What We’re Reading

Content Summary

In this November 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.

Airline Industry Sees Promise in Pilot Career-Path Programs

“Airlines around the world face the opposing pulls of pilot retirements and escalating air traffic, creating the dilemma of a pilot shortage. In recent months the industry has taken steps to narrow the coming talent gap through “career pathway” and other initiatives, although substantial challenges remain.”

Aviation Week

Alphabet Groups Issue FBO Pricing Declaration

“Six general aviation organizations—NATA, AOPA, GAMA, HAI, EAA, and NBAA—today called for better pricing transparency in communications between FBOs and aircraft operators. Over the past two years, AOPA has been asserting that FBO pricing is often unfair.”

AIN Online

Modernizing the US Military by Learning from the Past

“‘Innovation’ and ‘force modernization’ are the Pentagon buzzwords of the day. Strategies are being developed across the Department of Defense enterprise, with these concepts as the foundational pillars. Is this a flawed idea involving competing philosophies? Can the U.S. be truly innovative if it wants to rapidly modernize its force?”

Defense News

Three Hot Topics for Federal Contractor M&A Transactions

“Active acquirers include both long-term strategic players buoyed by rising profits and stock prices and private equity funds with unprecedented levels of capital to invest. Although certain key legal and business issues are common to most M&A deals regardless of industry sector, unique issues arise in M&A transactions involving federal government contractors.”

The National Law Journal

Perspective on Public Marketsa,b,1

screen_shot_2018-12-11_at_3.44.01_pm.png

screen_shot_2018-12-11_at_3.44.42_pm.png

screen_shot_2018-12-11_at_3.45.21_pm.png

Recent M&A Transactions2

screen_shot_2018-12-11_at_3.47.35_pm.png

screen_shot_2018-12-11_at_3.48.06_pm.png

Notes
a. Current stock prices in USD as of 11/30/18
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

Sources
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.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd 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 & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.