Sponsored by TCI International Inc.
08 Jul 22. Safran acquires Orolia and plans to become the world leader in resilient PNT. After an exclusive negotiation process that began in December 2021, Orolia — a company recognized globally for its positioning, navigation and timing (PNT) and related activities, technologies and equipment — today joins Safran Electronics & Defense, the European leader and world number three in inertial navigation systems.
Orolia employs more than 435 people in Europe and North America and has revenues of around €100 million. Its solutions include atomic clocks, time servers*, simulation and resilience equipment for GNSS** signals, as well as emergency locator beacons for commercial aviation and military applications. These make Orolia a highly complementary and synergistic part of Safran Electronics & Defense’s activities as it meets the challenges of positioning, navigation and synchronization in contested and vulnerable environments.
In most situations, GNSS systems are the reference providers of time and position data, but they need to be secured by combining them with accurate, high-integrity autonomous time or inertial references.
Through this partnership with Orolia, a foremost provider of time management solutions, Safran Electronics & Defense, a leader in positioning and navigation solutions, will offer a complete and cohesive set of resilient PNT architectures and equipment to meet the challenges of integrity and robustness for the aviation, defense, space, transportation, new mobility and critical infrastructure markets.
Jean-Yves Courtois, CEO of Orolia, commented: “Orolia could not imagine a better fit than with Safran to secure its growth and leverage its PNT leadership positions. Thanks to the addition of best-in-class timing and inertial technologies, premier access to the largest defense and aerospace markets, and a proven track-record in government program capture and execution, Safran and Orolia have now all the cards in hands to establish themselves as the Resilient PNT leader.”
Martin Sion, CEO of Safran Electronics & Defense, said: “The acquisition of Orolia makes Safran one of the only companies with the full complement of PNT technologies, bringing together Orolia’s precise time referencing and Safran Electronics & Defense’s proven inertial navigation solutions. Our shared ambition is to become the world leader in resilient PNT for all conventional and strategic applications.”
07 Jul 22. Melrose grinds through the gears at GKN. Slowly but surely, the turnaround specialist is cranking up margins at the recovering GKN.
in the relatively unglamorous world of metal-bashing, Melrose Industries (MRO) has invoked a lot of passion. Debt burden abates.
- Track record
- Expanding margins
- Recovering end markets
- Lumpy return profile
- Weak disposal backdrop
Its £8.3bn takeover of GKN in 2018 managed the rare feat of uniting both the unions and the Daily Mail, both of which felt that it would be an unsuitable owner for a storied engineering group with a history dating back to the industrial revolution.
Unite, the UK’s biggest trade union by membership, argued the deal risked GKN being “sold off piecemeal”, with jobs being axed and technology shipped abroad. The Mail, meanwhile, ran a ‘Save GKN’ campaign, labelling Melrose “asset strippers”.
The company’s view of how it operates is unsurprisingly more sober, summing up its approach in three words: buy, improve, sell. It acquires underperforming engineering groups, turns them around and sells them off.
Melrose was floated on Aim in 2003 by executive vice-chairman Christopher Mills, chief executive Simon Peckham and ex-chief executive David Roper, who retired two years ago. The trio previously worked together at mini-conglomerate Wassall, which was sold to private equity giant KKR in 2000.
It has done four turnarounds to date – each bigger than the last. The first was the £427m purchase of McKechnie and Dynacast from private equity firm Cinven, and the last before GKN was the £2.2bn buyout of Nortek in 2016. In each case it has doubled the return on its initial outlay, usually within three to five years.
Since inception, it has handed about £5.5bn in cash back to shareholders and total shareholder returns since May 2005 – the date of its first acquisition – have reached 1,706 per cent, compared with the 174 per cent earned by the FTSE 100 over the same period.
Its annualised average return has been around 19 per cent, but payouts tend to be lumpy, as it loses money in the early stages of an investment only to recoup big gains once disposals are made. It has only made one pre-tax profit during the past seven years.
This lumpiness is reflected in directors’ bonuses, which have been a source of contention among shareholders in the past. Although its last long term incentive plan (LTIP) lapsed in 2020 given the prevailing market conditions, the previous one for its 2017 financial year led to payouts of almost £42mn to each of its four directors. Shareholders rebelled, with almost a quarter voting against the group’s remuneration report.
