Sponsored by TCI International Inc.
14 Sep 21. The formal completion of Ernst & Young Australia’s acquisition of SecureWorx will enable the company to offer sovereign cyber capabilities with an accredited Secure Operations Centre (SOC). Further extending the firm’s alliance with Microsoft, the EY Protected SOC will be able to provide clients and Microsoft customers the ability to leverage their existing Microsoft licences to get Protected SOC services and security-checked personnel. The EY Protected SOC has been independently assessed and accredited by the Information Security Registered Assessors Program (IRAP). The EY Protected SOC is a unique way for businesses to increase protection of customer data and save money with automated processes at a time where organisations are looking for accredited onshore cyber capabilities according to Richard Bergman, EY Oceania cyber security lead partner.
“We are really excited to welcome the team from SecureWorx to EY. The combination of Microsoft, EY and SecureWorx will make for a compelling proposition that will help protect the future of critical infrastructure,” Bergman said.
“Large enterprises that are already Microsoft customers can now simplify and rationalise their cyber spend to get significant uplift in capability.”
The EY Protected SOC provides multi-cloud services, managed security operations and security advisory services, designed to cater to the needs of customers with sensitive information.
This includes 24/7 security operations managed services onshore in Australia with government-cleared personnel and certified facilities.
According to Phil Barlow, director partner technology, Microsoft Australia, EY are leaders in delivering cyber capability and has welcomed further collaboration with the multinational professional services network.
“Security concerns are paramount for organisations in all sectors, and the establishment of an EY Protected SOC in Australia will be welcomed by existing Microsoft customers.”
“We are collaborating with EY on their Protected SOC ‘Powered by Microsoft’ offering, which will extend the value for Microsoft clients via an Azure protected technology stack on critical infrastructure in an accredited end-to-end cyber security solution,” Barlow said.
SecureWorx ex-CEO Philip Mulley added that moving forward with EY Australia is an opportunity to evolve from the 24/7 security operations managed services capability into a sovereign cyber security leader. (Source: https://www.cybersecurityconnect.com.au/)
14 Sep 21. Raytheon Intelligence & Space to acquire SEAKR Engineering. Raytheon Technologies (NYSE: RTX) has signed a definitive agreement to acquire privately-held SEAKR Engineering, Inc., a leading supplier of advanced space electronics. Closure of the acquisition is subject to the completion of customary conditions and regulatory approvals. SEAKR Engineering will be a wholly-owned subsidiary of Raytheon Technologies and will report into Raytheon Intelligence & Space upon closing.
“Our investment strategy accelerates our agility in meeting a higher standard of performance ― the space standard ― and expands our core space business with new applications that are shaping our world,” said Roy Azevedo, president of Raytheon Intelligence & Space. “With SEAKR Engineering, we are enhancing our capability to provide qualified systems faster. SEAKR’s culture of forward-thinking innovation will complement our ability to solve our space customers’ hardest problems.”
Based in Centennial, Colorado with more than 540 employees, SEAKR Engineering was founded in 1981 by the Anderson family. Over the last 40 years, the company has delivered more than 300 flight units with a 100% on-orbit success rate.
“SEAKR Engineering is a forward-leaning business with a determined drive to innovate and do the work necessary to make advancements that enable new possibilities in space,” said Scott Anderson, President and Co-Founder, SEAKR Engineering. “Being able to leverage the strengths and expertise of the Raytheon Technologies team, we will have the ability to build on our industry-leading products as part of a larger talented team equally committed to our customers, employees and values.”
Raytheon Intelligence & Space’s and SEAKR’s portfolios are highly complementary, and with RI&S’ support, SEAKR’s deep bench of talent will be even better positioned to drive growth through our robust, combined pipeline of products.
About Raytheon Intelligence & Space
Raytheon Intelligence & Space delivers the disruptive technologies our customers need to succeed in any domain, against any challenge. A developer of advanced sensors, training, and cyber and software solutions, Raytheon Intelligence & Space provides a decisive advantage to civil, military and commercial customers in more than 46 countries around the world. Headquartered in Arlington, Virginia, the business generated $15bn in adjusted pro forma annual revenue in 2020 and has 37,000 employees worldwide. Raytheon Intelligence & Space is one of four businesses that form Raytheon Technologies Corporation.
