What We’re Reading
In this October 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.
Opinion: The Digital Thread In MRO
“Digital threads will be more than short-term wonders—they will enable action. We instantly recognize the value of many technologies, be they light bulbs, telephones or elevators. Other technologies are less captivating at first. More than innovative technology was needed to move from horsepower to steam and from analog to digital imagery. The adoption of technologies often rests on answering a basic question: “So what?” As aviation aftermarket executives push their digital agendas, they are frequently asking this question of an emerging concept, the digital thread.”
Opinion: A&D Suppliers Smile In Face Of Adversity
“Supply chain problems hampering Boeing 737 and Airbus A320 production have been one of the biggest aerospace and defense stories all year, alongside growing trade tensions with ultra-important customer China and emerging challenges to U.S. defense spending. Then there are the more “mundane” issues of OEM supplier squeezes, workforce shortages, rising interest rates and Pentagon acquisition reforms. So why are A&D suppliers so happy?”
Jetcraft Releases Business Aircraft Sales and Acquisitions Forecast
“The annual market forecast reaffirms that steady growth in the private jet industry is set to continue, with predictions of 8,736 unit deliveries over the next 10 years, representing $271bn in revenues (based on 2018 pricing). North America will once again take the lead, accounting for 60% (5,241) of predicted new unit deliveries over the forecast period, with Europe expecting 18% (1,572), and Asia-Pacific 13% (1,136).”
The Soldier’s Heavy Load
“Body armor saves lives. Modern body armor has given U.S. troops an unparalleled advantage on the battlefield, improving survivability and reducing casualties. This protection comes at a price, however. U.S. ground troops today carry an average of 27 pounds of personal protective equipment (body armor and helmet). This weight comes on top of an already heavy burden consisting of a weapon, ammunition, water, batteries, and other gear. Surveys from recent wars have found dismounted ground combat troops carrying 90 to 140 pounds or more in combat. Heavy loads reduce mobility, increase fatigue, and reduce mission performance.”
Perspective on Public Marketsa,b,1
Recent M&A Transactions2
a. Current stock prices in USD as of 10/31/18
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
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