability to build missiles.
By and large responses to the deputy shadow public enterprises minister from the “keeper” of State-owned companies (SOCs) Pravin Gordhan are couched in bureaucratic-speak. She did, however, elicit a response from Minister Gordhan to the effect there is no “quick fix” to Denel’s problems in the aftermath of State Capture.
He told Clarke a Denel “success” was cumulative cost savings of over a billion Rand between April 2018 and September last week. On the negative side, this saving, the DA parliamentarian heard, was mainly the result of a 27% reduction in employee numbers. She also heard the overall Denel order book currently showed an amount owing of R11.7bn.
This outstanding revenue is a contributor to at least some Denel divisions and associate companies not being able to fully meet salary and employee contractual obligations.
Gordhan told Clarke in a written response that Denel’s liquidity constraints could be ascribed to six issues. They are: insufficient working capital; inability to raise new performance and advance guarantees; non-payment of full salaries to employees impacting on execution; aging plant infrastructure and inability to service and maintain with increased failure leading to increased downtime; a hostile supplier environment due to non-payment of legacy debt and the loss of skills and capabilities.
Additionally what Gordhan terms the “hostile supplier environment” leads to more time spent negotiating with suppliers on payment terms as well as “plans eating into critical delivery times”. Most Denel suppliers demand payment before orders are executed, further exacerbating production.
In response to questions on the SOC’s failure to pay salaries, the company said it “is a case study on what corruption and state capture in particular can do to a once successful business that was a benchmark on governance and performance. This pandemic has made the situation worse with closure of facilities in response to lockdown requirements”.
“Denel is dealing with the root causes of the challenges faced by the entity includiing the impact and consequences of state capture. The process to rebuild Denel is underway. This includes adopting a new business model responsive to changing market conditions to ensure sustainability. Management is in constant engagement with employees to find solutions. The Department (of Public Enterprises) is looking at options of improving liquidity solutions in the short term and strengthening the balance sheet for long term sustainability.”
Denel is implementing its new 5.Y (five year) turnaround strategy, which envisages a leaner organistion with only two operating divisions – Denel Maintenance & Manufacturing and Denel Engineering. In accordance with this model, the number of chief executives and executives will reduce significantly.
Denel made “significant inroads in restructuring the key business initiatives”. Successes include exiting LMT (generating expected annualised savings of R48m); exiting Denel Aerostructures (with expected annualised savings of R260m); exiting “onerous contracts”; reducing operating expenditure by 43% from FY2019/20 to FY20/21 (mainly due to employee attrition and ‘subdued business activity’); and pursuing corruption through the Commission of Inquiry into State Capture and the Special Investigating Unit (SIU).
“Much still needs to be done to reposition Denel and return it to functionality and profitability. A challenging road will have to be traversed to get to this point. Recovery from the huge damage done to institutions by state capture is a challenging task. There is no quick fix in this regard,” according to Gordhan. (Source: https://www.defenceweb.co.za/)
02 Sep 21. Aero Development Japan Raises Series A Funding for Mass-Produced Hybrid Power System for Drones. Aero Development Japan Co., Ltd. has recently raised funds for the Series A round, and has been using the funds to develop gas since its inception. The company has started the development of a mass-produced hybrid power system that combines turbine power and a generator. The company has welcomed Mr. Toyohiko Ota, who has been leading the development of jet and rocket engines at a major Japanese aircraft engine manufacturer in the development of mass-produced aircraft, as CTO. ADJ aims to start selling hybrid power systems and drones equipped with the hybrid power system by 2022, and will start recruiting candidates for collaborative partners in drone services.
- Challenges for the large drone market
Until now, most drones have a total weight of 25 kg or less, and their applications have been limited to surveying, aerial photography, and inspection. Under such circumstances, expectations are rising for the practical application of large drones that enable heavy-duty and long-distance transportation, and for flying cars (hereinafter referred to as “UAM” = Urban Air Mobility), mainly in Europe and the United States. The trend has spread to Japan, and it is said that in 2022, legislation will be developed at once to realize the flight of large drones over non-visual and manned areas.