About SEAKR Engineering, Inc.
SEAKR Engineering, Inc. (SEAKR) is a leading supplier of space qualified state-of-the-art electronics for advanced processors, networked systems, reconfigurable Radio Frequency (RF) and Electro-Optical (EO) payloads, and digital channelizers/beamformers. These systems utilize SEAKR’s Radiation Hardened system By Design (RHBD) techniques that have successfully been deployed in over 300 missions with a 100% on-orbit success rate. Utilizing RHBD techniques, SEAKR leads the industry with some of the highest performance systems that have flown, and with new developments, SEAKR will continue to push these boundaries. SEAKR designs, builds, and tests these systems at their facilities in Colorado.
About Raytheon Technologies
Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses, is headquartered in Waltham, Massachusetts.
14 Sep 21. Boeing forecasts $9trn aerospace market opportunities in commercial, defense and services over next decade.
– Boeing Market Outlook forecasts continued path to long-term growth, with signs of industry recovery
– Over 10 years, the 2021 BMO shows $9 trillion addressable market, up from $8.5trn in 2020
– Increased demand for dedicated freighters, including new and converted
Boeing [NYSE: BA] today released its annual forecast for the commercial, defense and space aerospace market, reflecting signs of the industry’s recovery following the impacts of COVID-19. The 2021 Boeing Market Outlook (BMO) – Boeing’s analysis of long-term market dynamics – states that commercial airplanes and services are showing signs of recovery, while the global defense, space and government services markets have remained stable.
The BMO projects a $9trn market over the next decade for aerospace products and services that Boeing addresses. The forecast is up from $8.5trn a year ago, and up from $8.7trn in the pre-pandemic 2019 forecast, reflecting the market’s continued recovery progress.
“As our industry recovers and continues to adapt to meet new global needs, we remain confident in long-term growth for aerospace,” said Boeing Chief Strategy Officer Marc Allen. “We are encouraged by the fact that scientists have delivered vaccines more rapidly than imaginable and that passengers are demonstrating strong confidence in airplane travel.”
Commercial Market Outlook
The new Commercial Market Outlook (CMO) reflects that the global market is recovering largely as Boeing projected in 2020. Demand for domestic air travel is leading the recovery, with intra-regional markets expected to follow as health and travel restrictions ease, followed by long-haul travel’s return to pre-pandemic levels by 2023 to 2024.
Within the Boeing Market Outlook, the CMO projects 10-year global demand for 19,000 commercial airplanes valued at $3.2 trillion. Boeing’s 20-year commercial forecast through 2040 projects demand for more than 43,500 new airplanes valued at $7.2 trillion, an increase of about 500 planes over last year’s forecast.
In a significant area of growth, projected demand has increased for dedicated freighters, including new and converted models. With sustained demand for air cargo tied to expanding e-commerce and air freight’s speed and reliability, the CMO projects the global freighter fleet in 2040 will be 70% larger than the pre-pandemic fleet.
“The aerospace industry has made important progress in the recovery, and Boeing’s 2021 forecast reflects our confidence in the resilience of the market,” said Stan Deal, president and CEO, Boeing Commercial Airplanes. “While we remain realistic about ongoing challenges, the past year has shown that passenger traffic rebounds swiftly when the flying public and governments have confidence in health and safety during air travel. Our industry continues to serve an essential role of bringing people together and transporting critical supplies.”
Highlights of the new 20-year CMO forecast include:
- The availability and distribution of COVID-19 vaccines will continue to be critical factors in the near-term recovery of passenger air travel. Countries with more widespread vaccination distribution have shown rapid air travel recovery, as governments ease domestic restrictions and open borders to international travel.
- Passenger traffic growth is projected to increase by an average of 4% per year, unchanged from last year’s forecast.
- The global commercial fleet will surpass 49,000 airplanes by 2040, with China, Europe, North America and the Asia-Pacific countries each accounting for about 20% of new airplane deliveries, and the remaining 20% going to other emerging markets.
