A&D Weekly News & Transactions - Week 38

Industry Headline News

Boeing's head of defense, Ted Colbert, is stepping down following years of losses and the Starliner spacecraft debacle
Sept. 20, 2024 - His departure marks the first executive change under new CEO Kelly Ortberg, as the company faces cash-flow issues, union strikes, and heavy charges from fixed-price defense contracts. Boeing’s cash generation and credit ratings are at risk, with potential share sales looming to raise funds. (Financial Times)

The U.S. Navy has awarded $1.21 billion in contracts to AAR Government Services and StandardAero for the maintenance, repair, and overhaul of P-8A Poseidon aircraft engines
Sept. 20, 2024 - The work will be carried out in various locations, including the U.S. and Canada, and is expected to be completed by 2029. These contracts also support aircraft used by the Royal Australian Air Force and foreign military customers. (GovCon Wire)

Italy is increasing its defense spending by 16.8% to $10.3B, including the purchase of 25 additional F-35 jets, bringing its fleet to 115 aircraft
Sept. 17, 2024 - It will also invest in Eurofighters, the Global Combat Air Programme, and a new fleet of M-346 trainer jets for its Air Force. The budget reflects a broader trend of rising defense procurement, with funding allocated for future maritime patrol aircraft and other military upgrades. (Defense News)

Boeing has initiated cost-cutting measures in response to a strike by 33,000 union workers over a rejected contract
Sept. 17, 2024 - Such measures including a hiring freeze, reduced supplier expenditure, and potential staff furloughs. Boeing's CFO warned the strike significantly jeopardizes the company’s recovery efforts after ongoing challenges. (Aero Time)

Norway’s Kongsberg Defence and Aerospace is opening a new missile production facility in Virginia to meet growing global demand amid conflicts in Ukraine and the Middle East
Sept. 17, 2024 - This facility will focus on producing and maintaining Naval Strike Missiles and Joint Strike Missiles, expanding the company's U.S. footprint alongside its existing production site in Pennsylvania. The investment, driven by potential U.S. Department of Defense contracts, will create over 180 jobs and strengthen defense capabilities. (Defense News)

Boeing will pay Embraer $150M after withdrawing from talks for a commercial aviation partnership that began in 2020, concluding a lengthy arbitration process
Sept. 16, 2024 - Although the payout was lower than some analysts expected, it helps Embraer reduce its debt amid rising demand for its aircraft. The deal follows disputes over the aborted $4.2 billion acquisition during the COVID-19 pandemic, with both companies citing differing reasons for the collapse. (Reuters)

Weekly Transaction Review

No.	Parties Involved	Transaction Metrics			Location	Segment
	Target [Parent] Acquirer [Parent]	Price ($M)	Price/ Revenue	Price/ EBITDA	Target	Target
1	Azure Summit Technology CACI International	$1,275.0	2.9x	11.6x	Fairfax, VA	Defense Electronics
2	C5Mi Insight DC Capital	-	-	-	Jacksonville, FL	Government Services, IT Services and Software
3	Naval Propulsorand Handling Business [Rolls-Royce] Fairbanks Morse Defense [Arcline]	-	-	-	Walpole, MA	Navy/Maritime
4	Enercon Technologies [Fortissimo Capital] Bel Fuse	$400.0	3.6x	11.1x	Netanya, Israel	Defense Electronics
5	Bevan Aviation Yingling Aircraft [AE Industrial]	-	-	-	Wichita, KS	MRO & Logistics
6	Saint Technologies First Aviation Services [First Equity]	-	-	-	Shannon, IL	Components & Subsystems

No.	Target Descriptions
1	Azure Summit Technology is a developer of high-performance RF hardware, firmware, software products, and multi-function RF systems solutions for mission-critical applications in private sector and U.S> federal government defense markets.
2	C5Mi is a developer of digital transformation and modernization solutions for solving complex supply chain and logistics challenges for private sector, state, and U.S. federal government defense markets.
3	The Naval Propulsors & Handling Businesses of Rolls-Royce manufacture and support a range of specialist propellers and waterjets for naval applications, as well as specialized handling systems that enable the deployment and recovery of manned and unmanned craft, and other cargo, from naval vessels.
4	Enercon is a supplier of highly engineered non-ITAR power conversion and networking solutions to global aerospace and defense markets. The company designs COTS, factory configurable, and tailor-made solutions to overcome the demanding requirements of today's MIL-Standards, austere environments and rugged military and defense applications.
5	Bevan is a provider of avionics repair and installation as well as aircraft inspection and maintenance solutions to private sector aerospace markets. Bevan provides bench repair and inspection services on many popular comms, navs, auto-pilots, GPSs, DMEs, transponders, and others.
6	Saint Technologies manufactures specialized lock washers used for securing critical hardware assemblies in high-vibration and shock environments under the brand name RealLock.