The next LTIP bonuses are not due to vest until the end of 2023. If directors are entitled to another big payout by then, shareholders may be more accommodating if it means the GKN deal is finally delivering results.
Melrose’s acquisition was disastrously timed. GKN’s two main markets – automotive and aeronautical engineering – have been hammered by the pandemic and supply chain disruption. In 2021, the company’s sales of £6.88bn were 37 per cent lower than two years earlier and its pre-tax loss widened to £618m after booking more than £450mn in intangible asset amortisations and £269m of restructuring costs.
Counting the cost
The amount spent on restructuring show the union’s concerns weren’t entirely without merit.
In automotive, the company’s largest division and source of 47 per cent of total 2021 sales, Melrose closed GKN plants in Germany, South Korea and the US last year and began the shutdown of a plant in Birmingham employing around 500 staff. In aerospace, which made up 37 per cent of revenue, the company is in the process of reducing the number of sites by more than a third to 33 by the end of next year, from 51 previously.
The prize, as ever, is higher margins. Last month, Peckham said that if GKN gets back to 2019 levels of revenue and achieves its stated margin targets – “and we have never failed to do to that to date” – group profits should treble. Last year’s adjusted operated profit stood at £375mn.
Its two core markets are taking time to recover, though.
In its most recent trading update, Melrose reported that like-for-like sales at its automotive and powder metallurgy arms in the first four months of the year trailed the same period in 2021 by 4 per cent. It blamed the ongoing shortage in semiconductors, saying sales were “significantly below” underlying consumer demand levels.
The automotive business makes drive systems for both conventional and electric-powered vehicles. Half of the £5bn of orders won last year were for either battery operated or full hybrid vehicles, and its components are used in seven of the top 10 electric car platforms outside China.
The site closures were part of a programme that delivered about £60mn of savings last year, which contributed towards a doubling of adjusted operating margins to 4.6 per cent. Melrose’s target is to grow this to 10 per cent, which depends on a recovery of the automotive sector. Although new car registrations in the UK fell by 12 per cent in the first six months of 2022, as pandemic restrictions in China further hampered chip supply, analysts at Fitch Ratings see signs that this could improve as demand eases.
In aerospace, the chaos that has engulfed understaffed airports in recent months attests to the rebound in demand for air travel. The International Air Transport Association (Iata) last month forecast a doubling of passenger traffic this year, to 82.4 per cent of last year’s levels. A recovery to pre-pandemic levels is expected by 2024, with long-term annual growth between 2019 and 2040 forecast to average 3.3 per cent.
This bodes well for Melrose, whose aerospace arm makes everything from lightweight structures for single aisle planes built by Airbus (FR:AIR) and Boeing (US:BA), as well as engine parts for the likes of Rolls-Royce (RR.) and GE (US:GE).
The decline in the aerospace market has also masked how much GKN Aero has responded to Melrose’s improvement model, chief financial officer Geoffrey Martin told investors at its capital markets day.
The company used the event to upgrade its operating margin target for the aerospace business to 14 per cent, from 12 per cent previously. The division’s adjusted operating margin last year grew by four percentage points to 4.4 per cent, and the company expects to be able to deliver a further four percentage points through operational and efficiency improvements. A further six percentage points will appear once the market recovers to pre-pandemic levels, it argued.
Melrose forecasts compound revenue growth of 7 per cent for GKN Aero by 2030, saying the division has “the highest potential equity return of all the GKN businesses”.
Engines for growth
Peckham argued that most of the risky operational challenges in GKN’s transformation are already complete or well under way. Although returns from this deal will take longer, given time “we believe that we will maintain this record” of doubling shareholder returns, he said.
This would mean returning over £16bn, which looks ambitious given that Melrose’s market value has slipped to £6.4bn, or £2bn less than it paid for GKN four years ago.
Given the improving end markets, this valuation looks harsh. Melrose has repaid the £3.4bn of net debt incurred at the time of the GKN acquisition, save for cash returned to shareholders. At the end of last year, net debt excluding lease liabilities stood at £950mn, or 1.3 times adjusted cash profits. Its focus on costs means working capital has been reduced to 3 per cent of revenue, from 5 per cent at the time of the acquisition.
