Sponsored by TCI International Inc.
19 Oct 22. Two French technology firms rebrand as Exail. Two French technology companies have come together as a new entity to provide a swath of solutions for France as the country looks to master the ocean floors. iXBlue, a specialist in navigation, marine, and autonomous systems, and ECA Group, which builds robotic systems, unmanned vehicles and specialized naval equipment, will hereafter be known collectively as Exail, the new company announced Tuesday at the biennial Euronaval trade conference here.
The alliance comes after iXBlue was acquired by ECA Group’s parent company Group Gorgé at the end of September. The two companies were frequent partners on developing and operating autonomous systems, going back to the early 2000s, said Dominique Giannoni, Exail CEO.
The new name is meant to convey the notions of “excellence” and “exploration,” while hinting at the word “sail” to represent the maritime domain, Giannoni told Defense News at Exail’s booth at the conference. The new company includes 1,500 people and €250 m (U.S. $246 m) in sales, he said.
The former separate entities’ portfolios will be merged going forward, including the DriX uncrewed surface vehicle (USV) built by iXBlue and the A-18D autonomous underwater vehicle (AUV) developed by ECA Group. The companies saw the most synergies between their respective technologies in the naval domain, representatives said on the show floor. With their merger, Exail is now able to cover the full supply chain, from components to the completed systems.
While Giannoni did not mention any new products on the horizon, he noted that the two companies are already well connected, with iXBlue inertial navigation solutions integrated on ECA Group AUVs. “In the future, we will continue to develop our products while bringing our technologies together,” he said.
iXBlue and ECA Group performed a demonstration of the collaboration between their two autonomous systems, the DriX USV and the A-18D AUV, during a September press tour organized by the French naval industries organization Groupement des Industries de Construction et Activités Navales, or GICAN.
In the harbor waters next to iXBlue’s facilities in La Ciotat, France, the two autonomous systems were deployed together and remotely operated from afar, with the A18D scanning the sea bed and gathering data, and the DriX providing live realignment to the A18D’s navigation systems, as well as faster data transmission by positioning itself above the underwater system. The DriX can track and guide multiple assets such as the A18D at one time, allowing operators to remain stationed further away on a mothership.
France has placed a sharp focus on the seabed as one of the final frontiers to defend against adversaries, who may seek to destroy critical infrastructure, with a new strategy released by the Ministry of Defense released earlier this year. The nation’s “France 2030″ plan includes €2bn (U.S. $1.97bn) for space and seabed exploration technologies, while the proposed 2023 defense budget earmarked €3.5m (U.S. $3.44m) for the seabed domain, as well.
The seabed strategy released in February calls for technologies that can allow the French navy to explore the seabed down to 6,000 meters. ECA Group developed the Ulyx AUV that can reach those depths, the company said.
While no program of record has launched as of yet, Exail is in discussions with the French navy regarding such technologies, Giannoni said.
ECA Group is a partner on the Belgian-Dutch rMCM mine countermeasures program, in a temporary joint venture with Naval Group under the name Belgian Robotics and Defense. Exail will continue that work, along with all other programs that iXBlue and ECA Group took part in, a representative confirmed to Defense News. On Tuesday at Euronaval, leaders from the three nations’ defense ministries announced they would collaborate on future mine countermeasure technology efforts. (Source: Defense News)
19 Oct 22. L3Harris Invests in Seasats to Accelerate Delivery of New, Autonomous Maritime Capabilities to U.S. Navy.
- Delivers low-cost, long-endurance, solar-powered ASVs for military and commercial use
- Enables rapid production at scale to answer urgent operational maritime missions
- Combines Seasats’ X3 with L3Harris ISR, electronic warfare payloads and other operational solutions for maritime customers
L3Harris Technologies (NYSE:LHX) announced today a strategic investment in Seasats, a privately-owned company involved in the design and production of low-cost, solar-powered maritime autonomous surface vehicles (ASV) for military and commercial use.
L3Harris is making its investment to fuel collaborative development and accelerate production of Seasats’ X3 micro-ASV, whose unique design and low-signature waterline makes it difficult to detect by sight and radar. The X3 features stealthy performance and reliable six-month endurance in all weather conditions for a fraction of the price of current small maritime ASVs, and provides a complement to L3Harris’ large and medium-sized ASV offerings.
“Our U.S. Navy customers are pursuing innovative solutions to reliably and efficiently patrol the waters from the Red Sea into the Persian Gulf and we understand their urgent need for proliferated maritime ASV architectures,” said Daniel Gittsovich, Vice President, Corporate Strategy and Development, L3Harris. “Our investment and collaboration with Seasats provides a proven, multi-capability solution for global maritime security challenges.”