On the other hand, the power source is said to be the bottleneck for the practical application of large drones. Most existing drones use lithium-ion batteries, but the current lithium-ion battery’s power generation per unit weight (kWh / kg) is not large enough for large drone applications, and we are trying to extend the flight time. Then, the payload (loading weight) becomes smaller, and if you try to make the payload larger, the flight time will become shorter. In order for heavy drones to fly for a long time, it is required to develop a power source that generates more electricity per unit weight.
- ADJ hybrid power unit and the reason for its founding
Therefore, ADJ is developing a hybrid power unit that combines a gas turbine and a small generator. This approach of driving the generator by rotating the gas turbine at high speed (90-100,000 revolutions per minute) can increase the amount of electricity generated per unit weight. It is calculated that the ADJ hybrid power unit can exceed 1kWh / kg, while the amount of power generated per unit weight of a general lithium-ion battery is about 0.2 to 0.25kWh / kg (our estimate). We aim to achieve both flight time and payload with the amount of power generated per unit weight, which is about five times that of a lithium-ion battery.
The founding of ADJ was triggered by Tanabe, the representative of the Bank of Japan, who had a sense of crisis in creating Japanese industry while conducting an industrial survey at the Bank of Japan. While Japan has good technologies that shine brightly in various places, I felt a sense of crisis in the reality that a major industry that would become a pillar of the country has not been created since the automobile industry. While conducting various surveys, he realized the growth potential of the large drone market and the need for technological innovation in the power source part, and founded ADJ with all his might. From its founding to the present, we are advancing technological development and business development while running around Japan.
- About the invitation of Mr. Ota and the start of development of mass-produced hybrid power system
Since its founding, ADJ has been developing prototypes of hybrid power systems, but in June 2021, a hybrid power unit combining three Austrian 10kW gas turbines and a generator, and a motor for a propeller compatible with AC200V high voltage. Conducted a levitation test of a drone with a total weight of approximately 80 kg equipped with a hybrid power system that combines ESC. We have successfully confirmed the levitation performance and succeeded in developing a prototype.
Aiming for domestic mass production of the hybrid power system that has succeeded in developing a prototype, we will promote the original development of a gas turbine generator, which is indispensable for achieving the target power generation amount of 1 kW / kg per unit weight. Invited Mr. Ota, who has design technology for high-speed rotating aircraft, as CTO in development. We have started the development of an actual machine for mass production, which is superior in power generation per unit weight and durability compared to the prototype. CTO Ota has a remarkable track record in the aerospace field, such as the development of turbopumps for the H-II rocket engine, and has a strong network with aerospace-related business companies.
Utilizing the knowledge of CTO Ota and the know-how cultivated in the development of prototypes, the team will work together to develop mass-produced hybrid power systems and hybrid power drones by the end of 2022. increase.
The target specifications of mass-produced machines are assumed to be as follows.
・ Total takeoff and landing weight: 150kg
・ Payload: 50kg
・ Flight time: 1 hour
(Source: UAS VISION)
02 Sep 21. Melrose Industries PLC today announces its interim results for the six months ended 30 June 2021 (“the Period”).