Aerospace head David Paja told the capital markets event that the cumulative value of future cash flows linked to aero engine programmes it is working on comes to £18.5bn over their lifespan which, if discounted back at a 7.5 per cent rate, has a net present value of £5bn. Of course, this is highly dependent on the assumptions used, but given these contracts make up less than 20 per cent of the aerospace division’s current sales, or 5 per cent of group sales, it suggests there is more value in the business than the current share price reflects.
Indeed, a consensus share price target of 200p suggests analysts believe the company is trading at a 30 per cent discount.
The market would probably like to see more evidence of GKN’s improvement before agreeing. Either way, Melrose does not intend to lose momentum. Peckham believes enough of the hard work at GKN has been done that once the summer is over, the turnaround group will be “able to look to the next opportunity” – equity markets permitting. (Source: Investors Chronicle)
07 Jul 22. L3Harris to buy stake in laser comms firm Mynaric. US defence contractor L3Harris Technologies plans to acquire a 7.2% stake in German laser communications equipment provider Mynaric for about EUR11.2m (USD11.4m) as part of a collaboration agreement between the two companies, according to a joint announcement on 6 July.
Under the agreement, L3Harris and Mynaric, which work together in the air domain, will expand their co-operation to other domains, including land, sea, and space. Mynaric will become a “preferred provider” of laser communications products, and L3Harris will gain access to some of Mynaric’s test assets.
Partnering with Mynaric will “rapidly address our customers’ needs for high-bandwidth and secure connectivity”, said Daniel Gittsovich, L3Harris vice-president for corporate strategy and development.
The existing collaboration between the two companies involves Mynaric’s Hawk optical communications terminal, which is mounted on aircraft to share data with other aircraft or the ground. Mynaric’s other products include the Condor family of optical communications terminals, which enable satellites to share data with each other. (Source: Janes)
06 Jul 22. Aerojet chief wins out over former board chairman, selects new board members. Aerojet Rocketdyne’s chief executive, Eileen Drake, has won control of the embattled company after several months of turmoil.
The contractor’s shareholders on June 30 elected an independent slate of candidates to serve as directors on its new board, Aerojet said in a Wednesday release issued after the results were certified. The group includes Drake, who will continue as Aerojet’s chief executive.
Warren Lichtenstein, who as the company’s executive chairman sought to oust Drake from her role, has left the board. In May, the contractor formally reprimanded him for his behind-the-scenes effort to replace her.
The new board consists of several well-known former government and industry leaders, including former Air Force Secretary Deborah Lee James, former NASA Administrator Charles Bolden, former Collins Aerospace executive Gail Baker, and former Federal Aviation Administration chief and Rolls-Royce executive Marion Blakey.
They will join Kevin Chilton, Thomas Corcoran and Lance Lord — incumbent directors who will remain on the board along with Drake.
“We are extremely grateful for the engagement and support of our shareholders throughout the process that culminated in the election of our new board,” Drake said in Aerojet’s release. “Each of our new directors is an accomplished business leader with relevant experience and a history of creating substantial shareholder value.”
According to Aerojet’s Securities and Exchange Commission filings posted Wednesday, stockholders’ vote for the new board was not close. Drake received nearly 55.3m votes, about 83% of the 66.3m possible votes, and the other elected directors each received almost 50m votes. Lichtenstein received 15.3m votes.
With the apparent end of the turmoil plaguing Aerojet’s boardroom, the company can now turn its focus toward charting a new direction following its failed acquisition by Lockheed Martin.
Lockheed first announced its desire to buy Aerojet, a key supplier of solid rocket motors, for $4.4bn in December 2020. Bringing Aerojet’s portfolio in house would have given Lockheed a considerably stronger hand in the space and hypersonic fields.
But some lawmakers, such as Sen. Elizabeth Warren, D-Mass., were concerned the acquisition could hurt competition in the defense industry. The Federal Trade Commission in January announced it would sue to block the deal over antitrust concerns, and Lockheed announced an end to the planned transaction one month later.
As the deal stagnated last year, conflict between Drake and Lichtenstein grew. In a May 2021 memo to Aerojet’s then-general counsel, Drake objected to Lichtenstein’s conduct and accused him of defaming her and trying to oust her for his own benefit.
Drake called Lichtenstein a “liability” and said he was having improper conversations with outside parties about the Lockheed deal and the company’s leadership.