Inexpensive, versatile and ideally suited to host a variety of maritime payloads, the X3 is well positioned to enhance the counter-piracy, mine clearing, intelligence, surveillance and reconnaissance, and electronic warfare solutions L3Harris already provides its customers.
Seasats can also serve commercial clients by pairing platforms and sensors to enable advanced hydrographic surveys, infrastructure monitoring, and scientific discovery. Future collaboration and technology sharing between L3Harris and Seasats has the potential to increase the autonomous capabilities, artificial intelligence and endurance of the X3 while cutting production time up to 75 percent.
“The L3Harris team recognized the value in pairing their payloads and sensors with our versatile platform because together they create an operations-ready solution for a wide range of critical military and commercial uses,” said Mike Flanigan, CEO of Seasats. “Our previous tests and demonstrations with the Navy were enthusiastically received and we are looking forward to making collaborative improvements with L3Harris as we prepare for operational capabilities testing with Task Force 59 in the Arabian Peninsula next year.”
The U.S. Navy 5th Fleet commander, Vice Admiral Brad Cooper, recently announced a goal to have at least 100 unmanned surface vessels patrolling the Arabian Peninsula by mid-2023. Earlier this year the Navy invited Seasats to participate in its “Digital Horizon 2022” exercise designed to develop maritime domain awareness and accelerate the Navy’s robotic and artificial intelligence maritime capabilities. (Source: BUSINESS WIRE)
19 Oct 22. Airobotics Ltd. to Acquire Iron-Drone Assets to Offer Counter-Drone Capabilities Via Its Optimus System. AIROBOTICS Ltd. (TASE: AIRO) (“Airobotics” or the “Company”), a leading provider of autonomous unmanned aircraft systems (“UAS”) and automated data analysis and visualization platforms, announced today that it will acquire the intellectual property, technical systems, and operations of Iron-Drone Ltd., an Israeli-based company specializing in the development of autonomous counter-drone systems. Subject to completion of all legal terms and conditions, Airobotics intends acquire Iron Drone, to integrate Iron-Drone counter-drone technology with the Company’s networked Optimus Urban Drone Infrastructure. The system will provide additional capabilities, specifically when deployed for homeland security applications in “smart cities,” and for the monitoring and protection of critical infrastructure and complex commercial environments.
“We’re thrilled to bring Iron-Drone and its sophisticated counter-drone technology and products to Airobotics,” said Meir Kleiner, CEO of Airobotics. “Incorporating the technology of Iron-Drone with our Optimus Urban Drone Infrastructure System will allow us to offer our customers an advanced and unique integrated solution, enabling an even more robust automated homeland security platform. The Iron-Drone counter-drone system enables the interception of hostile drones, in areas where it is not possible to use jamming means, such as airports, populated areas, and critical infrastructures. Through the Airobotics’ drone network, security and surveillance officers will be able to neutralize these threats while utilizing Optimus drones for monitoring, observation, and video surveillance.”
Founded in 2016, Iron-Drone has developed a small UAS platform to intercept drones, which unlike most other interception drones, does not need the guidance of a human operator. The Iron-Drone counter-drone system is capable of being integrated into the existing detection and radar infrastructure where deployed and is designed to provide an autonomous response for the interception of hostile, small drones, which pose real threats to strategic facilities around the world.
In recent years, there has been a noticeable increase in the use of drones and other small, unmanned vehicles by terrorist and criminal elements for the purpose of attacking and disrupting the functioning of strategic facilities, such as airports and oil and gas facilities, as well as mass events and city centers. The small size of these aircraft, and the nature of their slow and low-altitude flight, makes it difficult to locate them, and this is usually done only when they are very close to the target. These aircraft may also be used for intelligence gathering, smuggling and as weapons.
Airobotics, which operates in the United Arab Emirates and in other countries, expects to establish an infrastructure network of autonomous drones which can be used for security, monitoring and inspection applications. The counter-drone capability, whereby counter-drones are launched from a counter-drone docking station to be integrated into Airobotics Optimus UAS platform, is a complementary feature to the Airobotics UAS platform, which is capable of operating day and night. Once integrated, the small, unmanned counter-drone aerial vehicles can launch at a fast pace, equipped with interception means, thus enabling the simultaneous handling of several hostile drone targets.
