What We’re Reading
What We’re Reading
In this May edition of our Aerospace, Defense & Government Services industry update, we review recent articles and developments impacting our target end markets. We also provide perspective on recent trends within the public markets as well as the M&A markets.
MAX Issues Are Disrupting Boeing’s NMA Plans
“Boeing’s push to get the 737 MAX back in service and restore confidence in its cornerstone commercial program appears to be threatening its next major endeavor—the new clean-sheet design tapped to fill a gap between the 737 and 787. Efforts to restore the MAX are in full swing, but the undertaking is draining resources from the new midmarket airplane (NMA), pushing a possible launch further into the future.”
Opinion: It Is Time to Get Real on Urban Air Mobility
“As mobility options continue to expand around the world, we are beginning to see the rise of autonomous mobility in cities like Singapore, Phoenix and Las Vegas. With this will come increased mobility access and travel convenience for urban populations. Our models project a more than 1-trillion-mi. increase in vehicle miles in the U.S. alone over the next 20 years. All of this is occurring in a world where congestion permeates many of our largest cities.”
Can the Pentagon Sell Silicon Valley on AI as Ethical War?
“Silicon Valley is wrestling with a Pentagon-shaped ethical question, and April 25 the arena for this particular fight was a wood-paneled ballroom at Stanford University, which hosted a listening session of the Defense Innovation Board. The Board exists to advise the secretary of defense on modern technology, and for nearly two hours it heard members of the public express their fears and hopes about applying robot brains to modern warfare.”
Defense Budget Sets Stage for Innovation, More Competition
“The Defense Department’s fiscal year 2020 request still has to work its way though the legislative process but that ask for an almost 5-percent funding boost does signal that modernization and innovation are priorities for both physical and digital technologies. That means contractors below the tier-one defense companies including government IT integrators will have the opportunity to better compete for at least a piece of programs that touch both hard and “softer” technologies like cybersecurity and artificial intelligence.”
Perspective on Public Marketsa,b,1
Most Significant Stock Price Movement – March 31st to April 30th
Stock price surged after announcement of $1.4B Army contract award to provide logistics services to regional commands in the Middle East and Asia
Announced definitive agreement to be acquired by Jacobs Engineering for $815 million
Price increased after announcing exploration of strategic alternatives for Aerospace Structures business
Recent M&A Transactions2
Indicates disclosed enterprise values in millions USD, unless denoted with “B” (billion)
a. Current stock prices in USD as of 4/30/19
b. Aircraft OEMs: BA, BBD.B, EADS, ERJ
Aerospace Supply Chain & Aftermarket Support: AIR, ARNC, ATRO, B, BBA, DCO, HEI, HRX, HXL, KAMN, MAL, MGGT, MOG.A, ROLL,
SAF, SNR, SPR, TDG, TGI, WAIR, WWD
Diversified Industrial: AME, CR, CW, ETN, GE, HON, PH, RR, TXT, UTX
Defense Prime Contractors: BA, BAE, EADS, GD, HO, HII, LMT, NOC, RTN
Defense Technologies: AVAV, CHG, CMTL, COB, CUB, ESLT, FLIR, HRS, KTOS, LLL, MRCY, TDY, ULE
Government Services: BAH, CACI, KEYW, LDOS, MANT, SAIC, VEC
Diversified Services: ACM, BAB, FLR, GIB, ICFI, JEC, KBR, SRP
1. FactSet
2. Mergermarket
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