Aerojet launched an investigation. Lichtenstein denied the allegations and said he had not provided confidential information to outside parties or defamed any Aerojet officials. He said Aerojet must be prepared for the possibility the Lockheed deal might not come to pass, and that he was frustrated by management’s lack of responsiveness and transparency.
After last month’s announcement that Aerojet had reprimanded Lichtenstein, Drake and Lichtenstein issued dueling releases in which they swiped at one another. Drake suggested the reprimand showed Lichtenstein was not fit to continue as executive chairman, while Lichtenstein accused Drake of acting selfishly and wasting company resources by pushing the investigation.
A committee backing the election of Drake’s preferred slate issued a release June 30 claiming victory, based on preliminary vote results. In that release, Drake sought to sound a conciliatory note, saying the new board will closely consider the perspectives and feedback shared by the company’s shareholders during the leadership struggle.
She offered thanks to Lichtenstein, also the executive chairman of Steel Partners Holdings, in the June 30 release. Steel Partners has been an Aerojet investor since 2000 and now holds a roughly 5% stake in the company. Lichtenstein was initially added to Aerojet’s board after a 2008 shareholder agreement between the company and Steel Partners.
“We acknowledge that a difficult and costly fight has brought us to this point, but the time has come today to plot a positive path and work with all our shareholders, including Steel Partners, to maximize value,” Drake said in the June 30 release. “In that spirit, we would like to thank Warren Lichtenstein and the other departing board members for their service to our company.”
James, now a board member, told Defense News she’s honored to join Aerojet’s slate of directors. Aerojet Rocketdyne “is involved with many programs of national security importance like space propulsion, hypersonics and the [Ground Based Strategic Deterrent next-generation nuclear missile, also known as the Sentinel],” James said in a text. “I’m looking forward to being part of this extraordinary team and helping to advance the company’s mission.” (Source: Defense News)
06 Jul 22. Kongsberg Enters Into an Agreement to Acquire Smallsat Manufacturer NanoAvionics. Kongsberg Defence & Aerospace (KONGSBERG) has entered into an agreement to acquire Lithuanian smallsat mission integrator and bus manufacturer NanoAvionics. The planned acquisition expands KONGSBERG’s space offering to also have products and technology for manufacturing small satellites. NanoAvionics is a leading smallsat mission integrator and bus manufacturer with significant global growth in recent years, including expansions into the United Kingdom and the United States. With more than 150 employees the company has contributed to 120 missions and commercial satellite projects, with customers ranging from national space agencies to universities such as UNSW Sydney and companies such as Thales Alenia Space, Aurora Insight, the Dubai Electricity & Water Authority, SEN and others.
“The agreement to acquire NanoAvionics represents a game changer for KONGSBERG’s space ambitions. By acquiring NanoAvionics KONGSBERG expands its portfolio to also have products and technology for designing and manufacturing small satellites. KONGSBERG is the Nordic region’s largest industrial space company and a global leader in maritime surveillance. We have clear ambitions to grow further and with this acquisition we are taking the next step both for us and for Norwegian space industry,” says Geir Håøy, CEO of KONGSBERG.
KONGSBERG will acquire in total 77 per cent of the company. Current majority owner AST & Science will divest all its shares, while the management of NanoAvionics will retain 23 per cent of the company. The parties have agreed upon an enterprise value of EUR 65 m (100 per cent basis). Management and leadership structure of NanoAvionics under CEO Vytenis Buzas and CCO Linas Sargautis, both founders of the company, will remain unchanged. KONGSBERG and NanoAvionics plan to close the transaction following the conclusion of customary closing conditions including any required regulatory reviews.
“Joining forces with KONGSBERG, one of the most respected names in the defence, maritime and space domain, further strengthens and broadens our position in the NewSpace sector and provides us access to new markets. It is the right timing and a perfect match for our companies to consolidate our expertise and create a world class space company which will be a leading prime contractor for small satellite missions,” says Vytenis J. Buzas, founder and CEO of NanoAvionics.
Complementary technology and market positions
The two companies have complementary technology and positions in the space value chain. NanoAvionics is a leader in the Smallsat segment as a mission integrator and bus manufacturer, whilst KONGSBERG is an established provider of spacecraft subsystems, and through Kongsberg Satellite Services the world-leading supplier of satellite ground stations for downloading and processing satellite data.