As soon as detection is established, an interceptor drone will be launched, and will fly towards the target under the guidance of the radar and the detection systems currently installed around the world. At this stage, the intercepting drone will identify and “lock on” to the target, using computer vision capabilities together with artificial intelligence, and will follow the target as well as perform the interception, by physically damaging the attacker’s tool and neutralizing it. The interception process will be carried out autonomously and without any need for human intervention.
In collaboration with a local government body from the United Arab Emirates, the company completed a project where the Airobotics Optimus System was operating at the Dubai Expo 2020. There, the Airobotics drones performed complex tasks, without any pilot involvement, visual observers, or human intervention. The Company successfully completed autonomous UAS operations twenty-four hours per day, seven days a week for six months. The hundreds of flight hours, combined with the operational experience gained, are unprecedented in scope, and constitute operational proof of the feasibility of the Company’s systems over a long period of time, in dense population concentrations. (Source: PR Newswire)
18 Oct 22. Booz Allen completes EverWatch purchase challenged by US. Booz Allen Hamilton wrapped its $440m purchase of fellow defense company EverWatch, following a federal judge’s decision not to intervene on antitrust grounds.
Booz Allen announced the finalized deal Oct. 14, roughly a half-year after the prospective merger was first publicized.
“EverWatch’s talented workforce, national security expertise, and core technical capabilities are an exceptional strategic fit with Booz Allen’s deep mission insights and robust portfolio of full-spectrum cyber operations, mission analytics, AI, and 5G offerings,” Tom Pfeifer, Booz Allen’s national security sector president, said in a statement. “The combination will deliver tremendous value to our clients as we work together to navigate a dynamic threat landscape and transform U.S. national cyber capabilities.”
EverWatch, a supplier of artificial intelligence, cloud services and insider-threat analysis, will initially operate as a subsidiary of Booz Allen, the 22nd largest defense contractor by revenue, according to the latest Defense News rankings.
John Hillen, EverWatch’s CEO, in a statement said his team was “excited to join Booz Allen” and looked forward “to working together to deliver exceptional support to clients in the intelligence community and beyond.”
The Justice Department in June sued to stop Booz Allen from acquiring EverWatch, alleging the merger was anticompetitive. In its complaint, the government argued the combination would harm taxpayers and cripple services provided to the National Security Agency under a multi-year signals intelligence and simulation contract known as Optimal Decision.
Booz Allen and EverWatch were thought to be the only two serious bidders for Optimal Decision, which is valued at $150 m, according to court records. The NSA issued a request for proposals for the contract in mid-September.
U.S. District Judge Catherine Blake on Oct. 11 killed the Justice Department’s request for preliminary injunction — a green light for Booz Allen to quickly complete its takeover. The government’s counsel has since sought a two-week injunction suspending the merger while an appeal is mulled. Booz Allen previously told the court its purchase of a “struggling” EverWatch would stimulate defense industry competition and better position it to challenge larger, more-dominant players, such as Lockheed Martin and Raytheon Technologies. The company also said the revenue generated by Optimal Decision pales in comparison to its ultimate goals. (Source: Defense News)
18 Oct 22. Lockheed expects flat sales in 2023, growth to return in 2024.
Defense contractor Lockheed Martin doesn’t expect sales growth to return until 2024 due to lingering effects from the COVID-19 pandemic and supply chain problems, executives told investors on an earnings call Tuesday.
Until then, Lockheed chief executive Jim Taiclet said during the call, 2023 sales are likely to be essentially flat when compared to 2022.
In financial results released Tuesday, Lockheed reported nearly $16.6bn in sales in the third quarter of 2022, up slightly from the $16bn in sales over the same three-month period last year. Profits increased to nearly $1.8bn in the third quarter, about triple the $614 m recorded a year earlier. Last year, pandemic-related supply chain woes dealt a significant blow to Lockheed’s aeronautics, space and missiles and fire control sectors, dragging down profit.
Year to date, the company’s sales are down almost 5%, from $49.3bn in the first nine months of 2021 to nearly $47 bn in the same period in 2022.
Chief Financial Officer Jay Malave said on Tuesday’s call the recovery from the COVID-19 pandemic and supply chain shortages “will be more gradual than previously expected,” and drive flat sales in 2023.
Malave said Lockheed’s aeronautics sector’s sales will likely be down slightly next year, due to lower production volume on the F-35. Deliveries of the fighter next year will likely be flat, he said, but that will be because the company recorded sales in advance with long-lead procurements. He expects that to lessen in 2024.
“It’ll be a period of catch-up on sales for aero,” Malave said.
However, Malave said the company’s work on classified programs will be a bright spot for Lockheed Martin in 2023. Taiclet also said both classified programs and programs of record will “ramp up from 2023 to 2024 meaningfully,” and account for the bulk of 2024′s projected growth.
