Sponsored by SPX Communication Technologies (TCI & ECS)
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09 Oct 24. Aurizn Group announces McR Defence acquisition and leadership changes. Australian defence technology provider Aurizn Group has set the stage for global expansion with the acquisition of McR Defence and new leadership changes. Following the strategic acquisition of McR Defence from national independent law firm McCullough Robertson in August, Brett Sangster has been appointed as the CEO of Aurizn Group, with Andrew Tymms appointed as board chair.
Sangster and Tymms bring a unique balance of operational and strategic experience to drive Aurizn’s ambitious vision to deliver state-of-the-art solutions and expand its influence both in Australia and internationally.
Aurizn co-founders Ganen Ganeswaran and Bjorn Wharf have stepped into non-executive director roles to support Aurizn’s next exciting chapter of growth as a leading provider of cutting-edge technology solutions to the defence as well as science and technology industries.
“By merging Aurizn’s advanced STEM, simulation and technology expertise with McR Defence’s commercial consulting, program management and cyber security assurance and advisory services, we diversify our capability sets and position ourselves to become a trusted supplier to Defence, government, defence industry and critical infrastructure clients,” group chief executive officer Brett Sangster said.
“We’re excited to partner with Pemba Capital Partners to pursue an ambitious vision for growth that includes supporting major initiatives such as taking critical technologies into AUKUS and allied nations.
“The defence sector, both in Australia and internationally, presents enormous opportunities for innovation and strategic growth. With ever-evolving advances in speed-to-capability technologies, Aurizn is responding with cutting-edge solutions combining our scientific and engineering know-how to integrate simulation, advance sensing and AI.”
Sangster’s impressive track record includes founding McR Defence as a partner at McCullough Robertson and holding senior leadership positions including managing director at Downer Defence, where he spearheaded its defence professional services, engineering, construction and maintenance business.
His 14 years of military experience, spanning the Australian Army and Special Operations communities, will be key in shaping Aurizn’s trajectory and driving its future success domestically and internationally.
Newly appointed board chair Andrew Tymms said he was invested in helping Aurizn grow “by delivering tangible results, innovation and high-impact outcomes for Defence, government and enterprise clients”.
Tymms, a partner in Bain & Company’s private equity and M&A practices, has more than two decades’ experience supporting private equity and alternative investment firms globally, bringing extensive expertise and insight to his new role at Aurizn. (Source: Defence Connect)
10 Oct 24. Solid State secures two significant US defence contracts.
Solid State LON:SOLI, the Redditch-based electronic components distribution and manufacturing company has announced that it has secured, through its subsidiary Custom Power USA, two “significant” contracts with a combined value of USD5.1m (GBP3.8m) from two prime defence contractors to supply battery packs.
As previously reported, Solid State operates through two divisions, its Systems Division, which encompasses the operating companies Steatite, Active Silicon and Custom Power; and its Components Division which includes the operational units Solsta (formerly Solid State Supplies) and Pacer. The company has been in business for 53-years, has been a component of AIM for 27-years and employs around 400 people. Its subsidiary Steatite, which Solid State acquired in 2002, was founded in 1938.
Close working relationship with industry
The new contracts are through Solid State’s Systems Division, which through its American subsidiary worked at length with the US defence contractors to integrate the company’s products into the contractors’ equipment. Solid State will provide ruggedised battery packs designed for use in harsh environments and deployed in marine and aerospace applications.
Solid State said that deliveries will begin early next year, and the contracts will be fulfilled by the end of 2025. The company said that both programmes have the potential for multi-year framework agreements.
Solid State announced record revenues of GBP163.3m and record profits of GBP12.2m in its last set of results for the year to end-March 2025, and these contracts have helped maintain the electronic component’s forward momentum.
Solid State playing to Custom Power’s key strengths
Matthew Richards, managing director of subsidiary Custom Power said in a statement: “Whilst diverse in operating environments, these two contracts respectively required solutions that optimised size, weight and power for operation in harsh environments, which are key strengths for Custom Power.”