Group
- Melrose is trading ahead of expectations, with better profit margins, better earnings per share and significantly lower net debt2; building the Group’s encouraging momentum
- The commitment, made on acquisition by Melrose, to improve significantly the funding of the GKN UK defined benefit pension schemes has been delivered ahead of schedule with the funding position of the schemes transformed for the better. The funding deficit of approximately £1bn has currently reduced to approximately £150m. Consequently the annual contribution halves to £30m with no ongoing requirement to contribute from future disposal proceeds
- Net debt2 at 30 June 2021 was significantly lower at £300m; proforma net debt2 at 30 June 2021 is £1,029m after adjusting for the announced Return of Capital to be settled on 14 September 2021 (1.5x proforma leverage2)
- Free cash flow2 generation in the first half was £75m; all the investment in restructuring costs, capital expenditure and sustainable technology has been self-funded from trading cash flows in the Period
- The Group recorded an adjusted2 earnings per share of 2.2 pence. Adjusting for the accretion post the announced Return of Capital and share consolidation, the Proforma EPS2 increases to 2.5 pence. The statutory loss per share was 3.1 pence
- The Nortek Air Management and Brush disposals both completed in the Period and Melrose has exchanged contracts for the sale of Nortek Control for $285m, all of which are consistent with doubling shareholders’ money, or more, on each acquisition
- On 14 September Melrose is returning £729m, 15 pence per share, to shareholders. In addition, the Melrose Balance Sheet has spare capacity for a significant further Capital Return next year
- An interim dividend of 0.75 pence per share (2020: nil) is declared
Businesses
- Melrose businesses own world-leading sustainable technology which provides customers with solutions to significantly reduce their impact on the environment
- All businesses improved their adjusted2 operating margin in the Period compared to 2020 full year: Aerospace by +2.9 ppts; Automotive by +4.0 ppts; Powder Metallurgy by +6.9 ppts; and Ergotron by +0.8 ppts. Automotive and Powder Metallurgy are ahead of plan on their restructuring projects
- Aerospace is well positioned on many significant platforms; the civil aerospace business is now weighted more towards the faster narrowbody recovery and Defence demand remains strong. As previously indicated, significant restructuring is ongoing
- Automotive is well placed to benefit from the transition to electric vehicles. In the first half of this year over one third of new business bookings awarded were for pure electric platforms, over 50% if full hybrid platforms are included. Additionally, during the last 18 months Automotive has been awarded six major eDrive programmes for global and Chinese vehicle manufacturers. Automotive should grow at more than double the rate of light vehicle production over the long-term
- Powder Metallurgy is making clear market share gains, growing revenue at 43% in the first half, and with close to 70% of the business achieving more than 14% adjusted2 operating margins
Justin Dowley, Chairman of Melrose Industries PLC, today said: “We are continuing to see recovery in all our businesses with trading ahead of expectations. Encouragingly, our Aerospace business is now weighted towards the expected narrowbody recovery. Our Automotive and Powder Metallurgy businesses are poised for strong growth as soon as the well publicised chip shortage abates and the progression in margins is ahead of plan with more to come. As with all its promises, Melrose has delivered its acquisition funding commitment to GKN pensioners early. We have scope on our balance sheet to return more money to shareholders next year and we are excited by the upcoming possibilities.”
01 Sep 21. Genesis Park Acquisition Corp. and Redwire Announce Shareholder Approval of the Business Combination.
Expected Closing Date of September 2, 2021.
Combined Company Expected to Begin Trading on NYSE Under Ticker Symbols “RDW” and “RDW WS”, Respectively, on September 3, 2021.
Genesis Park Acquisition Corp. (“GPAC”) (NYSE: GNPK), a U.S. publicly-traded special purpose acquisition company, and Redwire, LLC (“Redwire” or the “Company”), a leader in mission critical space solutions and high reliability components for the next generation space economy, announced that at GPAC’s extraordinary general meeting held today (the “Extraordinary General Meeting”), GPAC’s shareholders voted to approve the previously announced proposed business combination between GPAC and Redwire (the “Business Combination”), as well as all other proposals related to the Business Combination. Approximately 97% of the votes cast at the meeting, representing approximately 73% of GPAC’s outstanding shares as of the record date, voted to approve the Business Combination.
GPAC plans to file the results of the Extraordinary General Meeting, as tabulated by an independent inspector of elections, on a Form 8-K with the Securities and Exchange Commission (the “SEC”) today.
Based on today’s shareholder approval and subject to the satisfaction or waiver of certain other closing conditions as described in the GPAC definitive proxy statement/prospectus, the Business Combination is expected to be consummated on or about September 2, 2021. Following the consummation of the Business Combination, the combined company will operate as Redwire Corporation and its shares of common stock and warrants are expected to trade on the New York Stock Exchange beginning on September 3, 2021 under the symbols “RDW” and “RDW WS,” respectively.