As more F-35 fighters are delivered and flying regularly around the world, he said, that will mean more sustainment work for the company.
And as the pandemic’s effects and supply chain troubles wane in 2024, Taiclet said, a steady production rate of 156 F-35s per year — roughly 80 for the U.S. and 75 for international customers — will be achievable.
Malave also said production of F-16 fighters, which Lockheed Martin is now building for foreign customers, is also expected to accelerate in 2024.
Meanwhile, Taiclet said Lockheed is “far down the road” on developing autonomous drone wingmen the Air Force wants to team with piloted fighters. He said the systems need more testing, but the company should have “hit a couple of milestones” on the program by the next earnings call in January. Taiclet said the company will be able to share more details on its status then.
He noted Lockheed is making progress on increasing production of High Mobility Artillery Rocket Systems, or HIMARS. The United States in recent months has shipped 16 HIMARS units to Ukraine, which it has used in its fight against Russia.
Lockheed advanced the funding for $65m in parts it would need to build more HIMARS, before it had a government contract for more, so it could be ready to build them quickly, Taiclet said. He said the company wants to build 96 HIMARS per year, and those long-lead time parts are now being manufactured. (Source: Defense News)
18 Oct 22. Lockheed Martin Reports Third Quarter 2022 Financial Results.
- Net sales of $16.6bn and net earnings of $1.8bn, or $6.71 per share
- Cash from operations of $3.1bn and free cash flow of $2.7bn
- Returned $2.1bn of cash to shareholders through share repurchases and dividends
- Increased share repurchase authority by $14.0bn
- Increased quarterly dividend rate 7% to $3.00 per share
- Increased backlog to $140bn
- Reaffirms 2022 financial outlook
Lockheed Martin Corporation [NYSE: LMT] today reported third quarter 2022 net sales of $16.6bn, compared to $16.0bn in the third quarter of 2021. Net earnings in the third quarter of 2022 were $1.8bn, or $6.71 per share, compared to $614m, or $2.21 per share, in the third quarter of 2021. Cash from operations was $3.1bn in the third quarter of 2022, compared to $1.9bn in the third quarter of 2021. Free cash flow was $2.7bn in the third quarter of 2022, compared to $1.6bn in the third quarter of 2021.
“Lockheed Martin delivered a solid quarter, highlighted by strength in free cash flow, orders, and operating margins, that positions us well to achieve our full-year commitments,” said Lockheed Martin Chairman, President and CEO James Taiclet. “Our continuing ability to deliver strong financial performance in turn enables further investments in the 21st Century Security technologies essential to support our customers in conducting effective Joint All-Domain Operations. These technologies include hypersonics, directed energy, and autonomy, as well as cutting edge digital capabilities in our evolving 5G.MIL® open standards-based architecture. In addition, we are investing in production and sustainment capacity for the solutions needed now to defend our allies and our nation, including F-35, Javelin and HIMARS. Moreover, we today announced an additional $14bn in share repurchase authority to go with our recently increased, industry-leading dividend for the benefit of our investors.”
Cash Flows and Capital Deployment Activities
Cash from operations in the quarter ended Sept. 25, 2022 was $3.1 bn. Capital expenditures were $405 m, resulting in free cash flow of $2.7 bn. The increase in operating and free cash flows from the third quarter of 2021 was primarily due to timing of production and billing cycles (primarily the F-35 program) impacting contract assets, the collection of receivables (primarily F-35) and deferral of cash payments for accounts payable (primarily Aeronautics).
The company’s capital deployment activities in the quarter ended Sept. 25, 2022 included the following:
- paying cash dividends of $739m; and
- repurchasing 3.4m shares for $1.4bn, of which $112m was paid in the fourth quarter of 2022 upon settlement of certain repurchased shares.
Multi-Year $14bn Share Repurchase Program and Dividend Rate Increase
On October 17, 2022, the company’s board authorized the purchase of up to an additional $14.0bn of Lockheed Martin common stock under its share repurchase program. This multi-year share repurchase program follows the substantial completion of purchases of common stock under the prior repurchase authorization. The company anticipates executing a $4.0bn accelerated share repurchase program in the fourth quarter of 2022 bringing our total share repurchases for the year to approximately $8.0bn. The remainder of the repurchase program authorization is expected to be utilized over a three-year period. The company expects to fund the repurchases through a combination of cash on hand and the issuance of debt. The stock repurchase program does not have an expiration date and may be amended or terminated by the board of directors at any time. The amount of shares ultimately purchased and the timing of purchases are at the discretion of management and subject to compliance with applicable law and regulation.