The contract wins come on the back of news of the GBP1.4m acquisition of Cheshire-based Gateway Electronic Components, a private firm that specialises in ferrite and magnetic components and solutions. Solid State already manufactures its own brand of machined ferrite products, so Gateway’s range will complement the products that Solid State already sells and Gateway will join Solsta. The AIM-listed manufacturer will pay a net asset cash adjustment of GBP100,000 on completion and GBP500,000 final settlement.
Solid State’s shares opened trading on 8th October at 253.4p, up 11.6% over one-year and down 10.5% over the year-to-date with its shares ranging between 202p and 308p over a 52-week period. The company has a market cap of GBP145m and is expecting to announce a trading update for the six months to end-September next month. (Source: https://www.thearmchairtrader.com/)
08 Oct 24. Sandock Austral Shipyards expands global reach with strategic partnerships. Durban-based Sandock Austral Shipyards (SAS) is rapidly expanding its footprint in the global shipbuilding industry, positioning itself as a key player in the African market. The company has recently entered into strategic partnerships with leading international firms, invested in infrastructure upgrades and secured significant contracts.
One of the most notable developments for SAS is its exclusive product partnership with Italian shipbuilding powerhouse Fincantieri and its Canadian subsidiary Vard Marine. This tripartite alliance focuses on the development and production of the 53 metre Afrika Offshore Patrol Vessel, based on the Vard 7 055 design and designed specifically to meet the unique needs of African nations. The partnership combines the global experience and naval architecture and design capabilities of Fincantieri and Vard Marine with SAS’s regional expertise and manufacturing capabilities.
Another significant milestone for SAS is its recently announced technology partnership across all projects with Vera Navis, the largest firm of Naval Architects and Marine Engineers in Portugal, supporting its collaboration with South African marine architects Icarus Marine.
“The intention behind the partnership is to bring European design and manufacturing technology, driven by artificial intelligence that will substantially increase South Africa’s productivity and efficiency,” said SAS CEO Prasheen Maharaj.
“As a result of the company’s partnership with Vera Navis, we gained the confidence of BRS Shipbrokers, the second largest Ship Broking company in the world based in Geneva, Switzerland, who have placed a serious inquiry on us to build what could potentially be an order for six CSOVs (Commissioning Service Operation Vessels)”, Maharaj said. This contract value is approximately R8.5bn.
“We are thrilled to partner with Sandock Austral Shipyards and bring our expertise in European technology to the table,” said Pedro Antunes and Luis Batista, Joint CEOs of Vera Navis. “Together, we will create a highly efficient and competitive shipyard that can cater to the growing demands of the global market.”
SAS is also making significant investments in its physical infrastructure at its Durban facility to support the construction of larger vessels, with SAS investing R150 m in a new slipway and acquiring advanced high-tech equipment which will significantly enhance its shipbuilding capabilities. The company is also seeking a long-term lease from Transnet to secure its future operations.
As SAS continues to grow and diversify its operations, it is poised to become a major force in the global shipbuilding industry. Its strategic partnerships, infrastructure investments and focus on innovation position the company for long-term success, Maharaj said.
SAS’s current flagship project, the construction of the South African Navy’s new hydrographic survey vessel, the future SAS Nelson Mandela, is progressing well despite several challenges. Being built under Project Hotel, this contract is based on Vard Marine’s VARD 9 105 design. It aims to replace the ageing SAS Protea, which has served in the hydrographic survey role for 52 years. Although the timeline for the vessel’s completion has been extended due to floods, riots, and a steel strike, SAS is confident that the SAS Nelson Mandela will begin harbour trials next year.
Looking ahead, SAS is eyeing even larger projects, including the replacement of the South African Navy’s replenishment vessel, SAS Drakensberg. SAS is interested in this potential project, which is expected to come after the Navy completes its refit programme.
The Drakensberg replacement is seen as a major opportunity for SAS to further establish itself as a leading shipbuilder for defence-related vessels in South Africa.
With alliances with Vera Navis, Fincantieri and Vard Marine, together with infrastructure improvements, SAS is bringing advanced European technology and expertise to South Africa, enhancing its capacity to meet both local and international demand. (Source: https://www.defenceweb.co.za/)
07 Oct 24. Apollo Funds to take Barnes Group private in $3.6bn deal. Barnes Group (B.N) said on Monday that private equity Apollo Funds would acquire the aerospace parts maker in an about $3.6bn deal, sending its shares up nearly 3% in premarket trade.
