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Defense Markets Summary
January 2008 (past reports)
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Chemring Group PLC, a leading producer of expendable decoy
countermeasures announces is set to buy the U.S. based Titan
Dynamics Systems, Inc. from the Allied Defense Group (ADG).
Chemring agreed to pay $4.75 million in cash for all Titan's
stocks. As a privately held company, Titan was acquired by the
Allied Research Corporation in 2002 but now, ADG is oriented
toward weapons and ammunition activities and decided to divest
its non-strategic assets.
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Some of the leading corporations in the aerospace and defense
market published their fourth quarter and annual reports for
2007, indicating continued growth and prosperity for this market
segment, which is considered to be 'inflation proof'. Lockheed
Martin reported net earning of $3 billion for 2007, Northrop
Grumman earned $1.8 billion, and General Dynamics reported over
$2 billion profit. In contrast to the higher yields, declined
profits were reported by two of United technologies' aerospace
and defense operations - engine maker P&W and Sikorsky.
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BAE Systems plans to close the manufacturing facilities at
Guildford and Fareham and discontinue production of the Pinzgauer
1, with the potential loss of up to 102 jobs. Development of
the Pinzgauer 2 vehicle will be transitioned to the BAE Systems
South Africa business.
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New
Enterprise for Armored vehicles to be Established in Omsk
The Russian ministry of defense, acting under presidential
decision, is establishing an armored-vehicle manufacturing holding
company to be operating from Omsk. First Deputy Prime Minister
Sergei Ivanov said the new holding will include 16 Omsk-based
enterprises and design bureaus. The long term goal is to establish
a single Russian armored vehicle manufacturing enterprise under
the Uralvagonzavod
Research and Production Corporation. The enterprises to
be included in the new company include the transport engineering
design bureau (TEDB), a special-purpose hardware development
and production center. The Omsk transport engineering plant
(OTEP) which will soon resume armored vehicle repair and modernization
of tanks, as well as civilian wheeled tractors and cars. The
new corporation already produced T-90 tanks for the Russian
defense forces and export, and is expected to begin production
of "Terminator"
tank support vehicles (BMPT). Uralvagonzavod is expected
to assume responsibility for the production of Russia's future
tank, the T-95.
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Harris was awarded multiple orders for the supply of Falcon
family of radios to the U.S. forces, with a total value
worth US$158 million. These orders include $118 for Falcon II
High Frequency vehicular radios, $26 million for the supply
of AN/PRC-152Falcon III systems to the U.S. Air Force and additional
$14 million order from the U.S. Marine Corps for Falcon III
AN/VRC 110 vehicular radio systems to be installed in new Mine
Resistant Ambush Protected (MRAP) and other tactical vehicles.
These vehicles will also incorporate JTRS-approved AN/PRC-152
handheld radios. This is the third order under the $212 million
Tactical Handheld Radio (THHR) IDIQ contract awarded to Harris
last summer. Dana Mehnert, president of Harris RF Communications
confirmed that the company further increased its production
capacity to address the higher expected demand in the second
half of fiscal 2008 and beyond."
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UK
based Cobham plc Acquires US Based Sparta, Inc. for $416 million
UK based defense electronics company Cobham Plc will acquire
SPARTA Inc, a US based IT service provider for to the defense,
intelligence, and homeland security sectors of the federal government.
Cobham will pay $77.60 in cash for each share of SPARTA common
stock, representing net aggregate purchase price of $416 million.
The acquisition is expected to close in the second quarter of
2008. Cobham plans to finance the transaction from its currently
available cash and debt facilities. After completion of the
transaction, SPARTA will become Cobham's engineering and scientific
services platform. According to Allan Cook, Cobham Chief Executive,
"SPARTA, as one of the leading companies in areas of critical
importance in the provision of U.S. National Security, will
provide Cobham with an exciting platform for growth in the Systems
Engineering and Technical Assistance segment, which is complementary
to our existing U.S. intelligence and defense capabilities.
This is a major step forward in the implementation of Cobham's
technology strategy and the creation of a significant Tier 2
business supplying the U.S. DoD and intelligence markets."
said Cook.
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Northrop Grumman Corporation announced a strategic realignment
of several of its operating sectors in an effort to improve
customer support and utilization of resources. Under this realignment
the company created a single shipbuilding sector called Northrop
Grumman Shipbuilding which will merge its Newport News and Ship
Systems operations creating a single management for the company's
annual turnover of approximately $5.5 billion in revenues from
military shipbuilding and support.
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The Mississippi State University (MSU) will develop a portable
power system to support long endurance military applications.
The development is funded by a $1.6 million program awarded
by a U.S. Defense Department. MSU established a 'technology
partnership' with Ultralife (NASDAQ: ULBI) for the development,
awarding the company $475,000 contract to participate in this
program as a subcontractor.
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Selected by the US Army to Supply up to 2,500 Engineer
support vehicles at potential value of $2.28 billion
BAE Systems has been selected by the U.S. Army to be the sole
producer of the new Medium
Mine Protected Vehicle (MMPV), and has been awarded an initial
$20 million delivery order under the $2.288 billion MMPV program.
The MMPV contract envisions production of up to 2,500 vehicles
for use by U.S. Army Engineers and Explosive Ordnance Disposal
teams through 2015.
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Northrop Grumman Corporation (NYSE:NOC - News) announced today
that it will lead a team to compete for the U.S. Army's Aerial
Common Sensor (ACS), an airborne platform that will provide
the warfighter with actionable intelligence, reconnaissance,
surveillance and target acquisition capability. Northrop will
serve as prime contractor and overall systems integrator for
ACS. Other team members include AAI Corporation, an operating
unit of Textron Systems Corporation; General Dynamics C-4 Systems,
Scottsdale, Ariz.; and L-3 Communications Corp., New York.
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General Atomics Aeronautical Systems, Inc. (GA-ASI) is teaming
with SENER Ingeniería y Sistemas, S.A., a leading Spanish
engineering, consulting and systems integration company, to
promote GA-ASI's Predator Unmanned Aerial Systems meeting Spain’s
airborne surveillance and reconnaissance requirements.
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Alliant Techsystems (NYSE: ATK) and Allied Defense
Group, Inc. (AMEX:ADG are teaming to modernize tank ammunition
introducing Insensitive Munition (IM) based propellants and
explosives. The team will initially focus on propellant replacement
for aging tank rounds, produced in the 1980s, as they reach
their 20 year shelf life limit. The introduction of IM has been
mandatory in Europe, and will improve safety of ammunition in
storage and during transportation, improve the mobility of supplies,
both on land and at sea, and improve safety and survivability
of armored vehicles carrying the ammunition.
Northrop Grumman Corporation (NYSE: NOC) and Oshkosh Truck
Corporation (NYSE: OSK) have teamed to compete for the U.S.
military’s next-generation family of lightweight vehicles.
According to the teaming agreement, if selected, the prime contractor
for the program will be Northrop Grumman's Mission. Oshkosh
Truck’s Defense Group will be responsible for designing,
engineering and manufacturing the vehicle. Other bidders planning
to compete on Joint Light Tactical Vehicle (JLTV) include the
Boeing-Textron Systems team, Lockheed Martin and BAE Systems
Mobility & Protection Systems, General Dynamics and AM General
(the GTV team) and BAE Systems and International Military and
Government.
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