A&D Weekly - February 12, 2024

Industry Headline News

Northrop Grumman's RQ-180 stealth drone, designed for high-altitude missions, could add $100 billion in revenue to the existing $200 billion B-21 bomber contract
Feb. 11, 2024 - The drone complements the B-21 Raider, forming a stealthy team for the U.S. Air Force. With a fixed-price B-21 program to avoid cost overruns, Northrop Grumman's long-term prospects appear positive. (Yahoo! Finance)

Investment firm Ten Oaks Management filed a lawsuit accusing Boeing of deceiving it into buying failing supplier Astech
Feb. 11, 2024 - Boeing had previously claimed it was "held hostage" by Ten Oaks, alleging a three-fold price increase ultimatum. Ten Oaks counters, stating it was duped by Boeing, leading to a legal dispute over fraud accusations. (Business Insider)

Dynamatic Technologies has secured a major deal with Airbus to produce all door variants for A220 planes in India, marking Airbus's largest door contract.
Feb. 8, 2024 - Following the announcement, Dynamatic's Mumbai-listed shares surged to a record high of 7,780 rupees. This move is part of Airbus's strategy to boost part sourcing from India, aiming to double the total value to $1.5 billion. (Reuters)

The U.S. Army is discontinuing its FARA program after investing over $2 billion
Feb. 8, 2024 - The decision is part of a broader shift in aviation strategy. The Army cites changing technology, emphasizing unmanned aircraft for armed reconnaissance, was influenced by the battlefield in Ukraine, and plans to conclude FARA prototyping activities by the end of fiscal 2024. (Defense News)

Boeing confronts a labor dispute as its largest union is demanding a 40% pay raise over three to four years after dissatisfaction with a 2014 deal
Feb. 6, 2024 - The negotiations, starting March 8, add pressure on CEO Dave Calhoun, dealing with manufacturing problems and heightened FAA scrutiny. The labor unrest comes amid workforce scarcity and Boeing's need to stabilize its operations. (Fortune)

Boeing is delaying T-7A Red Hawk training jet deliveries to the Air Force due to quality issues with parts, pushing low-rate initial production to mid-2024
Feb. 5, 2024 - Supply chain challenges and part problems from various suppliers impact the schedule for the fourth and fifth engineering development jets. Boeing aims to have the production line ready by mid-2024, with plans to deliver the first production T-7 in 2025 or possibly 2026. (Defense News)

Lockheed Martin signed agreements for Saudi companies to produce THAAD missile system parts, boosting defense capabilities amid regional tensions
Feb. 5, 2024 - SAMI inked 11 deals at the World Defense Show, marking increased cooperation. This follows the restoration of ties between Saudi Arabia and Qatar, with Barzan Holdings signing a preliminary deal with SAMI. (Reuters)

Weekly Transaction Review

No.	Parties Involved	Transaction Metrics			Location	Segment
	Target [Parent] Acquirer [Parent]	Price ($M)	Price/ Revenue	Price/ EBITDA	Target	Target
1	J&J Maintenance [Arlington Capital Partners] CBRE Group, Inc.	$800.0	-	-	Austin, TX	MRO & Logistics
2	Shipyard Assets of Metal Shark Boats [Gravois Aluminum Boats] Birdon America [Birdon Pty]	-	-	-	Bayou La Batre, AL	Navy/Maritime
3	Haynes International, Inc. Acerinox, S.A.	$970.0	1.6x	12.3x	Kokomo, IN	Machined & Cast Parts
4	Dayton Operations of Stevens Aerospace [NTC Group] Premier Air, Inc.	-	-	-	Dayton, OH	MRO & Logistics
5	VMD Systems Celerity Government Solutions, LLC [McNally Capital]	-	-	-	Fairfax, VA	Cybersecurity, Intelligence Services and Homeland Defense
6	OnePath Systems [OnePath Holdings] Albers Aerospace	-	-	-	Marietta, GA	Government Services, IT Services and Software
7	Calgary Manufacturing operations of Field Aviation [Trive Capital] De Havilland Aircraft of Canada [Longview Aviation Corp]	-	-	-	Calgary, Canada	Machined & Cast Parts
8	Aviation NDT Services Heston MRO [Heston Services]	-	-	-	Melbourne, Australia	MRO & Logistics
9	Data Protection Business of Veritas [The Carlyle Group] Cohesity, Inc.	-	-	-	Santa Clara, CA	Government Services, IT Services and Software

No.	Target Descriptions
1	J & J is a provider of facilities support services to U.S. federal government civilian, defense, and homeland security markets. The company provides Healthcare Environmental Services (HES), Operation & Maintenance (O&M) services, Base Operations Support (BOS), engineering, and medical maintenance services.
2	The shipyard specializes in the design and construction of steel vessels for multiple markets. It is is a fully developed 32-acre shipyard fronting a dredged deepwater inlet which includes five steel buildings for fully self-contained fabrication and construction work, with over 1,700' of waterfront, a 660-ton Travelift, and multiple cranes.
3	Haynes develops, manufactures, markets, and distributes nickel and cobalt-based alloys in sheet, coil, and plate forms in the United States, Europe, China, and internationally. The company offers high-temperature resistant alloys used by manufacturers of equipment, including jet engines for the aerospace market, gas turbine engines for power generation, and industrial heating equipment.
4	The Dayton operations provide fixed-base operations, as well as maintenance, repair, and overhaul services business. The operations have 370,000 square feet of leasehold space that includes a full refurbishment design center for paint and interiors plus aircraft hangar storage.
5	VMD provides cybersecurity, digital infrastructure, agile engineering, and homeland defense based services to private sector and the U.S. federal government civilian and homeland security markets. The company's capabilities include DevSecOps, transformation, cloud modernization, and transportation security.
6	OnePath Systems is a provider of turnkey onsite installation and maintenance, technical integration, program and operational services to private sector and U.S. federal government defense and enterprise markets.
7	The Calgary manufacturing facility manufactures build-to-print parts and sub-assemblies for major OEM's such as Bombardier, Viking and Boeing. The facility is ISO 9001:2015 and AS9100D certified, and NADCAP accredited for chemical processing, heat treating, and NDT. The facility is a Transport Canada Design Approval Organization, and EASA accredited (EASA.145.7072).
8	Aviation Services is a provider of independent & flexible NDT services across Australia, Pacific Island and Asia region. The company provides its NDT solutions to a wide range of general and commercial aviation customers across the region.
9	The Data Protection business ensures cloud uptime SLAs while simplifying migration and disaster recovery and keeps data secure while minimizing attack impact on-prem and in the cloud with immutability. The business also provides actionable insights with alerts and reports correlated across an entire data infrastructure and removes human dependencies.