On Sept. 30, 2022, the company increased its quarterly dividend by $0.20 per share, to $3.00 per share, beginning with the dividend payment in the fourth quarter of 2022.
The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company’s business segments and reconciles these amounts to the company’s consolidated financial results.
cost of sales, and profit as these activities are eliminated in consolidation and not included in management’s evaluation of performance of each segment. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments.
Business segment operating profit excludes the FAS/CAS pension operating adjustment, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. Government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, environmental costs, stock-based compensation expense, retiree benefits, significant severance actions, significant asset impairments, gains or losses from divestitures, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit.
Changes in net sales and operating profit generally are expressed in terms of volume. Changes in volume refer to increases or decreases in sales or operating profit resulting from varying production activity levels, deliveries or service levels on individual contracts. Volume changes in segment operating profit are typically based on the current profit booking rate for a particular contract. In addition, comparability of the company’s segment sales, operating profit and operating margin may be impacted favorably or unfavorably by changes in profit booking rates on the company’s contracts. Increases in profit booking rates, typically referred to as favorable profit adjustments, usually relate to revisions in the estimated total costs to fulfill the performance obligations that reflect improved conditions on a particular contract. Conversely, conditions on a particular contract may deteriorate, resulting in an increase in the estimated total costs to fulfill the performance obligations and a reduction in the profit booking rate and are typically referred to as unfavorable profit adjustments. Increases or decreases in profit booking rates are recognized in the current period and reflect the inception-to-date effect of such changes. For more information on factors impacting comparability of our segment sales, operating profit and operating margins, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2021 and subsequent quarterly reports on Form 10-Q.
The company’s consolidated net favorable profit booking rate adjustments represented approximately 25% of total segment operating profit in the quarter ended Sept. 25, 2022, as compared to 31% in the quarter ended Sept. 26, 2021.
Aeronautics’ net sales during the quarter ended Sept. 25, 2022 increased $521m, or 8%, compared to the same period in 2021. Net sales increased by approximately $425m for the F-35 program due to the recognition of $325m of sales deferred from the second quarter of 2022 to the third quarter of 2022 until additional contractual authorization and funding was received on the Lot 15 contract and higher volume and net favorable profit adjustments on production contracts; and about $100m on classified contracts primarily due to higher volume that was partially offset by lower net favorable profit adjustments.
Aeronautics’ operating profit during the quarter ended Sept. 25, 2022 increased $45m, or 6%, compared to the same period in 2021. Operating profit increased approximately $70m for the F-35 program due to the recognition of sales and associated operating profit on the Lot 15 contract as described above and higher net favorable profit adjustments on production contracts; and about $15m for the F-22 program due to higher net favorable profit adjustments. These increases were partially offset by lower operating profit of approximately $40m on classified contracts due to the combination of lower net favorable profit adjustments and $25m of unfavorable profit adjustments recorded in the third quarter of 2022. Net favorable profit booking rate adjustments were $20m lower in the third quarter of 2022 compared to the same period in 2021.
Missiles and Fire Control
MFC’s net sales during the quarter ended Sept. 25, 2022 increased $50m, or 2%, compared to the same period in 2021. The increase was primarily attributable to higher net sales of approximately $95m for integrated air and missile defense programs due to higher volume (Patriot Advanced Capability-3 (PAC-3)). This increase was partially offset by a decrease of about $55m for sensors and global sustainment programs as a result of closeout activities related to the Warrior program in 2021.
MFC’s operating profit during the quarter ended Sept. 25, 2022 decreased $31m, or 8%, compared to the same period in 2021. The decrease was primarily attributable to lower operating profit for integrated air and missile defense programs due to lower net favorable profit adjustments of approximately $50m for the PAC-3 program and an unfavorable profit adjustment of about $40m on the Advanced Radar Threat System Variant 2 (ARTS-V2) program, partially offset by the impact of higher volume on PAC-3; and about $10m for sensors and global sustainment programs primarily due to favorable profit adjustments on the Warrior program in the third quarter of 2021 as a result of the program being terminated in March 2021. These net decreases were partially offset by unfavorable profit adjustments of approximately $25m on an energy program in the third quarter of 2021 that did not recur in 2022. Net favorable profit booking rate adjustments were $75m lower in the third quarter of 2022 compared to the same period in 2021.