As part of the deal, Barnes shareholders will receive $47.50 per share in cash, representing about a 5% premium to the last close. The transaction is expected to close before the end of the first quarter of 2025.
Reuters on Friday reported that Apollo Global Management would acquire the aerospace components manufacturer, citing people familiar with the matter. Apollo’s offer represents a near 18.5% premium to Barnes’ close on Thursday.
Apollo has been expanding its portfolio with more industrial companies to take advantage of the growing demand in the manufacturing sector.
Last year, the private equity firm struck an $8.1 bn deal to acquire chemical company Univar Solutions and agreed to buy industrial components maker Arconic for about $3 bn.
Apollo said it expected Barnes’ businesses to benefit from long-term aerospace trends at a time when travel demand is surging.
Barnes, founded in 1857, makes components for companies across sectors such as packaging, healthcare, aerospace, consumer and electronics.
In the quarter ended June 30, the company reported a net loss of $46.8 m and revenue growth of 12% to $382.2 m, which fell short of analysts’ expectations.
The company has around 5,700 employees and operates 43 manufacturing locations, according to its website.
Barnes has also been under pressure from activist investor Irenic Capital, which acquired a stake in the company in 2022, and has pushed it to shake up its board and explore a strategic review.
(Source: Reuters)
07 Oct 24. Lynred acquires New Imaging Technologies to consolidate leadership in infrared sensors. Acquisition of Paris-based SWIR imaging provider expands Lynred’s product portfolio to include coveted large format shortwave sensors with small pixel pitch.
Lynred, a leading global provider of high-quality infrared sensors for the aerospace, defense and commercial markets, today announces its acquisition of New Imaging Technologies, a Paris-based shortwave infrared (SWIR) imaging modules and sensors provider. In a strategic move to consolidate its leadership in infrared sensors, Lynred’s product portfolio will expand to include high-definition large array SWIR sensors in small pixel pitch, bolstering its product offering across all wavelength bands (short to very longwave). The transaction is expected to close in Q4, 2024 and is subject to customary conditions.
The deal includes New Imaging Technologies’ large and innovative portfolio of SWIR products (imaging sensors and modules) and a portfolio of wide dynamic range patents. This enables Lynred to offer global customers large format SWIR sensors with advanced capabilities for applications in markets where AI, deep learning and multispectral imaging are driving growth.
New Imaging Technologies (NIT) is the only European firm to manufacture and market a SWIR HD1080p array and associated module at a pixel size of 8µm, a key asset for several applications that Lynred will now leverage.
“Lynred’s acquisition of NIT is a growth accelerator. We will shorten time to market and leverage synergies in offering state-of-the-art SWIR products. The global market for SWIR infrared imaging for machine vision is growing fast, as well as for defense applications, such as laser detection and in new space,” said Hervé Bouaziz, executive president at Lynred. “NIT brings to Lynred the agility of a small, innovative organization, with an extensive product offering able to cater to our large customer base. As we share complementary industrial supply chains and technical skills, we can deliver highly competitive SWIR imaging sensors and modules to customers.”
This strategic acquisition is yet another significant investment Lynred is making in order to strengthen its leadership in infrared, a critical technology for a growing range of commercial applications and sovereign activities. In parallel, Lynred is investing significantly in its ongoing Campus project. Campus includes the construction of state-of-the-art clean rooms that will double Lynred’s current capacity.
Lynred and NIT will attend Vision Stuttgart in Germany (October 8-10), booth #8C46, and AUSA (October 14-16), in Washington DC, booth #8015, showcasing products based on the companies’ latest technological achievements. These two important trade shows will give them the opportunity to share further information and answer any questions about the acquisition.
