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14 août 2020 | International, Terrestre

AM General CEO on acquisition by a private equity firm

WASHINGTON ― KPS Capital Partners is acquiring Humvee-maker AM General, the private equity firm announced last month, marking a new chapter for the South Bend, Indiana-based vehicle maker.

AM General President and CEO Andy Hove will continue to lead the company, and KPS Partner Jay Bernstein said the firm would continue to build on the ubiquitous Humvee, leveraging the company's “research, technology, innovation and new product development, as well as its heritage and iconic brand name.”

The Humvee appears to have some growth ahead. For one, U.S. Army budget documents call for $1.5 billion through 2025 to pay for modernization of its fleet of High Mobility Multipurpose Wheeled Vehicles and their up-armored variant. That can include replacing major components, applying new technologies or replacing vehicles entirely. After the Army reaches its procurement objective for the Joint Light Tactical Vehicle, made by Oshkosh, it will have an enduring requirement for 54,800 Humvees.

Otherwise, AM General ― which has advertised both its Brutus 155mm and Hawkeye 105mm mobile howitzers ― is expected to participate in the Army's mobile howitzer shoot-off evaluation at Yuma Proving Ground, Arizona, next year.

Meanwhile, the Army is expected to complete a new tactical wheeled vehicle strategy in fiscal 2021, which has thus far received congressional support, per the House and Senate versions of the annual defense policy bill.

Hove, who has said KPS will continue to execute AM General's existing strategy, spoke with Defense News on Aug. 6. This interview has been edited for brevity and clarity.

Private equity firm KPS Capital Partners is in the process of acquiring AM General. At this preliminary stage, what would you say are KPS' plans and vision for the company?

I think [KPS partner] Jay Bernstein represented it in his quote in the announcement that they feel really good about the capabilities of AM General and the strategy we've been executing. We've discussed with them where we can go. They're confident in our business and the growth prospects of AM General. They feel good about and stand behind our strategy, and we're going to work together with them.

Will the company focus more on the Humvee, or do you see it becoming more flexible? What is the future for the Humvee? Who are its customers these days?

To say we're only focused on the Humvee today would not be a correct premise. We've made investments across the board, in base automotive systems, and then automotive systems that have a particular special use. Our core focus is in solving very complex mobility challenges for customers. So the Humvee has a great future. I would offer that you turn to not what I say about what the Army will do but what the Army says they're going to do on the Humvee fleet, which is to steadily and systematically manage a very large fleet by systematic replacement of that fleet and recapitalization of that fleet going forward.

They've been buying new-built Humvees to replace old Humvees over the last four years at a pretty heavy clip and have announced their intention to continue to do that going forward.

We're obviously going to focus on the Humvee because there's significant demand. It is today the world's leading military 4x4 in its class, and we build more of them than any other military vehicle manufacturer in the world, and especially more than anybody in our weight class.

That won't be the only thing we invest in. You can see our investments in the Hawkeye, which brings game-changing breakthrough technology [in relation to] how artillery systems are moved around and employed on the battlefield, together with a whole other range of implementing technologies such as autonomous navigation, off-board power and those kind of things. The U.S. Defense Department is an important customer, but a considerable portion of our businesses is global business, so we take a global view of how we solve mobility challenges for our customers around the globe.

The Army recently issued a request for information about replacing heavy trucks. Is that a potential opportunity?

We certainly feel like we have something to offer, a range of things to offer there, and that RFI's only been out for a couple of weeks. We'll will certainly take a closer look at that. We're also taking a look at the JLTV competition they announced back in February.

Defense News recently characterized AM General as “largely stagnant” since losing the competition for the JLTV in 2015 to Oshkosh. Do you want to push back at all to talk about AM General's time under McAndrew & Forbes?

The JLTV decision was 2015, and the four years since the announcement on the JLTV competition we've built more military vehicles than Oshkosh or any other military vehicle manufacturer by a long shot, and sold them to more customers around the globe than anyone else. I think that's far from being stagnant. There are a lot of adjectives you can apply to the company. “Stagnant” would not be the one I would apply.

Private equity firms will typically set up companies they buy for faster growth, and then potentially that'll lead to a future sale. Do you think that's something that might happen here, and what do you predict? Is there any indication of time horizons for KPS?

KPS has made a lot of smart investments, they have a pattern, but they're not going to be pigeonholed into a particular time frame for a next-step strategy.

https://www.defensenews.com/interviews/2020/08/13/am-general-ceo-on-acquisition-by-a-private-equity-firm/

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  • Contract Awards by US Department of Defense - October 02, 2019