About Redwire
Redwire is a leader in mission critical space solutions and high reliability components for the next generation space economy, with valuable IP for solar power generation and in-space 3D printing and manufacturing. With decades of flight heritage combined with the agile and innovative culture of a commercial space platform, Redwire is uniquely positioned to assist its customers in solving the complex challenges of future space missions. For more information, please visit www.redwirespace.com.
About GPAC
Genesis Park is a publicly traded special purpose acquisition company sponsored by an affiliate of Genesis Park, trading on the NYSE under the ticker symbol NYSE: GNPK. GNPK is one of the first aerospace and aviation services special purpose acquisition companies, and may pursue an initial business combination in any industry or geographic region, but specifically seeks to capitalize on the operational and investment experience of the GNPK management team and Board of Directors by focusing on companies that have significant growth prospects in the aerospace and aviation services sector. (Source: PR Newswire)
01 Sep 21. Lockheed’s Aerojet deal gets support from 13 members of Congress – letter. A bipartisan group of 13 members of the U.S. Congress sent a letter to the Pentagon supporting Lockheed Martin’s (LMT.N) proposed acquisition of rocket engine maker Aerojet Rocketdyne (AJRD.N), according to the letter seen by Reuters.
Shares of Aerojet rose more than 2% after the Reuters report as investors cheered congressional support for a deal that has run into headwinds among some lawmakers.
In July, U.S. Senator Elizabeth Warren asked the Federal Trade Commission to take a tougher look at defense industry mergers, questioning Lockheed Martin’s plan to buy the biggest independent maker of rocket motors, Aerojet Rocketdyne Holdings. read more
The Aug. 31 letter sent to Deputy Secretary of Defense Kathleen Hicks said it was in “both our national security interests and the U.S. taxpayer’s best interest to approve this proposed acquisition.”
The lawmakers said Northrop Grumman’s (NOC.N) 2018 purchase of rocket engine maker Orbital ATK upset the structure of the rocket engine marketplace and a Lockheed deal would restore equilibrium.
“The only reasonable assurance we have that the American rocket propulsion manufacturing sector remains strong and has at least two well-resourced merchant suppliers for all defense and space propulsion products is to approve the merger with Lockheed,” the letter said.
Lockheed announced a $4.4bn agreement to buy Aerojet late last year, but the deal has raised eyebrows because it would give Lockheed – the No. 1 defense contractor – ownership of a vital piece of the U.S. missile industry. Aerojet motors are used in everything from the homeland missile shield to Stinger missiles. Lockheed has said Aerojet Rocketdyne would continue to supply the entire defense industry, a premise met with skepticism by Raytheon Technologies (RTX.N), a major customer for rocket motors. A Lockheed spokesperson said the company is expecting the deal to buy Aerojet to close by year-end. (Source: Reuters)
01 Sep 21. Sale of Babcock Oil and Gas aviation business. Babcock, the international aerospace, defence and security company, has completed the sale of its Oil and Gas aviation business to CHC Group, LLC (CHC) for a cash consideration of £10m.
The Oil and Gas business, which is part of the Group’s Aviation sector, provides offshore oil and gas crew transportation services in the UK, Denmark and Australia. It is headquartered in Aberdeen, UK, and employs over 500 people and operates around 30 aircraft across its three locations.
For the year ending 31 March 2021, it had revenue of £154m, a loss before tax of £2 m and underlying operating profit of £2m. As of 31 March 2021, it had gross assets of £256m, net assets excluding cash of £21m and net lease liabilities of £142m.
The sale is part of Babcock’s targeted disposal programme, which aims to generate at least £400 m of proceeds. Proceeds from this transaction will be used to reduce net debt.
The agreement constitutes a class 2 transaction for the purposes of the UK Financial Conduct Authority’s Listing Rules, and as such does not require Babcock shareholders’ approval.
Babcock CEO David Lockwood said, “This disposal is part of our plan to streamline and focus the group on our key markets. Divesting at least £400m of businesses will enable us to reduce complexity and increase our focus as we return Babcock to strength. The oil and gas aviation business has found a new home and we wish them all the best for the future.”