NanoAvionics has customers in more than 40 countries across Asia, Europe and the Americas, complementing KONGSBERG’s global positions in both the traditional space segment and new space.
“By joining forces NanoAvionics and KONGSBERG will be able to provide cost efficient solutions and services for customers, from manufacturing, payload production and integration, to launch services, and mission control and data processing. The market for small satellite constellations will increase going forward, within commercial, security and defence segments. NanoAvionics has a strong proven track record, and we look forward to working closely with this talented team,” says Eirik Lie, President of Kongsberg Defence & Aerospace.
Delivering on Norwegian space ambitions
The planned acquisition is in line with KONGSBERG’s strategic priorities to grow in the space technology sector and Norway’s space ambitions. In April KONGSBERG announced the procurement of three microsatellites from NanoAvionics as a first step of establishing Norway’s first satellite constellation with unique and world-leading capabilities. On July 5 of this year KONGSBERG will open a new 6,000 square meter building, with specialized facilities for the development and production of products to be launched into space.
“Norway is a leader in the domain of maritime surveillance in the high north. The planned acquisition incorporates world class small satellite technology into our portfolio enabling further advances in surveillance and other key strategic capacities. NanoAvionics, along with our existing space portfolio and the development of the Andøya Space Port means Norway now has leading positions across the entire value chain,” says Lie. (Source: ASD Network)
06 Jul 22. Vectrus and Vertex close merger and form V2X. The transaction has led the combined company to become a key mission solutions provider for global defence customers. Vectrus and The Vertex Company have closed merger transaction to form a combined entity V2X. The company currently trading as ‘VEC’ on New York Stock Exchange will trade under the new ticker symbol ‘VVX’ from 8 July. As per the transaction, former Vertex stockholders own nearly 62% of V2X, while Vectrus shareholders own 38% on a fully diluted basis.
Further, Vertex shareholders secured over 18.6 m shares of Vectrus common stock.
The latest transaction has established the new company as a key mission solutions provider to support global defence customers.
V2X chief executive officer Chuck Prow said: “Through this transformative combination, we created a company with the scale and ability to compete for large integrated business opportunities by providing full life-cycle support across the converged environment.”
The combined entity will have 11 members on its Board of Directors. While six members are continuing directors designated by Vectrus, five have been appointed by Vertex. Mary Howell will be the board chairman.
While Goldman Sachs & Co served as exclusive financial advisor, Skadden, Arps, Slate, Meagher & Flom and Covington & Burling acted as legal counsels to Vectrus.
Ernst & Young and Wolf Den Associates also contributed as Vectrus’ advisors. Meanwhile, Vertex has RBC Capital Markets, and Evercore as its financial advisors. V2X, as a diversified company, offers integrated solutions in the fields of logistics, aerospace, training and technology to cater to national security, defence, civilian and international customers. The new company plans to provide second half 2022 guidance after releasing its second quarter financial results on 9 August this year. (Source: army-technology.com)
06 Jul 22. Update on the proposed acquisition of Ultra Electronics Holdings plc by Cobham Ultra Acquisitions Limited. The acquisition of Ultra by Cobham has been cleared to proceed. Following advice from the Ministry of Defence and after careful consideration of responses to a consultation, the Business Secretary has today (Wednesday 6 July) cleared the acquisition of Ultra by Cobham to proceed.
The announcement follows the Business Secretary consulting on steps to address the national security concerns raised by the proposed acquisition of Ultra, a UK defence company, by Cobham, a defence, aerospace, and communications company that was acquired by US private equity firm Advent International. The government consultation on the undertakings offered by the companies to address the concerns identified ran until 3 July 2022.
The Business Secretary has accepted the undertakings from the parties to mitigate national security risks, with a small number of changes to reflect the responses to a consultation on them.