- Demand for more than 32,500 new single-aisle planes is about equal to the pre-pandemic outlook. These models continue to command 75% of deliveries in the 20-year forecast.
- Carriers will need more than 7,500 new widebody airplanes by 2040 to support fleet renewal and long-term passenger and air cargo demand growth in longer-haul markets. These projections are up slightly compared to 2020 but remain down 8% from 2019.
14 Sep 21. BAE Systems has acquired In-Space Missions, a UK company that designs, builds and operates satellites and satellite systems. The acquisition will combine BAE Systems’ experience in highly secure satellite communications with In-Space Missions’ full lifecycle satellite capability, to make a compelling sovereign UK space offer.
- In-Space Missions was founded in 2015 and is based in Hampshire with more than 30 employees. It specialises in offering space services for activities covering earth observation, satellite communications, navigation, and space science and exploration.
- The company also has an innovative approach to combining satellites into a payload rideshare, allowing multiple payloads to be launched and operated together as one satellite in space. This ‘Faraday Service’ not only reduces cost and time to launch, but also contributes to space sustainability by reducing the number of separate satellites. In-Space Missions launched its first combined satellite in June, carrying six payloads for customers including Airbus, Lacuna, SatixFy and Aeternum, as well as In-Space Missions’ own Babel payload, and continues to operate them in orbit. The Faraday Service also allows for digital payloads to be uploaded to In-Space Missions’ proprietary, software defined, ultra-wideband RF platform – reducing the time to orbit for customers from years to days.
- BAE Systems already provides space products in waveforms, electronics, antenna and digital signal processing and analytics, with 20 years’ experience in ground-based signal processing for various space agencies. In-Space Missions adds the capability to create, launch and operate complete satellites, helping to enable sovereign, secure and resilient data sharing between different platforms in sea, air, land and space.
- Amanda Solloway, Minister for Science, Research and Innovation, said: “This acquisition is a great vote of confidence in our thriving space sector.
- “By bringing on board the expertise of In-Space Missions, BAE Systems will help to expand the UK’s capabilities in low earth orbit satellites, creating valuable export opportunities, while keeping this country at the forefront of a new commercial space age.”
- Ben Hudson, Chief Technology Officer at BAE Systems, said: “The UK has an opportunity to be a global player in the growing low earth orbit space market, as well as servicing its own sovereign defence and commercial needs. This acquisition will allow us to combine a range of space capabilities that help deliver information advantage, multi-domain operations and networking for our customers. We look forward to welcoming the In-Space Missions team to BAE Systems.”
- Doug Liddle, CEO of In-Space Missions, added: “This agreement means In-Space Missions will maintain its small company culture while leveraging the tremendous scale and new opportunities offered by BAE Systems. We’re already collaborating on new highly secure satellite applications and beyond that, we’re really excited about how this agreement will underpin our growth as an ambitious, UK-owned, prime and service provider.”
- This acquisition is part of BAE Systems’ strategy to develop breakthrough technologies, pursuing bolt-on acquisitions where they complement existing capabilities and provide an opportunity to accelerate technology development in key areas, as evidenced with recent acquisitions such as Prismatic, Techmodal and PPM Ltd.
14 Sep 21. Chemring Group PLC (“Chemring” or “the Group”) today issues a scheduled trading update for the period to 13 September 2021.
Trading in the period has progressed as planned despite the challenging environment in which we continue to operate. The outturn for the year ending 31 October 2021 is expected to be in line with the Board’s and current analyst expectations.*
The Group’s order book at 31 August 2021 was £464m (30 April 2021: £450m), providing full visibility for the remainder of the current financial year based on expected delivery schedules. Order cover for FY22 is building, with Countermeasures & Energetics having 67% order cover of expected revenue and the shorter cycle Sensors & Information sector having 45% cover.