31 Aug 21. Willard Marine, Inc. Secures $25m Funding Commitment from GEM. Willard Marine, Inc. announced that it has signed an agreement with GEM Global Yield LLC SCS (“GGY”), the Luxembourg-based private alternative investment vehicle providing Willard Marine with a Share Subscription Facility of up to $25m for when it goes public. Willard Marine will control the timing and maximum number of drawdowns under this facility and has no minimum drawdown obligation.
Willard Marine, Inc. (Willard) has partnered with tech industry leaders in alternative fuel propulsion, autonomous navigation, and renewable materials to develop the next generation of small boats for the military and other critical-use markets.
“GGY’s investment facility strengthens Willard’s immediate and long-term financial goals and reinforces its ability to rapidly accelerate our continued growth,” said Jordan Angle, second-generation CEO of Willard. “We are excited to build on Willard’s 65-year track record of innovation with the development of green and autonomous small boats, for use in the military, commercial, and leisure markets. The company plans to go public through either a merger with a Special Purpose Acquisition Company (SPAC), reverse merger or direct listing on the NASDAQ.” (Source: UAS VISION)
30 Aug 21. Collins Aerospace to Acquire Flightaware. Collins Aerospace, a Raytheon Technologies business (NYSE: RTX), has signed a definitive agreement to acquire privately held FlightAware, a leading digital aviation company providing global flight tracking solutions, predictive technology, analytics and decision-making tools. Closure of the acquisition is subject to the completion of customary conditions and regulatory approvals. Following closing, FlightAware will join Collins’ Information Management Services portfolio within the company’s Avionics strategic business unit. Financial terms of the agreement were not disclosed.
“Global connectivity now shapes and impacts every segment of aviation. FlightAware is the recognized leader in data collection, analytics and customer experience, which will help Collins unlock the full power of the connected ecosystem for our customers,” said Dave Nieuwsma, Collins Aerospace’s head of Avionics. “FlightAware’s flight tracking and data platform, the largest in the world, has the potential to deliver new capabilities and innovations across our entire business.”
“The world’s aerospace companies and aircraft operators are looking to digital aviation to provide the next revolution in aviation efficiency and reliability,” said Daniel Baker, CEO of FlightAware, “and we are excited to join Collins Aerospace and Raytheon Technologies at this pivotal time to continue to lead that revolution at an even broader scale.”
31 Aug 21. Mission Ready Highlights Q2 Financial Results and Provides Corporate Update in Live Event. Mission Ready Solutions Inc. (“Mission Ready” or the “Company”) (TSX-V: MRS) (OTCQX: MSNVF), a provider of comprehensive government contracting solutions, recently released its second quarter 2021 (“Q2 2021”) financial statements for the three and six months ended June 30, 2021.
The following are highlights of the six months ended June 30, 2021 (all dollar figures are quoted in Canadian dollars unless otherwise noted):
- Gross Revenues of $78.73m (an increase of $36.43m from the same period in 2020)
- Gross margin of 7.98%
- Decrease in Operating Expenses of 5% (as compared to 13% from the same period in 2020)
- Net Income of $2.87m (an increase of $4.52m from a net loss in the same period in 2020)
- Adjusted EBITDA was $4.97m (an increase of $4.15m from the same period in 2020)
- $7.1m Working Capital improvement from year-end
- Cash and Cash Equivalents of $4.4m
“Q2 financials have once again showcased our ability to improve our ratios, decrease expenses and bring in additional revenues that ultimately resulted in better cash on hand and overall financial strength,” said Buck Marshall, President and CEO of Mission Ready. “Mission Ready’s revenue streams such as GSA schedules, innovation, manufacturing and distribution capabilities continue to bring consistent revenues that form the core of our business.”
A copy of the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2021, and the associated Management’s Discussion and Analysis (“MD&A”) are available on www.sedar.com under the Company’s profile and on Mission Ready’s website.
Marshall also provided a live corporate update to investors and shareholders, highlighting the milestones achieved and offered his overview of upcoming catalysts.
