Systems Proceeds With Tadiran's Takeover
Elbit Systems Ltd. (Nasdaq: ESLT) purchased today
over 6.6 million Tadiran Communications Ltd. (TASE: TDCM) shares
on the Tel-Aviv Stock Exchange (TASE), paying about $350 million
based on previously announced tender offer. Completing the two-phase
takeover, Elbit Systems will now integrate Tadiran Communications
as a wholly owned private company. President and CEO of Elbit
Systems Ltd, Joseph Ackerman noted that the acquisition is in
line with the company's long-term strategy of growth through
mergers and acquisitions of complementary companies with high
Rockwell Collins, Inc. (NYSE:COL) reported Earnings
Per Share (EPS) of 82 cents for the second quarter of 2007 representing
a 26% increase over Q2/06 EPS. The most significant growth (22%)
is attributed to commercial operations while sales of defense
electronics increased only 5%. Yet, high margins for both sections
contributed to the increase in earning, leading the company
to raise its expectations for increased sales and earning for
the entire year.
L-3 reported today a 14.2% increase in Earnings
per Diluted Share (EPS) for the first quarter of 2007, amounting
to $1.29 (compared to $1.13 in Q1/06). Net Sales increased 13.6%
to a total of $3.3 Billion; L3 added $3.9 billion in funded
new orders to a total funded backlog of $9.3 Billion as of March
31, 2007. The company added two new companies to its portfolio,
it announced the planned acquisition of satellite communications
provider Global Communications Solutions, Inc. (GCS) and the
acquisition of UAV guidance systems specialist Geneva Aerospace,
BAE Systems is positioning itself to win a larger
slice of the Indian defense market and, in particular, the production
of armored vehicles. The company is seeking to establish joint
ventures with local companies. The Indian Ministry of Defence
is seeking to procure about 8,000 lightweight (3.5 to 5 tones)
armored vehicles, a requirement addressed by the company's RG-32
DRS Subsidiary Grabs US$139
Contract for Night Vision equipment
NVS (Night Vision Devices), a DRS Technologies
company was awarded US$139 million, maximum value fixed price
contract to supply night vision equipment for US forces over
five years. The company was one of five competing bidders for
the program. DRS Technologies acquired NVS (then NVEC) in December
2004. The company is based in Allentown, Pennsylvania with Engineering
and Manufacturing located in Prescott Valley, Arizona.
Worldwide defense and aerospace companies completed
mergers and acquisitions (M&A) deals worth more than $40
billion in 2006, reports "Defense Mergers & Acquisitions"
in its year-end review. The year saw a total of 370 transactions
completed. M&A activity in 2006 was exceptionally broad
based. The top five deals accounted for only 32% of the total
value for the year. For comparison, in the record year of 1999
the top five deals accounted for 77% of the year's $65 billion
Simulation & flight training specialist CAE
(NYSE: CGT; TSX: CAE) is
investing US$16 million (C$18 million) in cash to acquire
MultiGen Paradigm Inc. a developer of real-time, commercial-off-the-shelf
(COTS) visualizing simulation software application. The acquisition
is part of CAE's thrust to establish itself as a leading provider
of COTS based modeling and simulation development tools.
April 11, 2007: SAIC, Inc. (NYSE:SAI)
reported this week a 10% growth in revenue for FY 2007 (ending
January 2007) and 19% increase in operating income,
compared to last year. Revenues for the year were $8.3 billion,
up 7% from $7.8 billion in fiscal year 2006. The company's backlog
of signed business orders at the end of fiscal year 2007 was
over $15.1 billion. For FY 2008 the company projects
a slight increase to $8.70 - $9.00 billions in revenue,
with cash flow from operations maintained at $450 millions.
Its Big Time for armor Producers
Armor specialist Armor
Holdings reported last week a major increase in volume and
profit, which was partly offset by a generous bonus for its
top executives. The acquisition of military truck maker Stewart
& Stevenson , last year, contributed for much of the growth
this year, but the company expect to benefit from the merging
of its armor and truck business, with the implementation of
the U.S. Army's Long
Term Armor Strategy. Another company to benefit from the
surge in demand for armored vehicles is Textron
Group, which published its Q1 results last week. Among the
contributors for its growth were the Armored Security Vehicle
Determined to lead the heavy
wheeled armored vehicle market, Force Protection, Inc.
is expanding its production capacity to reap the maximum share
of the MRAP program. Force
Protection is expected to reach vehicle production levels of
more than 400 vehicles per month by the end of 2007, compared
to 50 vehicles per month at the end of 2006.
