What We're Reading

Content Summary

In this August 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.

Electrification Will Take Different Forms Across Aviation Sectors

“Will aviation be electrified? The answer among industry executives is an overwhelming “yes,” but in different ways, on different time frames, in different markets. As the technologies for electric propulsion advance, it is becoming clear one size will not fit all—and that may be a good thing.”

Aviation Week

Fast Defense Acquisition Trend, OTAs, See Old Concerns Reemerge

“One of the hottest new trends in defense contracting is actually decades old. Congressional and industrial concern about Washington’s latest, favorite acquisition tool—other transaction agreements (OTA)—could be reemerging even as demand for speedier and more innovative aerospace and defense capabilities takes off.”

Aviation Week

The Race To Launch From U.S. Soil Heats Up

“On Friday morning, NASA will show off four of its veteran astronauts at an event at Johnson Space Center in Houston: two U.S. Air Force colonels, one U.S. Marine colonel, and one U.S. Navy captain. They all have advanced science and engineering degrees. They’ve been working for NASA since 2000 or earlier. They’ve flown to the International Space Station. And, NASA will declare proudly, they’re ready to go back to space.”

The Atlantic

Lawrence Prior Says We're In A Summer Lull, Then ‘The Game’s On’ For Government Contracting M&A

“There’s a summer lull,” said Lawrence Prior of M&A in government contracting. “It feels a little quiet but I think under the surface there’s a lot going on. You’re going to see another wave of consolidation.”

Washington Business Journal

 

Perspective On Public Marketsa,b,1

screen_shot_2018-09-11_at_12.05.46_pm.png

screen_shot_2018-09-11_at_12.06.16_pm.png

screen_shot_2018-09-11_at_12.06.45_pm.png

Recent M&A Transactions2

screen_shot_2018-09-11_at_12.09.06_pm.png

screen_shot_2018-09-11_at_12.09.42_pm.png

a. Current stock prices in USD as of 8/31/18

b. Aircraft OEMs: BA, BBD.B, EADS, ERJ

Aerospace Supply Chain & Aftermarket Support: AIR, ARNC, ATRO, B, BBA, DCO, ESL, 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, EGL, KEYW, LDOS, MANT, SAIC, VEC

Diversified Services: ACM, BAB, FLR, GIB, ICFI, JEC, KBR, SRP

1. FactSet

2. Mergermarket

 

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

 

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.