The undertakings to mitigate the national security concerns came into force today and details are available on the decision notice. In summary, the undertakings are:
- SecureCos: creating 2 new ‘SecureCos’, UK legal entities which encompass the UK Ultra facilities that deliver the sensitive capabilities to HM Government
- Board Representation: placing an HM Government appointed non-executive director on the Board of each SecureCo to protect UK national security interests and provide oversight of any disinvestment or divestment of sensitive capability
- Articles of Association: giving HM Government the right to approve the Articles of Association of each SecureCo and draft their strategic objectives which would transfer to any future owner, locking that protection in. Any changes would be subject to the HM Government Director’s agreement
- Step-In Rights: giving HM Government strong step-in rights (similar to a ‘special share’), enabling transfer of ownership of the SecureCos on national security grounds, either to a third party or the government
- Access to Intellectual Property: giving HM Government the power to access intellectual property and / or to transfer knowledge or training necessary for HM Government to exercise its step-in rights effectively
- ITAR Protections: requiring Advent to institute an HM Government-approved control plan to prevent International Traffic in Arms Regulations controls applying to ITAR-free products designed and manufactured by Ultra
Separate to the public interest intervention and the mitigation of national security concerns, the government has agreed a deed offered by the parties to:
- maintain a corporate headquarters of the Ultra Group in the UK
- increase engineering R&D expenditure by at least 20% by the end of 3 years
- continue in good faith with Ultra’s proposal to establish a centre of excellence for cyber capabilities in Maidenhead
- by the end of the 3-year period, increase the number of UK-based engineering R&D FTEs by at least 15%
- by the end of the 3-year period, increase the number of UK-based manufacturing FTEs by at least 10%
- maintain the aggregate number of UK-based engineering and manufacturing FTEs above a baseline level, equivalent to the number of associated FTEs at deal close minus any headcount changes associated with Ultra’s existing transformation programme
- establish a scholarship fund of up to £5,000,000 to support over 100 university undergraduates from under-represented backgrounds in the UK to pursue degrees in engineering and related disciplines
- by the end of the 3-year period at least double the number of apprentices employed by Ultra
In addition, by the end of the 3-year period, Cobham commits to establishing programmes intended to:
- promote the objective of reducing Ultra’s greenhouse gas emissions to net zero by 2050
- promote the objective of increasing the levels of diversity in the UK workforce of the Ultra Group (Source: https://www.gov.uk/)
04 Jul 22. Covid’s ill-wind underpins Porvair’s performance.
Filtration firm’s laboratory arm grows revenue by 22 per cent.
- Inflation costs passed on so far
- Capex focus to switch towards efficiency investments
As the recent spike in Covid-19 infection rates proves, the idea that we are now in a post-pandemic world seems premature.
Porvair (PRV), which makes a broad range of filtration equipment, had been expecting Covid-related demand in its laboratory business, which makes up 37 per cent of revenues, to have pulled back as the pandemic recedes. Demand did fall, although nowhere near as much as expected and the continued clamour for PCR tests contributed to a 22 per cent increase in the unit’s sales.
When coupled with the first recovery in aerospace-related revenues since 2019, it meant Porvair’s fairly solid record of delivering revenue and earnings growth continued. Over the past 15 years, it has delivered compounded annual revenue growth of about 9 per cent and adjusted earnings growth of 10 per cent, chief executive Ben Stocks said.
Like other manufacturers, it has been dealing with “quite disruptive” inflationary pressures. It has managed to pass costs along so far but Stocks acknowledges that this can only be done so many times before “competitive dynamics take hold”.
Despite a £4.9mn working capital outflow in the first half as the company built inventory to prevent supply chain disruption, cash generation improved and it finished the period with £12.2mn of net cash excluding leases, up from £6.2mn a year earlier.
Although the company currently looks “pretty set” for the second half, there isn’t much visibility beyond the next three months’ trading, Stocks said. “In terms of underlying positions, there’s reasons to be cheerful. Aerospace continues to strengthen and the order books there are miles better than they were a year or two years ago.”
Mindful of inflationary pressures, the company is refocusing its capex spend away from initiatives to boost capacity towards investments in automation and efficiency improvements.
Porvair’s shares, which are flat over a 12-month period, trade marginally below their five-year valuation, at 21 times broker Shore Capital’s forecast earnings per share of 27.7p for the current financial year. Other metrics such as price-to-sales and price-to-book value are also below five-year averages, but not by much.