We continue to invest in safety, operational excellence, technology R&D, and the modernisation and automation of our manufacturing facilities. This has been funded by continued strong operating cash conversion, with net debt at 31 August 2021 at £38m, (31 October 2020: £48m; 30 April 2021: £39m). We expect to be able to maintain this strong level of operating cash conversion through to year end which will further reduce the net debt level.
Sensors & Information
The period has seen continued strong performance in the Sensors & Information sector, with order intake up 7% compared to the same period last year.
Roke’s information security and technology markets have remained buoyant, with strong customer demand in the national security domain, and good strategic progress made in other areas. Our expectation for the year is that Roke will maintain its recent track record of double-digit growth and strong margins. The acquisition of Cubica on 2 June 2021 has added further market leading capabilities to Roke’s technology portfolio and the integration is progressing well.
We have invested in establishing Roke USA Inc. and are working to secure further orders from our US customers for our Electronic Warfare (“EW”) systems, a number of which are currently on trial with the US Army.
Our US Sensors business continues to perform well, with all our US Programs of Record delivering to plan during the period.
We continue to support the US DoD in their test and evaluation activities as we progress through the Engineering, Manufacturing and Development phases of the AVCAD chemical agent detection, and the sole source JBTDS biological agent detection Programs of Record. The Low Rate Initial Production contract on the Enhanced Maritime Biological Detection program has progressed positively and we expect the customer to award a Full Rate Production contract later this year.
Countermeasures & Energetics
Performance across the Countermeasures & Energetics sector is progressing in line with our expectations.
Our Countermeasures & Energetics businesses continue to work through some Covid-19 (“CV-19”) related challenges associated with the timely completion of customer acceptance tests, supply chain resilience and production workforce resourcing. To date these have not had a material impact on our ability to deliver to customer requirements.
Whilst the process of doing business with government departments has on some occasions slowed as a consequence of the change of administration in the US and the continuation of CV-19 working restrictions, the Countermeasures & Energetics sector received orders totalling £74m in the period from 1 May 2021 to 31 August 2021.
The Tennessee countermeasures manufacturing capacity expansion programme is progressing as planned, with major construction and system commissioning milestones being met. The first incremental revenues from this new facility are expected in the second half of FY22.
Michael Ord, Chief Executive of Chemring, commented: “This has been another busy period in which the resilience of the Group has been further demonstrated. We continue to make good progress against our strategic and operational goals, as such, our expectations for FY21 are in line with current analyst expectations.*
“We have good momentum as we move into FY22. I am confident the focus we have placed on building a high quality, technology-based business will enable us to take further advantage of our increasing opportunities for growth in the coming years and our long-term prospects remain strong.”
14 Sep 21. Chemring plc (CHG LN) BUY, 329.50p PT: 370.00p. Chemring is navigating any challenges it faces well and expects to deliver FY21F EBITA (31st Oct year-end) in line with consensus. There is clear momentum in the higher-margin Sensors & Information division, driven by the Roke business, which plays to our thesis of Chemring’s earnings quality improving. Although an element of the better than expected cash flow will reverse in FY22F, other elements will endure, and this should be well received by the market.
Trading in line with expectations: Chemring expects to deliver FY21F EBITA in line with the current consensus of £57.5m (JEFe £59.6m). Reading between the lines of the release, it seems to us that the higher margin Sensors and Information (S&I) division is faring slightly better than anticipated and Countermeasures and Energetics (C&E) slightly worse. The reason being the latter has more sensitivity to supply chain/labour availability constraints. Within S&I, the Roke business continues to deliver double-digit revenue growth (JEFe 12.5%) and “strong” margins (JEFe 21%). Incremental revenues from the Tennessee capacity expansion remain on track for 2H22.
Order book returns to growth; C&E FY22 revenue cover adequate: There is a welcome return to order book growth, with this standing at £464m (vs £450m at 1H21). Notably, strength in S&I has continued, with orders +7% vs the comparable period last year, having been +12% in 1H. Order book coverage of Chemring’s FY22 revenue expectations in C&E and S&I are 67% and 45%, respectively. For C&E this is down markedly from 82% this time last year. However, that figure was positively distorted by the fact that the order book contained a full year’s worth of F-35 Australian orders. Assuming that the contract is renewed on the same terms prior to its December 2021 expiry, we estimate a more reassuring adjusted backlog cover of c.80%. The S&I cover is in line with last year (47%).