Chassis, Inc., a subsidiary of Spartan Motors, Inc.
(NASDAQ:SPAR), is gearing up to meet the surge in demand for
Mine Resistant Ambush Protected
(MRAP) vehicles, while maintaining its commercial vehicles
production. The company announced the expansion of its chassis
production capacity, with the purchasing of two manufacturing
facilities near its headquarters in Charlotte, Mich. (More...)
The surge in demand for armored
vehicles is driving an expansion and shifting of activities
from Europe to the US market, where the defense department is
spending endless amounts on new armored systems and the upgrading
of existing vehicles.
A newcomer to the US market is the Danish company
Compushield, which recently established a foothold
in the US Market by the formation of joint venture with steel
and titanium producer American Tank & Fabricating
Company. the joint venture is called AMTANK
Armor, LLC, headed by John Mayles,
formerly with Armor Holdings Inc.
The growing demand is also attracting competitors
to the market, eroding margins and profits. Canadian based Ceramic
Protection Corporation (TSX: CEP), a provider of ceramic
armor components is expanding its activity in the US, with
plans for of another composite specialist company based in Ohio.
Last week CPC published its annual report for 2006, reporting
$76.9 million in revenues for 2006, a 40% increase over 2005.
Despite the growth in revenue, net income dropped by 10% from
$9.9 million in 2005 to $9 million in 2006. In the last quarter
of 2006 the company reported a net loss of $1.4 million, due
lower gross margins, reflected primarily in the soft armor product
line. On April 5th, the company announced a planned acquisition
of Composix Co. of Newark, Ohio. Composix and
its sister companys Ohio Armor and Force
One are providing prototyping and production of metalic
and composite based armor components and fuel tanks, Aramid-Shield
armor materials for bullet-resistant vests, protective plates
and lightweight military vehicle components.
Prosperity in the armored vehicles market is experienced
in Europe as well. The German Krauss Maffei Wegmann (KMW)
company increased its sales by almost 70% in 2006, reaching
turnover of about 1 billion euros. The company closed 2006 with
an order backlog of more than 3.4 billion euros. The continued
growth opened new jobs for 200 employees. At present more than
20% of KMW workforce are active in research and development.
The German based company developed a strong network of across
Europe, with subsidiaries in the Netherlands and Greece, as
well as in the USA. The company established partnerships related
to specific defense programs in Switzerland, Spain, Italy and
Another significant deal in
Europe is the official formation of a mega merger in the European
naval industry, as DCN and Thales
(Paris: HO.PA) have finalized with the French Government a merger
agreement which leads the way to major consolidation in the
European naval defense industry. Under the agreement, Thales
transferred its naval operations in France to DCN and has acquired
a 25% stake in DCN while the French government will retain a
75 % stake in DCN. This transaction will position Thales as
"the industrial shareholding partner" of DCN and the
terms of governance will allow Thales to play an active role
on the Board of Directors to support the development of DCN.
There will also be the possibility for Thales to increase its
stake in DCN to 35% over the next two years.
Thales is also expanding its
naval systems business to the US. The company established a
US based JV with DRS (NYSE: DRS), to penetrate
the US Sonar Market. The companies announced the formation of
DRS Sonar Systems LLC, a DRS majority-owned
joint venture company with Thales North America, Inc.
The company will focus on undersea warfare systems (UWS) for
defense and homeland security applications. According to Guy
Baruchel, president of Thales Underwater Systems, the
joint venture will leverage his company's global expertise in
sonar systems offering these solutions in the U.S. market.
The Norwegian group Nammo
AS announced last week the completion of the acquisition
of US based Talley Defense Systems Inc., from
Mesa, Arizona, effective March 30, 2007, following the recent
receipt of the final U.S. Government approval for the transaction.
According to Edgar Fossheim, CEO of Nammo AS
"Talley now presents us with a key platform for expanding
the sales of our products and technology to the U.S. market,
which already accounts for 25% of our total sales."
In the US, Airborne
Systems, a leading producer of parachute
systems Announces the realignment initiative to streamlining
its operation centers reducing from the current five units into
two divisions; Airborne Systems North America
and Airborne Systems Europe. Elek Puskas,
CEO of Airborne Systems expect the realignment of to have a
positive impact on the company's performance and service and
improve its global competitiveness in the evolving marketplace.
The realignment will not have any affect on the number of manufacturing
facilities and was implemented to eliminate duplication of activities
currently performed at each of the operating sites.