“Part of the expansion of our revenue streams lies in leveraging and maximizing our resources as best we can, our cut and sew capabilities being a prime example that opens OEM manufacturing opportunities,” said Marshall. “We are shifting from being a company reacting to opportunities to being proactive and creating opportunities as we continue looking for force multipliers.”
The presentation is available on Mission Ready’s YouTube channel and the Company’s website at MRSCorp.com.
About Mission Ready Solutions Inc.
Mission Ready specializes in providing comprehensive government contracting solutions through its privileged access to a host of federal contracting vehicles, including Multiple Award Schedule (“MAS”) contracts awarded and administered by the United States General Services Administration (“GSA”).
Mission Ready’s wholly-owned subsidiary, Unifire, Inc. (“Unifire”), is a designated Small Business and an industry-leading manufacturer and distributor of over 1.5 million military, fire and first-responder products. With extensive knowledge and experience in providing turnkey solutions to the United States Federal Government, Unifire utilizes its time-proven industry relationships and proprietary technology infrastructure to efficiently source and deliver critical, life-saving products in cooperation with government program managers, military and federal contracting offices, base supply centers, and other federal, state and local supply agencies. (Source: PR Newswire)
01 Sep 21. Sagetech Avionics Receives $12m Investment. Sagetech Avionics Inc., an innovative technology company providing industry-leading avionics solutions for Uncrewed Aerial Systems (UAS), announced recently that the company received a $12m investment from Due West Partners, a Seattle-based private investment firm.
The investment will enable acceleration of Sagetech’s product roadmap, specifically UAS Detect and Avoid (DAA) capability and other related technologies. Terms of the transaction were not disclosed.
“We are excited to partner with Due West Partners” stated Tom Furey, CEO of Sagetech Avionics. “Their experience in scaling aerospace companies and deep network of experts in the Defense and Aerospace ecosystem will provide substantial benefits to Sagetech as we continue our growth in the exciting UAS and Advanced Air Mobility (AAM) markets. Sagetech is honored that Due West recognizes the strength in our market position and the future value of our technology roadmap, and we are looking forward to a lasting and mutually beneficial relationship.”
Sagetech Avionics provides the most advanced technology core for type certifiable detect and avoid systems for UAS. With this investment, Sagetech will expand their Engineering and Go-To-Market teams in order to support the growing demand for DAA and other situational awareness solutions worldwide.
“Sagetech combines a unique blend of advanced situational awareness solutions, which are crucial to unlocking the future potential of the UAS and AAM markets, with an unmatched history of providing reliable miniature avionics for use in the US Department of Defense,” said Nick Wellmon, Managing Partner of DWP. “Proven technologies and customer credibility plus significant market potential create a very exciting opportunity.” “Situational awareness products are required technology for safe integration of crewed and uncrewed vehicles into managed airspace, and Due West Partners is pleased to support a company helping customers overcome these challenges,” said Robert Dickinson, Managing Partner of DWP. (Source: UAS VISION)
31 Aug 21. Houlihan Lokey Advises MCR. Houlihan Lokey is pleased to announce that MCR, LLC, has been acquired by Arlington Capital Partners. The transaction details were not disclosed.
Headquartered in McLean, Virginia, MCR is a highly innovative provider of integrated program management, specialized engineering, and DevOps + Agile solutions to mission-critical U.S. defense and intelligence agencies, NATO, and European ministries. The company possesses deep domain expertise in joint/all-domain C4ISR, space superiority, global command and control, and agile software factories. The company delivers its solutions and services through its technology-transformed platform, CommandEdge, providing mission-enabling capabilities and support focused on ensuring defense superiority in land, sea, air, and space domains.
Arlington Capital Partners is a Washington, D.C.–based private equity firm that is currently investing out of Arlington Capital Partners V, LP, a $1.7bn fund. The firm has managed approximately $4.0bn of committed capital via five investment funds. Arlington is focused on middle-market investment opportunities in growth industries, including aerospace and defense, government services and technology, healthcare, and business services and software.
This transaction underscores the strong resilience of the defense and government market and demonstrates the strong market for companies exhibiting differentiated capabilities in highly prioritized domains, solutions-oriented deliverables, and strategic customers and geographies.