Unexpected drop in ND reflects lower capex and cash tax: Net Debt (incl. IFRS 16) of £38m is surprisingly down from £38.7m at mid-year and is expected to reduce further. This reflects a lower capex run rate due to Covid-19 affecting the pace of projects in Scotland and Norway. This should therefore be offset by higher capex in FY22. On the other hand, the benefits of capex-related tax incentives in the UK and US drive a more value-creating reduction in cash tax (now expected £2-4m vs £7-8m previously).
EMBD moving towards Full Rate Production: Although the company remains somewhat vague on the timing, there appears to be more confidence that the US$100m Enhanced Maritime Biological Detection Program of Record will reach Full Rate Production by end-FY21 than in prior updates (end-FY21/early FY22). We do not believe that this will mark a material shift in revenue from the levels associated with the current Low Rate Initial Production, but it should allow for more extensive order booking.
Valuation still to reflect improved earnings quality: Chemring trades on annualised FY22 EV/EBITA and PER multiples of 14.9x and 18.3x, respectively, which we do not believe adequately reflects the rising weighting of Roke in the EBITA mix and therefore the improvement in earnings quality. (Source: Jefferies)
13 Sep 21. Booz Allen Acquires Tracepoint, Bolstering Market Leadership in Cybersecurity.
- Combination will enable Booz Allen to deliver an unrivaled breadth and depth of cyber services and solutions.
- Tracepoint’s leading DFIR capabilities and extensive customer relationships will complement and scale Booz Allen’s existing commercial portfolio and expand its position in the private sector cyber market.
- Booz Allen intends to integrate Tracepoint and its commercial cyber business in early calendar year 2022.
Booz Allen Hamilton (NYSE:BAH) today announced that it has completed the acquisition of Tracepoint, an industry-leading digital forensics and incident response (DFIR) company serving public and private sector clients. Booz Allen exercised its option to acquire the remainder of Tracepoint’s business after making an initial strategic investment in Tracepoint in January 2021. This transaction is part of a broader capital deployment strategy to accelerate Booz Allen’s entry and advancement in critical technology areas. Terms of the agreement were not disclosed.
Co-founded in December 2019 by Baton Rouge-based Plexos Group, Chris Salsberry, Brett Anderson, and Rob Driscoll and based in Fredericksburg, Virginia, Tracepoint is a recognized leader in DFIR, remediation, and cyber risk and resilience management. Tracepoint brings vast threat intelligence from its experience remediating the most pernicious tactics, techniques, and procedures deployed by advanced threat actors and specializes in helping cyber insurance carriers, lawyers, brokers, and their clients respond to cyber incidents.
Booz Allen intends to integrate its Commercial Cyber business and Tracepoint in early 2022 as part of its long-term growth plan to create a scaled business in three key areas: incident response, enterprise consulting, and managed services. The integration process will focus on creating opportunity and value for both organizations, accelerating growth, and increasing market share while preserving Tracepoint’s competitive agility and continuing to solve the world’s most complex cybersecurity challenges with the best cybersecurity talent.
“We see strong demand and a clear opportunity as organizations and governments around the globe face increasingly sophisticated cyber threats and believe this is the right time for us to further elevate our incident response capabilities and talent; this transaction aligns with that strategic approach,” said Horacio Rozanski, Booz Allen president and chief executive officer.
“Tracepoint has an exceptionally qualified team with strong brand recognition in the DFIR market and extensive relationships in its core sectors to expand our commercial offering and accelerate our growth,” said Bill Phelps, executive vice president and leader of Booz Allen’s commercial business. “We have a proven track record of successful collaboration with Tracepoint and will leverage the complementary strengths of both businesses to cement our status as a leading competitor in the global marketplace. I am excited to begin this new chapter of growth.”