Rotary and Mission Systems
RMS’ net sales during the quarter ended Sept. 25, 2022 decreased $199m, or 5%, compared to the same period in 2021. The decrease was primarily attributable to lower net sales of approximately $160m for Sikorsky helicopter programs due to lower production volume and net favorable profit adjustments (Black Hawk); and about $35m for various C6ISR (command, control, communications, computers, cyber, combat systems, intelligence, surveillance, and reconnaissance) programs due to lower volume.
RMS’ operating profit during the quarter ended Sept. 25, 2022 decreased $45m, or 10%, compared to the same period in 2021. The decrease was primarily attributable to approximately $65m for Sikorsky helicopter programs due to lower net favorable profit adjustments and volume (Black Hawk). This decrease was partially offset by an increase of about $10m for IWSS programs due primarily to $45m of unfavorable profit adjustments on a ground-based radar program in the third quarter of 2021 that did not recur in the third quarter of 2022, partially offset by lower net favorable profit adjustments on certain programs (TPQ-53 and Vertical Launching System (VLS)). Net favorable profit booking rate adjustments were $15m lower in the third quarter of 2022 compared to the same period in 2021.
Space’s net sales during the quarter ended Sept. 25, 2022 increased $183m, or 7%, compared to the same period in 2021. The increase was primarily attributable to higher net sales of approximately $155m for strategic and missile defense programs due to higher development volume (Next Generation Interceptor (NGI)).
Space’s operating profit during the quarter ended Sept. 25, 2022 increased $37m, or 14%, compared to the same period in 2021. The increase was primarily attributable to approximately $50m of higher equity earnings from the company’s investment in United Launch Alliance (ULA) due to higher launch volume and launch mix. This increase was partially offset by a decrease of about $15m for commercial civil space programs due to lower net favorable profit adjustments and lower volume (primarily the Orion and Human Lander System (HLS) programs). Operating profit for national security space programs was comparable as an unfavorable profit adjustment of $45m on a commercial ground solutions program in the third quarter of 2021 that did not recur was offset by lower net favorable profit adjustments (Space-Based Infrared System (SBIRS) and classified programs). Net favorable profit booking rate adjustments were $15m lower in the third quarter of 2022 compared to the same period in 2021.
Total equity earnings (primarily ULA) represented approximately $50m, or 17%, of Space’s operating profit during the quarter ended Sept. 25, 2022. Total equity earnings were not significant during the quarter ended Sept. 26, 2021.
17 Oct 22. Oliver Wyman Enters into Agreement to Acquire Avascent. Oliver Wyman, a global management consulting firm and a business of Marsh McLennan [NYSE: MMC], announced today that it has entered into an agreement to acquire Avascent, an Aerospace and Defense (A&D) management consulting firm focused on the corporate and private equity sectors.
Oliver Wyman Enters into Agreement to Acquire Avascent
Avascent complements Oliver Wyman’s strong position and reputation across the aviation, aerospace and defense industry globally. For more than fifteen years, Avascent has been the preeminent specialist management consulting firm serving clients across aerospace, defense, and government sectors. Avascent is also the leading boutique private equity and M&A advisor in the A&D space and the combination of Avascent and Oliver Wyman will create a team with unparalleled experience in both deal and post-transaction work.
“Avascent will complement Oliver Wyman’s expertise, and strengthen it significantly in the Aerospace and Defense sector, both with our corporate and private equity clients,” said Nick Studer, President and CEO, Oliver Wyman. “The company also has a similar business focus – built on deep industry expertise, analytics, impact and collaboration – and we believe these values will benefit our clients.”
“We are excited to join Oliver Wyman, a company that shares both our dedication to deep sector expertise and an open, collaborative culture,” said Steve Irwin, Avascent President. “Joining Oliver Wyman gives us access to the breadth and depth of capabilities necessary to accelerate our growth by addressing the full spectrum of challenges faced by A&D leaders today.”
Avascent is based in the US, Canada, UK and France and with an extended network of clients and senior advisors around the world. A team of approximately 130 professionals, including 10 partners, will join Oliver Wyman and will be integrated into Oliver Wyman’s Transportation & Services and Private Capital practices.
The terms of the transaction were not disclosed. The deal is expected to close before the end of the year.
Avascent is the leading strategy consulting firm serving clients operating in government-driven markets. Working with corporate leaders and financial investors, Avascent delivers sophisticated, fact-based solutions in the areas of strategic growth, value capture, and mergers and acquisitions support. With deep sector expertise, analytically rigorous consulting methodologies, and a uniquely flexible service model, Avascent provides clients with the insights and advice they need to succeed in dynamic customer environments. To learn more about Avascent, visit avascent.com.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in more than 70 cities across 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 6,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman. (Source: PR Newswire)
17 Oct 22. Seraphim Space Investment Trust plc (LSE: SSIT), the world’s first SpaceTech investment company, announces its audited results for the financial year ended 30 June 2022.