About New Imaging Technologies
NIT is a vertically integrated company with around 25 employees, designing and manufacturing SWIR imaging sensors and modules based upon InGaAs focal plane arrays, within the growing and dynamic market of SWIR imaging. NIT has developed a line of products dedicated to SWIR applications which over the years has proven to be a growing success. NIT is the only European company to offer a SWIR HD1080p array and module at a pixel size of 8µm. Moreover, NIT has developed and invested in a manufacturing line of InGaAs sensors using its unique proprietary technology. Located at the heart of the French technological center of Paris Saclay, NIT sells its products to a variety of customers worldwide.
www.new-imaging-technologies.com
About Lynred
Lynred, alongside its subsidiaries, Lynred USA and Lynred Asia-Pacific, is a global leader in designing and manufacturing high quality infrared technologies for aerospace, defense and commercial markets. It has a vast portfolio of infrared detectors that covers the entire electromagnetic spectrum from near to very far infrared. The Group’s products are at the center of multiple military programs and applications and are key components in many top brands in commercial thermal imaging equipment sold across Europe, Asia and North America. Lynred is the leading European manufacturer for IR detectors deployed in space.
07 Oct 24. SRT building momentum. Simon Thompson: It has won a huge contract that should underpin a transformational year for the company’s earnings
• $213m contract award
• $1.5bn validated sales pipeline
• Share price up 25 per cent
Aim-traded SRT Marine Systems (SRT: 45p), a global leader in technology used to track maritime vessels, has won a massive $213mn (£162mn) contract to deliver an integrated maritime surveillance system for a sovereign government. The award is subject to completion of the formal contract and associated performance bond, both of which are under way and expected to be completed prior to the end of November, with implementation commencing immediately thereafter.
SRT will provide the government’s national coastguard with a new state-of-the-art national maritime surveillance system, which integrates multi-sensor surveillance platforms, both fixed and mobile, with several integrated command centres located across the country. Listed as one of two $200mn potential projects in a trading update in June 2024, the contract includes the turn-key delivery of the system within two years, followed by a 10-year support and maintenance package.
In May 2023, SRT won a $180m contract to supply an integrated maritime surveillance and intelligence system to a Southeast Asian national coastguard, which also includes long-term multi-year support components. The project is being financed by an inter-government loan between UK Export Finance and the country in question. Finalising the documentation has been a drawn-out process, completely outside SRT’s control, and has pushed back the contract start date. However, the first milestones, worth around £45m, and significant associated revenues and cash collection via the project loan mechanism should now fall into the current financial year to 30 June 2025.
Improving contract momentum
In addition, SRT should book £9m of milestones on the second phase (gross value of £12.5m) of a Middle East Border Agency contract in the current financial year, too. The start date of the second phase was delayed due to a combination of the customer amending the exact scope of the project on several occasions, along with the required redrafting and internal verification of formal project documentation. The third phase of the contract, worth £11.5mn, should start in 2025.
In an investor call on 30 September 2024, SRT’s management highlighted ongoing positive momentum across the business, so the latest awards are a clear vindication of their confidence. Moreover, they highlight other contracts at an advanced stage in the company’s $1.5bn validated sales pipeline, so there is scope for further positive newsflow in the coming months.
True, the aforementioned project delays mean that SRT will only report annual revenue of around £14m (mainly from its transceiver business) and a disappointing loss in the financial year to 30 June 2024. Analysts at house broker Cavendish are awaiting further details on project implementation periods and revenue guidance before releasing their updated estimates, so forecasts for both the 2024 and 2025 financial years are currently under review.
However, it’s reasonable to assume that SRT should be able to deliver a pre-tax profit margin of 10 per cent on revenue once both the two huge contracts are up and running. It’s not beyond the realms of possibility that SRT could deliver £75mn of revenue in the 2024-25 financial year, of which £15m would be derived from its transceiver business. Expect updated guidance from management when SRT releases its 2024 annual results in the coming weeks.
Importantly, SRT completed an equity cash raise of £10.5m at 35p a share in January 2024. It placed the £100m market capitalisation company on a strong cash footing to withstand the variances that come with its strategy of becoming a large global maritime systems business. In addition, SRT retains an undrawn capacity of £16.7m on a secured loan note programme at the recent 2024 financial year-end.
