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21 Jun 24. EADS considers capital increase-Figaro paper. European defence and aerospace group EADS could ask for a capital increase at its next annual meeting to replenish its finances following a cash bleeding caused by troubled plane unit Airbus, the Le Figaro newspaper said on Thursday.
Citing what it called “a very good source” Le Figaro said that while the French state, which has a 15 percent stake, backed the idea, private holders Lagardere and DaimlerChrysler are reticent and prefer reducing their investment.
A capital hike would reduce the stakes of the current big shareholders — if they don’t participate — and could change the corporate governance structure.
“One cannot solve the equation of a capital increase without solving the problem of corporate governance,” Le Figaro quoted its source.
“How can one explain that with 7.5 percent Lagardere runs the company (EADS) while the (French) state with 15 percent has nothing to say? How to justify this eternal Franco-German power game,” the source said.
“For a fund like Fidelity, which has 6 percent of the capital, that is incomprehensible. Everything has to be overhauled — the Franco-German pact, the two-headed management that makes EADS ungovernable,” Le Figaro quoted the source as saying.
On Wednesday, Airbus chairman and EADS co-chief executive Louis Gallois, unveiling details of the Power8 restructuring plan to cut costs, said there was no urgent need to raise cash. (Source: Google/Reuters)
20 Jun 24. Honeywell backs growth drive with $1.9bn aerospace and defense deal. Honeywell (HON.O) will buy aerospace and defense technology provider CAES Systems for $1.9bn, the U.S. manufacturing giant said on Thursday, part of its focus on three broader business trends to drive growth.
Since taking charge as chief executive in June 2023, Vimal Kapur has steered the company toward three “compelling megatrends” – automation, the future of aviation and energy transition.
The all-cash transaction with private equity firm Advent International for CAES is Honeywell’s third deal this year.
“We do believe there has been a demonstrable uptick in deal activity this year under Vimal’s leadership, a growth dimension that was notably missing under the previous CEO,” said Deane Dray, equity analyst at RBC Capital Markets.
CAES develops electronics such as antenna systems and communication networks for aerospace and defense companies, and the deal comes when orders have surged in response to drawn-out conflicts, including Russia-Ukraine and Israel-Hamas.
The deal complements Honeywell’s offerings on programs such as Lockheed Martin’s (LMT.N), F-35, Boeing’s (BA.N), EA-18G, and missiles including Raytheon’s (RTX.N), AMRAAM, Sheila Kahyaoglu, equity analyst at Jefferies, said in a note.
Advent completed its buyout of CAES (then Cobham Advanced Electronic Solutions) for $5bn in January 2020 and later carved out CAES as a standalone entity in 2021.
The CAES deal, which is expected to close in the second half of 2024, will add to Honeywell’s adjusted earnings per share in the first full year of ownership.
With the CAES acquisition, the company has deployed just under $10 bn, or about 40% of the targeted amount set in 2023 for M&As and buybacks, halfway through the targeted timeline of three years, Dray said.
The deal will provide additional automated facilities and about 2,200 employees, many of them highly skilled engineers who could boost the aerospace operations, Honeywell said. (Source: Reuters)
19 Jun 24. Denmark’s largest pension fund ATP invests in Terma and joins the Board of Directors. The company will use the new capital in connection with a new growth strategy.
Denmark’s largest defense company and leading high-tech company will for the first time have shared ownership. This will happen when ATP Long-Term Danish Capital becomes a minority owner in Terma.
Thus, ATP Long-Term Danish Capital invests in a successful Danish company, which today employs more than 1,700 employees – of which the majority work at the two large production facilities in Eastern Jutland.
The investment is an important step on the road to growth of the Danish defense industry, says Terma:
“There is a great need for the Danish defense industry to be able to deliver new technologies and more equipment. We need to be able to do more ourselves. This need has been expressed by the government, the European Commission, and many others. Therefore, we at Terma have launched an ambitious growth strategy where we will double our turnover over the next three years. Of course, this requires capital and a solid and long-term ownership that wants to be part of the growth journey, and we are incredibly pleased that ATP wants to do that,” says Carsten Dilling, Chairman of the Board of Directors of Terma.
An attractive return and a secure contribution to society
For ATP, the investment in Terma is part of the ambitions to ensure solid and long-term returns for Danes’ pension savings. The investment is made through ATP Long-Term Danish Capital and consists of a single-digit DKK bn amount in the form of equity investment and a loan facility.
“Terma is a very good fit for what ATP wants to do with Long-Term Danish Capital. It is an unlisted Danish company with a clear global potential – and here, as a long-term investor, we can act as a sparring partner on the coming part of the growth journey,” says Mikkel Svenstrup, Chief Investment Officer at ATP.
He adds: “In Terma, ATP sees both the opportunity to create an attractive return for our members and to invest in a growth company that creates new Danish jobs. In addition to being an investment with potential, ATP is making an important contribution with the capital injection at a time characterized by security policy instability.”
The investment is the third single investment for ATP Long-Term Danish Capital.
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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR).
For more information visit www.tcibr.com and www.enterprisecontrol.co.uk
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