This may be a sign of Porvair’s resilience, but the company is not insulated from the fortunes of the broader economy – its Metal Melt arm makes up 25 per cent of group revenue and is exposed to demand for aluminium and high grade alloys, for instance. Given the worsening economic backdrop, we move our recommendation from buy to hold. Last IC View: Buy, 684p, 31 Jan 2022. (Source: Investors Chronicle)
04 Jul 22. Australian DST Group re-organises from 1 July. DST Group has undergone a significant re-organisation which EX2 understands was supposed to have been unveiled on 1 July. The only sign on DSTG’s website so far has been this note:
“Our divisions ceased to operate from 1 July 2022.
“DSTG is focussed on bringing together interdisciplinary expertise from across Australia and around the world to address Defence and national security challenges. Our role is to work closely with the Australian science, technology and innovation eco-system to deliver scientific advice and solutions that provide capability enhancement for Defence and the national security community.
“Strengthened implementation of the More, together: Defence Science and Technology Strategy 2030 is required to increase scale of sovereign S&T capability through strategic partnerships, to rapidly respond with impact to new threats and to deliver game-changing solutions for the ADF.”
(Source: Rumour Control)
04 Jul 22. Prolifics Acquires Tier 2 Consulting Limited. Prolifics, a global digital transformation leader, is pleased to announce the acquisition of Tier 2 Consulting Limited. Incorporated and registered in England and Wales, Tier 2 delivers software solutions to its clients using modern, open-source, cloud-native technology, and an agile project approach. The Tier 2 team is composed of full-stack Java developers and Red Hat Middleware and OpenShift experts. Based on its skills and experience, Tier 2 was in fact the first Red Hat Premier Middleware Partner for the UK and Ireland.
For Prolifics, the acquisition is part of its ongoing expansion and growth goals. Tier 2 brings expert custom software development – using its agile approach with disciplined delivery – with a large and loyal UK customer base. Its Red Hat Premier Partner status, coupled with Prolifics already strong partnership with IBM, will expand opportunities across the board.
For Tier 2, becoming part of the Prolifics family will mean the ability to scale its existing custom software delivery capability to meet the increasing demands of its customers, offer expanded solutions and services in performance, volume, and penetration testing, in data and analytics, as well as provide enhanced career opportunities and job advancement for its people. Tier 2 will continue to operate as a separate entity under its current leadership structure.
Satya Bolli, Prolifics Chairman & Managing Director, said, “We are thrilled to have Tier 2 as part of the Prolifics family. Their skill in software development and delivery and significant expertise in Red Hat Middleware and OpenShift will greatly increase our position and visibility in the high growth potential of the UK and North America cloud markets.”
Andrew Kennedy, Managing Director at Tier 2 Consulting, said, “This acquisition marks a significant milestone in Tier 2’s 20-year history. Building on our already proven track record of custom software design and development, it will provide Tier 2 with the basis for future expansion, to the benefit of our customers and our highly skilled team. We share Prolifics’ ethos around quality solution delivery and technical expertise, and are delighted to have become part of the family.”
About Tier 2 Consulting
Tier 2 works in partnership with our customers to understand their business challenges, and deliver custom software solutions using modern, open-source, cloud-native technology and an agile project approach.
We are full-stack Java developers, Red Hat Middleware and OpenShift experts, and became the first Red Hat Premier Middleware Partner for the UK & Ireland in 2014, an award based on proven skills and experience. In 2021, we became one of the first Red Hat Container Platform Specialists in EMEA, an award which cements our position as the Red Hat partner of choice for delivery of cloud-native applications.
About Prolifics UK
At Prolifics UK, we help organisations excel in digital innovation. We’re a bespoke systems integrator with deep software engineering expertise and we serve as a trusted adviser to many leading UK businesses in many different industries. Our architects and engineers unlock the value of data through APIs, integration, data transformation and Cloud-Native development. Prolifics Testing is a consultancy offering software testing services and industry-accredited software testing training courses. Both Prolifics UK and Prolifics Testing are part of Prolifics global. Visit www.prolifics.co.uk.
03 Jul 22. ‘Bonkers’ City rules hand China and Russia military edge over UK. UK investors urged to stop shunning British defence giants.
Britain’s defence industry is still being held back by “bonkers” ESG rules despite hopes that Russia’s invasion of Ukraine would prompt a rethink among investors.
Kevin Craven, chief executive of ADS Group, the trade body for aerospace and defence companies in the UK, said professional investors were still shunning companies in his industry despite the outbreak of war in Europe underlining the importance of defence.