Volatile share price
Shares in SRT have been incredibly volatile since I last rated them a buy at 38.5p (‘Get on board for a profitable voyage’, 20 November 2023). Projects delays are only one of the reasons why.
The other being that a complaint was filed earlier this year against the company, chief executive Simon Tucker and chief finance officer Richard Hurd in the Philippines in relation to the award of a fisheries management contract. The board’s position is that the complaint is entirely baseless and without merit and it has been fully co-operating with the due process. The complaint against both Hurd and the company has now been formally dismissed by the Ombudsman and I would anticipate the same outcome for the one against Tucker in due course.
So, with the Aim-traded shares rising 25 per cent to 45p following today’s announcement, I rate them a firm hold at the current level ahead of the next trading update at the annual results. However, I see upgrade potential if earnings guidance for the 2024-25 financial year is better than I anticipate. Hold. (Source: Investors Chronicle)
04 Oct 24. C5 Capital Partners with Ukraine’s Brave1 Accelerator to Advance Ukraine’s Defense Innovation. C5 Capital, a specialist venture capital firm based in Washington DC and London announces a strategic partnership with Brave1, Ukraine’s premier defense technology accelerator. This collaboration will support Ukraine’s innovative tech startups, accelerating the development and application of critical technologies for the defense of Ukraine against Russian aggression.
Brave1 leads Ukraine’s defense innovation ecosystem. Since its launch, the accelerator has evaluated more than 2,600 cutting-edge defense-focused innovations. This remarkable achievement has established Ukraine as emerging global leader in defense technology and innovation.
C5 Capital’s partnership will provide investment capital and strategic expertise needed to help Ukrainian founders grow and scale their defense startups, whose innovations are already being tested and deployed in battlefield conditions.
“C5 Capital’s strategic partnership with Brave1 is focused on empowering Ukraine’s courageous founders, who are building innovative companies in defense of Ukraine and all of us. Today there is nothing more important than fighting with allies,” said Andre Pienaar, the Founder of C5 Capital.
“Ukraine is emerging as a global leader in defense innovation and a powerhouse of research and development. Its defense tech startups showcase a relentless drive born from defending their homeland. We intend to bring our expertise developing and investing in innovative technologies for national defense to support victory for Ukraine,” said Rear Admiral Michael Hewitt, Co-Founder and CEO of IP3.
Ukraine: The New Hub of Defense Innovation
The conflict in Ukraine has sparked a wave of technological breakthroughs, especially in artificial intelligence (AI) and autonomous systems. Often referred to as the “algorithm war,” AI-driven tools have played a pivotal role in processing vast amounts of battlefield data, enabling Ukraine to respond faster and more effectively.
Brave1 plays a crucial role in fast-tracking the development and deployment of such technologies. By connecting startups with essential resources, the accelerator transforms concepts into operational systems at an accelerated pace.
The Need for Private Investment
Brave1 issued $7.5m in grants for startups and aims to scale funding in 2024. Over the first two years of the war, Ukrainian startups have attracted more than $20m of global investment.
“Private investment is essential for sustaining innovation in defense technology,” said Natalia Kushnerska, Brave1 Project Lead. “Our partnership with C5 is a crucial step toward building a resilient and innovative ecosystem. The technologies developed in Ukraine today will define the future of global defense.”
For more information on this strategic alliance, please visit the full article and interview published by National Security News: Ukraine Boosts Military Innovation to Confront Russian Hostilities Independently.
About C5 Capital:
C5 Capital (C5) is a specialist venture capital firm that invests in cybersecurity, space and energy security. C5’s investment strategy is focused on building long-term relationships with resilient founders that share in our mission to enhance national security and build a secure digital future. C5 Capital is based in Washington, DC and London. For more information, visit: www.C5Capital.com.
About Brave1:
Brave1 is a cluster for the defense tech development in Ukraine, established by the Ministry of Digital Transformation, the Ministry of Defense, the General Staff of the Armed Forces of Ukraine, the National Security and Defense Council, the Ministry for Strategic Industries, and the Ministry of Economy. For more information, visit: https://brave1.gov.ua/en/ (Source: BUSINESS WIRE)
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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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