    3 octobre 2019 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

    Contract Awards by US Department of Defense - October 02, 2019

    AIR FORCE Lockheed Martin Co., doing business as Lockheed Martin Space, Sunnyvale, California, has been awarded a $163,950,489 fixed-price, incentive-firm target modification (P00148) to previously awarded contract FA8810-13-C-0002 for space based infrared system contractor logistics support. This action is a bilateral supplemental agreement executed in accordance with justification and approval 18-14. Work will be performed at outside the continental U.S. locations; Peterson Air Force Base, Colorado; Buckley Air Force Base, Colorado; Greeley Air National Guard Station, Colorado; and Boulder, Colorado, and is expected to be completed by Sept. 30, 2020. Fiscal 2020 operations and maintenance funds are used and no funds are being obligated at the time of the award. The total cumulative face value of the modification is $163,950,489. The Air Force Space and Missile Systems Center, Peterson Air Force Base, Colorado, is the contracting activity. ASES LLC, doing business as Field Aerospace, Oklahoma City, Oklahoma, has been awarded a $21,346,897 firm-fixed-price contract modification (P00023) to previously award contract FA8106-18-C-0002 to exercise Option One for full rate production to begin for the T-1A Avionics Modification Program. This contract provides for the replacement of the avionics suite in the Air Education and Training Command fleet of 178 T-1A trainer aircraft, 16 operational flight trainers and 14 part task trainers. Work will be performed at Oklahoma City, Oklahoma; Randolph Air Force Base, Texas; Laughlin Air Force Base, Texas; Vance Air Force Base, Oklahoma; Columbus Air Force Base, Mississippi; and Pensacola Naval Air Station, Florida, and is expected to be completed by Aug. 14, 2025. Fiscal 2018 aircraft procurement funds in the amount of $9,993,753; and 2019 aircraft procurement funds in the amount of $11,353,143 are being obligated at the time of the award. The Air Force Life Cycle Management Center, Tinker Air force Base, Oklahoma, is the contracting activity. The Texas Workforce Commission, Austin, Texas, has been awarded a $17,085,515 contract modification (P00003) to previously awarded contract FA3016-18-D-0009 to exercise the first option period for Joint Base San Antonio/Ft. Sam Houston full food services. The contract modification exercised the first option period. Work will be performed at Joint Base San Antonio Ft. Sam Houston and Camp Bullis, and work is expected to be completed by Sept. 30, 2020. The total cumulative face value of the contract is $32,640,593. Fiscal 2020 operations and maintenance funds in the amount of $4,459,745 are being obligated at the time of the award. The 502d Contracting Squadron, Joint Base San Antonio-Randolph, Texas, is the contracting activity. CACI Inc. - Federal, Chantilly, Virginia, has been awarded a $12,693,283 cost-plus-fixed-fee task order to previously awarded contract FA8723-19-D-0001 for support vehicle programmed depot maintenance. This action is an in-scope bilateral supplemental agreement executed in accordance with the terms of Mobile Command and Control Systems contract. Work will performed at Albuquerque, New Mexico; and Greeley Air National Guard Station, Colorado, and is expected to be completed by Sept. 30, 2023. The total cumulative face value of the contract is $12,693,283. Fiscal 2020 operations and maintenance funds in the amount of $4,916,938 are being obligated at the time of award. The Air Force Space and Missile Systems Center, Peterson Air Force Base, Colorado, is the contracting activity (FA8823-19-F-0013). DEFENSE LOGISTICS AGENCY Eaton Aeroquip LLC, Jackson, Michigan, has been awarded a maximum $69,387,451 fixed-price contract for hoses, assemblies and other related parts. 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This procurement is for InterSystems Software maintenance renewal to support the existing InterSystems Software deployed across the Department of Defense. These products provide relational databases collating all patient health information into a query engine application for use by healthcare providers. The requirement was competed on NASA SEWP as a 100% service disabled veteran owned small business set aside for InterSystems renewal, and Four Points Technology LLC provided the lowest-price-technically-acceptable quote. The amount of $12,428,715 for the base year is obligated at the time of award. The Defense Health Agency Enterprise Medical Support – Contracting Division (EMS-CD), located in San Antonio, Texas, is the contracting activity. (Awarded Sept. 30, 2019) NAVY General Electric Co., Lynn, Massachusetts, is awarded a $10,592,822 modification (P00002) to a previously awarded firm-fixed-price contract (N00019-18-C-1061). This modification exercises an option to procure two F414-GE-400 production install engines, five engine devices, and 29 engine device K-seals in support of Lot 23 engine production for the F/A-18E/F aircraft. Work will be performed in Lynn, Massachusetts (48%); Evendale, Ohio (20%); Hooksett, New Hampshire (14%); Rutland, Vermont (9%); and Madisonville, Kentucky (9%), and is expected to be completed in August 2021. Fiscal 2018 aircraft procurement (Navy) funds in the amount of $10,592,822 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. ARMY The Boeing Co., Mesa, Arizona, was awarded a $7,892,950 modification (P00038) to contract W58RGZ-16-C-0023 for the Communication Interface System Obsolescence for the Apache AH-64E full rate production. Work will be performed in Mesa, Arizona, with an estimated completion date of Dec. 31, 2022. 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  • DSEI: Unleash the hornets: Combat vehicles and robots get new kit to increase standoff

    11 septembre 2019 | International, Terrestre

    DSEI: Unleash the hornets: Combat vehicles and robots get new kit to increase standoff

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