Mr Craven called on the Government to step in and encourage investors to back defence companies, which have been shunned by fund managers in recent years.
So-called ethical, social and governance (ESG) rules require investors to avoid defence stocks if they want to carry an ESG label, which has become highly sought after in recent years. ESG rules govern bns of pounds worth of British pension investments and savings, and lump defence shares in with cigarette pedlars, animal testing companies and oil firms.
European investors use similar rules but ESG has proved less of a hindrance to arms makers in the US.
The rules risk giving an edge to China and Russia, which have nationalised defence industries and do not need to persuade investors that they should be supported, Mr Craven said.
“The fundamental argument must be that a government’s first duty to citizens is to protect them, and it must have the means to do so,” he said.
“For investment funds and professionals to make the decision to exclude the means by which you can do so seems to me to be totally bonkers.”
Russia’s attack on Ukraine has put defence companies and spending in the spotlight. Boris Johnson last week announced that UK defence spending will rise to 2.5pc by the end of the decade, labelling the additional investment the “cost of freedom”.
Ultimately, however, the investment industry will need to back Britain’s defence sector for it to be a success, Mr Craven said. He urged politicians to encourage investors to think again about how they classify defence stocks under ESG rules.
“Will it stop of its own volition as a result of Ukraine? I don’t think so; I think it will take active engagement by both our sector and by politicians, and ultimately by investment professionals to say defence is an important part of society,” he added.
The withdrawal of UK fund managers has kept prices low and attracted bargain-hunting US investors. US-based investors now own almost twice the share value of UK money managers, Telegraph analysis revealed last month.
A decade ago, shipbuilder Babcock was 58pc owned by British investment houses, but now that figure has slipped to 37pc. Rolls-Royce has fallen from 37pc British ownership to 7pc and defence contractor BAE is down from 38pc to 26pc. US investors now own 54pc of BAE, 71pc of Rolls and 49pc of Babcock. (Source: Google/ Daily Telegraph))
04 Jul 22. Kleos secures A$10m to accelerate growth.
- Four-year, secured A$10m debt facility with PURE Asset Management
- Debt facility to fund Kleos company & constellation growth
- Primes Kleos to achieve transformational growth in its data and analytical services
Kleos Space S.A (ASX: KSS, Frankfurt: KS1), a space-powered Radio Frequency Reconnaissance data-as-a-service (DaaS) and Mission-as-a-Service (MaaS) provider, has entered into a four-year secured A$10 m debt facility with PURE Asset Management Pty Ltd (PURE) to fund operations & satellite constellation growth.
Commenting on the debt facility, Kleos CEO Andy Bowyer said, “Kleos is in a period of rapid growth, responding to market needs for greater situational awareness. This debt facility provides us with capital to expand beyond our 12-satellite constellation already in orbit as well as the four satellites due to launch in 2H 2022.
“Increasing global risks and conflicts have driven a growth in demand for intelligence, surveillance and reconnaissance data. With each new cluster of satellites we operate, we significantly increase our data collection capacity and sophistication, as well as revenue opportunities.”
Kleos uses Space technology to locate radio transmissions in key areas of interest around the globe, efficiently uncovering and exposing activity on land and sea. Using Kleos owned clusters of satellites, RF data is collected, transmitted to the ground, processed using proprietary technology, and delivered to customers worldwide.
Customers, including analytics and intelligence entities, licensing data on a subscription basis (DaaS) or by buying dedicated satellite capacity (MaaS). The provided data is applicable to government and commercial use cases, aiding better and faster decision making.
Kleos currently has a constellation of 12 satellites in low earth orbit with another 4 satellites scheduled to launch later in FY22. Use of funds from the Pure facility include additional constellation growth beyond the satellites already scheduled for launch in addition to expansion in the operational team to support company growth.
“We have been impressed with the level of genuine commercial interest in Kleos’ offerings from a broad array of sophisticated Government bodies globally, in undertaking our due diligence,” said PURE Asset Management co-founder Nick Berry.
“Kleos faces limited competition in a rapidly scaling market, and its commercial prospects are divorced from the monetary policy considerations currently driving macro-economic trends. We’re excited to be partnering with Kleos at this inflection point in the Company’s commercial trajectory.”
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.