“Today’s announcement is a testament to our team’s exceptional work in building Tracepoint into the industry leader that it is today,” said Chris Salsberry, Tracepoint’s chief executive officer. “Booz Allen has decades of experience working across the most significant breaches and clients and will provide strong foundations from which we can continue to grow and expand our business. We are thrilled to enter the market together as partners.”
Booz Allen retained Goldman Sachs & Co LLC as financial advisor for the transaction and King & Spalding LLP as legal advisor. Tracepoint retained Raymond James & Associates, Inc. as financial advisor and Holland & Knight, LLP as legal advisor.
About Booz Allen
For more than 100 years, military, government, and business leaders have turned to Booz Allen Hamilton to solve their most complex problems. As a consulting firm with experts in analytics, digital solutions, engineering, and cyber, we help organizations transform. We are a key partner on some of the most innovative programs for governments worldwide and trusted by its most sensitive agencies. We work shoulder-to-shoulder with clients, using a mission-first approach to choose the right strategy and technology to help them realize their vision.
With global headquarters in McLean, Virginia, our firm employs approximately 28,600 people globally as of June 30, 2021 and had revenue of $7.9bn for the 12 months ended March 31, 2021. To learn more, visit www.boozallen.com. (NYSE: BAH)
Tracepoint specializes in digital forensics and incident response with a comprehensive portfolio of pre- and post-breach services. Tracepoint’s team of experts has decades of experience helping organizations address cyber incidents, including ransomware, phishing, business email compromise, payment card incidents, and sophisticated trojan and malware attacks. Having investigated some of the most complex and disruptive security incidents, Tracepoint’s deep understanding of emerging threats proactively helps its clients improve their security posture and reduce the risk of falling victim to a costly cyber-attack.
Plexos is a leading program delivery, business consulting and information technology company, providing disaster recovery, grant management, claims management and information technology solutions for commercial, industrial and governmental clients throughout the United States and its territories. As part of its market strategy, Plexos develops new companies through strategic investment and management support. (Source: BUSINESS WIRE)
11 Sep 21. EWS (Asia Pacific) formed. Led by an Australian Managing Director who will take up their post from 1 September 2021, the Canberra based EWS (AP) team will be supporting the whole of government, defence, intelligence and security clients in Australia, New Zealand and across Asia Pacific, bringing specialist skills to help build regional capability.
EWS is a global innovation consultancy operating in the multi-domain arena, providing clients with practical solutions to solve complex and overwhelming problems.
Commenting on the expansion, Jon Gower, EWS’ CEO said, “Our specialist teams have been providing vendor-neutral consultancy, intelligence and training support to governments, defence and security teams dealing with global threats, counter terrorism and near-peer conflict since 2009. Incorporating in Australia is a natural step forward for us, providing the Group with a strong foundation to develop a team of specialists, centred on Australia, with reach across the whole Asia Pacific region.”
On hearing the news of the launch, Jono Beesley, DSM brigadier (Retired) said, “As the former Commander of the ADF Joint Counter Improvised Threat Task Force where EWS’ products provided critical Open Source Threat Intelligence, I saw first-hand the game changing operational benefits EWS delivered to operational planning and threat mitigation. The establishment of EWS (AP) is a significant addition to our sovereign intelligence capability.”
Jon Gower finished, “We think it’s vital for the future of citizens and communities across Asia Pacific that we help to build a sovereign capability that is proactive rather than reactive, using all available intelligence to guide decision making and create an adaptive approach for tomorrow’s threats, not yesterday’s. The EWS Group is very proud as we launch into Australia and look forward to building collaborative and mutually beneficial relationships within the defence, intelligence and security communities.”
Despite a global pandemic, EWS Ltd. has experienced phenomenal growth and demand from governments, defence, national and domestic security, justice and corporate entities across the globe, which has led it to this natural decision to launch EWS (AP) in Australia to better service the specific needs of the Asia Pacific region.
Whether you are a government; operating in the defence sector; a global organisation; working in national and domestic security; or a commercial business, you can rely on EWS (AP) to provide you with unbiased and honest advice. Unique in our approach and application, we will deliver proactive support, unique insights and recommendations to improve operations and meet your budgets and deadlines.
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.