Net assets of £239.3m at 30 June 2022
150.0m shares issued pursuant to IPO, further 89.4m shares issued pursuant to acquisition of portfolio of holdings in 19 companies acquired from Seraphim Space LP
Positive growth in NAV per share since IPO, up 1.9% over the period to 99.97p with the strength of the private company portfolio (including FX gains) offset by weakening valuations of the listed portfolio
NAV per share for three months ended 30 June 2022 down 4.1% principally due to listed portfolio and the reduction in listed comparables (where used for the valuation of private portfolio companies)
Valuation of listed portfolio, representing 7.8% of NAV, materially impacted by weakening equity market performance and broader sector rotation away from high-growth and technology companies
Strong levels of investment activity with seven new investments and nine follow-on transactions closed during the period with aggregate cost of £87.1m.
Portfolio now comprises 26 companies valued at £186.1m, being 104.3% of cost
Portfolio performance underpinned by growth of climate capabilities and government budgets for Space-related defence with 94% of aggregate revenues of the private companies in the top 10 holdings (nine companies representing 79% of fair value) being climate- or defence-related
Private companies in top 10 holdings reported fair value-weighted average annual revenue and bookings growth of 51.3% and 71.2% respectively
Ongoing investor appetite for SpaceTech sector is reflected in private company portfolio, which collectively raised $703m of new equity capital over the period; recent rounds established enterprise valuations at 30 June 2022 for most private company portfolio holdings
Portfolio companies, overall, well capitalised for year ahead, whilst SSIT has strong buffer of liquid resources of £57.7m at 30 June 2022, to fund portfolio requirements and selectively continue to add to portfolio
Angela Lane joined SSIT’s Board
Three key appointments made to SSIT’s Investment Manager, Seraphim Space Manager LLP (“Seraphim Space”): Sarah Shackleton as COO, Patrick McCall as Venture Partner and Andre Ronsoehr as Investment Principal
Post Period Highlights
- Further £8.9m deployed, with three new investments and four follow-on transactions
- New investments include Voyager Space Holdings, a next generation “Space Prime” looking to build world’s first commercial Space station, and Taranis, an agriculture-focused AI company that uses Earth observation data to optimise crop yields and increase global food supply
- Follow-on funding included PlanetWatchers, which focuses on crop insurance market
- Development of Seraphim Space’s enhanced ESG framework to review prospective and ongoing SSIT portfolio companies’ exposure to climate, sustainability and social impact risk as part of its investment process completed; proprietary tool now identifies gaps where Seraphim Space can assist portfolio companies in developing enhanced processes to reach their ESG objectives in their own operations and throughout their value and supply chains
- Generation Space, the US arm of Seraphim Space, commenced its Space Accelerator programme in the US, operating alongside its existing European Space Accelerator programme and generating additional high-quality deal flow
Will Whitehorn, Chair of Seraphim Space Investment Trust plc, commented: “Despite the global economic headwinds, the Board is pleased with the progress made to date and remains very positive about the scale of opportunity for the Company. In particular, a combination of the climate crisis and the war in Ukraine has resulted in significant increases in government budgets for the acquisition of SpaceTech-related capabilities. The Company is well positioned to benefit from these secular trends, with material proportions of the portfolio companies’ revenue relating to defence and/or climate and sustainability.
The fundamentals driving the change in the SpaceTech sector remain robust. In addition, as governments are significant customers to many portfolio companies, we expect this to provide some protection against potential reduced demand within the commercial sector in the face of rising inflation and interest rates. We remain confident that, despite the volatility which continues to impact markets globally, the Company is well placed to achieve its investment objective of generating capital growth over the long term.”
Mark Boggett, Chief Executive Officer, Seraphim Space Manager LLP, said: We are delighted to report that the NAV of the portfolio has increased since the time of the Company’s IPO in July 2021, despite the macro-economic backdrop. During this time, we have further validated Seraphim Space’s model and strengthened our status as the leading specialist SpaceTech investor globally. Our position at the epicentre of the New Space ecosystem continues to generate large volumes of high-quality investment opportunities from seed stage through to pre-IPO funding rounds. We expect this to be further enhanced during the year ahead through the expansion into the US market of our affiliated accelerator activities and our new US subsidiary, Generation Space LLC.
