April 28, 2024 | International, Aerospace
August 13, 2019 | International, Aerospace
Could Textron Become Purer A&D Company, Or Be Sold?
By Michael Bruno
As a multi-industrial manufacturer, Textron sells many transportation vehicles, from military helicopters to UAVs and even snowmobiles and recreational four-wheelers.
But a new corporate review may indicate the conglomerate could be looking to become an aerospace and defense (A&D)-focused company similar to other large rivals, according to analysts.
Earlier this month, Textron announced it is reviewing strategic alternatives such as a sale or spin-off of its German Kautex business unit, which produces fuel systems and other functional components. Kautex operates more than 30 plants in 14 countries and generated more than $2.3 billion in revenue in 2018.
“Kautex strategic review suggests Textron wants to become an A&D ‘pure-play,'” Cowen analysts Cai von Rumohr and his team said Aug. 9. “The thesis is that ‘new Textron' could command a higher [valuation] multiple closer to A&D pure-plays; and it would have optionality for merger and acquisition (M&A) or stock repurchasing to leverage its new product-driven growth.”
The Cowen analysts said they think that if Kautex is disposed of, so could golf cart maker Textron Specialized Vehicles or other units in Textron's Industrial division. In turn, the company could use proceeds and money saved to bolt on smaller A&D businesses, or it could continue active share repurchases to lever benefits of expected growth from new products such as Longitude, Sky Courier, Denali and V-280.
“A third possibility is that free of Industrial, Textron could be of interest to larger primes, who would bring more lobbying clout to V-280,” the analysts said. Buying candidates could be Boeing or General Dynamics, they added.
Separately, a well-known adviser to the A&D industry recently told Aerospace DAILY that Textron would make a good acquisition target for other A&D players. “Over the years I've had my clients take a hard look at that one,” the consultant said. This person listed Boeing and Lockheed for possible top-level consolidation, although getting Pentagon and Trump administration approval could be more of a challenge than for other recent M&A deals.
To be sure, Textron is already an aerospace-focused multi-industrial. According to Cowen, it is the leader in Class 1-5 business jets (which make up 24% of annual total revenue), with positions in helicopters via Bell (26%), defense systems (12%), and then industrial products (25%). Defense as an end-market accounts for 29%.
But conglomerates are increasingly breaking up and those with A&D elements continue to focus on those businesses. United Technologies is working to spin off its elevators and air conditioning businesses while adding Raytheon. General Electric is divesting major units but favoring aviation. Honeywell International in recent years has spun off units to focus more on A&D and related businesses. One reason for the portfolio shaping is because of pressure from major investors who want companies to be more focused, in part so they can balance their own investment portfolios rather than relying on a company to try to play in various industries.
Goldman Sachs is advising Textron on its review. Textron reiterated that no decision has been made and there are no assurances that the process will result in any transaction being announced or completed.
The company has not set a definitive timetable for completion of its review of strategic alternatives and does not intend to make any further announcements related to its review unless and until its board of directors has approved a specific transaction or Textron otherwise determines that further disclosure is appropriate.
https://aviationweek.com/business-aviation/could-textron-become-purer-ad-company-or-be-sold
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October 10, 2018 | International, Land
US Army triggers start of possible ground mobility vehicle competition after long delay
By: Jen Judson WASHINGTON — The Army seemed geared toward holding a rapid competition to buy a Ground Mobility Vehicle in 2016, but the plan was delayed without much explanation in favor of buying an interim vehicle already in use by special operations forces. Buying the GMV was a top priority following the fall 2015 release of the Army's Combat Vehicle Modernization Strategy, which called for such a vehicle in future and current operations. After a competition never materialized, however, rumors began to swirl that the Army may decide to buy more of the U.S. Special Operations Command's GMV — General Dynamics Ordnance and Tactical Systems' Flyer 72 — even after the service had spent several years prior testing a wide variety of commercial off-the-shelf options. But Congress spurred the effort in its fiscal 2018 defense policy bill, mandating the Army hold a competition and move forward with a program. The Program Executive Office Combat Support and Combat Service Support's product lead for the GMV has quietly stated on its website that the Army plans to pursue a competition for the GMV — calling it an Infantry Squad Vehicle — as a formal program of record. The office states that it is projected to enter into a production contract in fiscal 2020 to procure 2,000 vehicles, roughly a year later than originally planned. The Army took a big step forward on Sept. 24, releasing a market survey to industry, via the Federal Business Opportunities website, soliciting offerings for an Infantry Squad Vehicle. The notice states the service is looking for a vehicle that provides mobility for a nine-soldier infantry squad as well as its associated equipment to “move around the close battle area.” The vehicle should be lightweight, highly mobile and transportable “by all means” to include CH-47 Chinook cargo helicopters, UH-60 Black Hawk utility helicopters and by Low Velocity Air Drop. Responses to the solicitation are due on Oct. 26. While the Army has already bought quantities of the SOCOM vehicle for five airborne infantry brigade combat teams, other companies have continued to wait in the wings for the possibility to compete. And the pool of readily available ultralight vehicles is deep. In addition to GD's Flyer, these vehicles all participated in vehicle demonstrations at Fort Bragg, North Carolina, in 2014: Boeing-MSI Defense's Phantom Badger. Polaris Defense's air-transportable off-road combat vehicle DAGOR. Hendrick Dynamics' Commando Jeep. Vyper Adamas' Viper. Lockheed Martin's High Versatility Tactical Vehicle, which is a version of the British Army's HMT-400 Jackal. The Army launched its new-start GMV program in 2017 as planned, based off the service's new combat vehicle modernization strategy released in 2016, which called for the capability. The Army planned to reach a full-rate production decision on a vehicle by the end of FY19. But then it decided to split GMV procurement into two phases in the FY18 budget request and, in the first phase, planned to exclusively buy 295 of GD's Flyers through a previously awarded contract with U.S. Special Operations Command. The second phase would open up into a competition to build 1,700 more GMVs. Procuring the GMV vehicles from SOCOM raised the unit cost of the vehicle higher than the unit cost of ones that would have been procured through competition, according to FY18 budget documents. https://www.defensenews.com/digital-show-dailies/ausa/2018/10/09/us-army-triggers-start-of-possible-ground-mobility-vehicle-competition-after-long-delay
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January 31, 2024 | International, Land, Security
CACI Awarded an $81 Million Task Order to Support the Defense Intelligence Agency (DIA)
The Storefront and Dissemination Support task order will provide global IT operational, sustainment, and modernization for databases across the intelligence community and the DoD.