Houlihan Lokey served as the exclusive financial advisor and assisted in marketing, structuring, and negotiating the transaction on behalf of MCR.
Houlihan Lokey’s Aerospace, Defense & Government (ADG) practice within the global Industrials Group is a leading M&A advisor to aerospace, defense, and government services companies. Since 2020, the team has closed more than 35 transactions worth nearly $8bn in enterprise value. With a staff of approximately 30 investment bankers in Washington, D.C., London, and Los Angeles, Houlihan Lokey’s ADG practice is among the largest dedicated industry banking groups worldwide. In 2020, the Industrials Group was once again ranked as the No. 1 M&A advisor for all U.S. industrial transactions, according to Refinitiv.
30 Aug 21. Rolls-Royce investor Causeway Capital calls for board refresh – FT. Rolls-Royce (RR.L) shareholder Causeway Capital Management has called on the British engine-maker’s incoming chair to refresh the board, the Financial Times reported.
“I really believe the board needs some fresh thinking. The company is facing some challenges,” Jonathan Eng, portfolio manager at Causeway Capital Management, told the Financial Times in an interview.
The California-based investment group is Rolls-Royce’s second-largest shareholder with an about 7% stake, behind Capital Research Global Investors which owns about 9%, as per Refinitiv data.
Causeway Capital could not be immediately reached by Reuters for a comment.
“We regularly review the effectiveness, composition and skillset of our Board, using independent advice and benchmarking,” a spokesperson for Rolls-Royce told Reuters.
Rolls-Royce said in June that Anita Frew would succeed Ian Davis as chair on Oct. 1. Frew, who would become the first woman to chair the company, will take over at a time when the British firm is undertaking cost-cuts and asset sales to repair its finances. read more
Revenues at Rolls’ civil aviation unit, its biggest business, tumbled as airlines stopped flying last year, resulting in a perilous few months before the company raised more cash and secured loans. read more
Rolls-Royce also needed to make sure it had the right expertise to tackle the decarbonisation challenge, Eng added. (Source: Reuters)
31 Aug 21. Vector Acquisition Corp.’s Rocket Lab Merger Is Approved By The Firm’s Shareholders. Vector Acquisition Corporation (Nasdaq: VACQ) (“Vector”), a publicly traded special purpose acquisition company (SPAC) backed by leading technology investor Vector Capital, has announced that Vector’s shareholders voted to approve the company’s proposed merger with Rocket Lab USA, Inc. (“Rocket Lab” or the “Company”) at the firm’s annual, general meeting of shareholders that was held on August 20, 2021.
Vector also announced that holders of less than 3% of its Class A ordinary shares have properly exercised their right to redeem their shares in connection with the proposed merger. As a result, the gross amount of cash that that the combined company will receive from Vector’s trust account and concurrent PIPE financing upon the closing of these transactions, before transaction expenses, will equal approximately $777m.
The merger is scheduled to close on August 25, 2021, and the common stock and warrants of the combined company, which will be renamed “Rocket Lab USA, Inc.,” are set to commence trading on the Nasdaq Capital Market on August 25, 2021, under the new ticker symbols, “RKLB” and “RKLBW”, respectively.
The formal results of the vote will be included in a Current Report on Form 8-K to be filed by Vector with the Securities and Exchange Commission.
“Rocket Lab has created a sustainable, affordable and innovative path to space, a feat once considered nearly impossible. We look forward to further supporting the Company, which is poised to lead the fast-growing space launch, systems and applications markets,” said Alex Slusky, CEO of Vector and Founder and Chief Investment Officer of Vector Capital. “This is an important milestone for Vector and Rocket Lab, and we are grateful for our shareholders’ overwhelming support as Rocket Lab continues its journey to becoming a public company.”
“This significant milestone accelerates our ability to unlock the full potential of space through our launch and spacecraft platforms,” said Peter Beck, Founder and CEO of Rocket Lab. “With the support of public shareholders, I’m excited to build on our established track record of mission success as we continue to transform the way we use and access space.” (Source: Satnews)
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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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