We believe that the Company’s portfolio is well placed to weather whatever macro-economic challenges lie ahead, with our portfolio companies remaining well capitalised. With the secular trends relating to global security, food security, climate change and sustainability expected to accelerate, we would anticipate that demand for the products and services of the Company’s portfolio companies – particularly from governments – will continue to grow and should result in the portfolio delivering strong growth metrics over the long term.”
A copy of the Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection here.
10 Oct 22. With sat constellations in mind, Neuraspace raises millions of euros in financing. Neuraspace has raised financing for sensor infrastructure as well as the company’s growth strategy with the support of PRR – the Recovery and Resilience Plan and NextGeneration EU Funds.
After having raised 2,5m euro from investors in Portugal, with these 25m euro, Neuraspace now takes a decisive step to establish itself as a key player in STM with a solution that is already being used by satellite operators which plan to significantly increase the presence of their satellites in space.
Morgan Stanley forecasts the space industry, which is today at $350bn, to top 1trn dollars by 2040. However, this growth is threatened by space debris and an increasing number of active satellites. Satellite operators already pay the price, with a deluge of alerts, most of them false, and therefore performing unnecessary maneuvers. With an emergency maneuver in LEO costing 25,000 euros, a 300-satellite constellation may receive about 580 alerts per year requiring human intervention and satellite maneuver, costing 14m euros per year. To address these problems, current approaches face serious challenges:
(1) Lack of data on space debris
(2) High number of false alerts and a large uncertainty
(3) Lack of scalability and automation for an increasing number of assets
Neuraspace is the first AI / ML (Artificial Intelligence / Machine Language) platform addressing these New Space challenges. Our customers are satellite operators facing these challenges to perform space operations, and other stakeholders in need of these services (e.g insurance providers for satellite operators, software providers and regulators). This endeavor will allow the company to acquire sensor infrastructure (radars) and boost the company growth and product development.
The product is a SaaS (Software-as-a-Service) built on three key pillars…
(1) Data Fusion: a persistent and reliable data source with the acquisition of radars infrastructure allowing Neuraspace to have a living catalogue of the objects which the radars are able to track and a catalogue of conjunctions.
(2) AI + ML, the key to automate complex decision processes.
(3) Maneuvering Automation: an end-to-end automated 24/7 AI-enabled collision risk prediction with informative insights based on operator constraints and priorities.
The project’s consorcia englobes, in addition to Neurspace, GMV as end user and four research partners (Instituto pedro nunes, Universidade Nova de Lisboa, Universidade de Coimbra and Instituto Superior Técnico)
According to Chiara Manfletti, Chief Operations Officer (COO) at Neuraspace, “Our Data fusion and AI approach and technology are a key differentiator to our competitors and a major benefit to our customers. This milestone is a very important step in strengthening both of these pillars. Neuraspace is set out to be a European-born global star in Space Traffic Management and PRR will accelerate us on our path to providing a benchmark Space Traffic Management solution which will ensure that the Space economy can actually grow to be the 1trn USD market that it is projected to become in 2040.” (Source: Satnews)
29 Sep 22. Bertin Technologies announces the acquisition of Environics Oy. On September 29, 2022, Bertin Technologies announced the acquisition of the Finnish company Environics Oy, previously owned by Verso Capital.
The European industrial company for critical scientific instrumentation Bertin Technologies has signed the agreement to acquire the Finnish company Environics. This transaction, backed by Bertin Technologies‘ owner FCDE (Fonds de Consolidation et de Développement des Entreprises) will result in the creation of a European leading player in CBRN* detection, identification and monitoring equipment and systems.
This strategic move is following the successful integration of Swedish Exensor Technology AB in 2018, which became Bertin Exensor, and will further strengthen the development axis of Bertin Technologies in the Nordics. It will allow the authorities, platform manufacturers, critical industries and first responders to have access to a full portfolio of equipment and integrated solutions to counter rising CBRN threats.
Following the signature of the acquisition agreement, Bruno Vallayer – President of Bertin Technologies – stated: “This new entity, which will be named Bertin Environics, will further increase Europe’s technological edge, on the battlefield and for population safety, while offering a unique sovereign capability to develop and manufacture in Europe high-end solutions for crisis management. The combination of Bertin Technologies and Environics’ respective portfolio of solutions, as well as geographical footprint, will be a force multiplier to prospect the fast-paced CBRN market.
Kirsi Hedman – CEO of Environics Oy – said: “We are pleased to join forces with Bertin Technologies, which values the history of our strong footprint in CBRN business and is committed to a long-term development of our company. We are very enthusiastic about developing synergies between the two companies for the benefit of our customers, the Group and our personnel.”
The transaction is subject to customary regulatory approvals.
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.