The defense industry has a lot of movement these past few years. Defense contractors don’t focus on selling widgets or services to the general public but rather on winning contracts with the federal government. This makes growth strategies challenging – especially when financial stakeholders are involved. But a key method to grow capabilities before winning key contracts is to acquire other organizations or pieces of them. And for some contractors, a way to get an infusion of cash is to sell off sectors or business functions that no longer align with the core mission of the company. Diversity is good until it stretches too much and no one knows what specific service you offer.
5 Key Acquisitions in National Security in 2022
The last year or so has opened up a lot of movement and growth in national security. The only thing constant in life is change. And the industry is slowly changing.
1. Aerojet and ?
While Lockheed martin is no longer a contender for Aerojet Rocketdyne, Reuters reported that General Electric, L3Harris Technologies, and Textron have expressed interest in the acquisition. Veritas Capital, a private equity firm, may also have their name in the hat. If Reuters unnamed sources prove correct, Aerojet could have a deal signed by the end of December.
2. QinetiQ and Avantus Federal
In November, QinetiQ completed their purchase of Avantus Federal for $590 million. With QinetiQ based in the U.K. as home, their U.S. subsidiary performs on classified contracts through a Special Security Agreement with the Defense Counterintelligence and Security Agency.
Steve Wadey, Group Chief Executive Officer for QinetiQ Group plc shared, “This acquisition extends our customer base, strengthens our capabilities and builds scale in the largest defence and security market in the world. With a strong track record of 10%+ growth at attractive margins, Avantus is a brilliant strategic and cultural fit and positions us to meet the increasing mission-critical needs of our US defence and intelligence customers with agility and pace.”
3. LMI and Synaptech
To close out the last month in 2022, LMI President and CEO says, “LMI is thrilled to be entering the fast-paced, growing space market by acquiring Synaptech, which protects our nation’s national security assets and provides senior leaders with physics-backed decisional options.”
Colorado-based Synaptech moves LMI into the space industry. LMI’s expertise in logistics, deep analytics, and technology will complement Synaptech’s modeling and simulation strengths, better positioning both companies to innovate and support the missions of their respective Department of Defense (DoD) customers.
4. Booz Allen and EverWatch
Despite pushback this year, Booz Allen successfully completed their EverWatch purchase.
“EverWatch’s talented workforce, national security expertise, and core technical capabilities are an exceptional strategic fit with Booz Allen’s deep mission insights and robust portfolio of full-spectrum cyber operations, mission analytics, AI, and 5G offerings. The combination will deliver tremendous value to our clients as we work together to navigate a dynamic threat landscape and transform U.S. national cyber capabilities,” said Tom Pfeifer, National Security Sector President at Booz Allen.
5. L3Harris and Viasat
Viasat has continued to grow their presence in the defense industry. This past fall, L3Harris said they signed a definitive agreement to acquire Viasat, Inc.’s Tactical Data Links (TDL) product line – also known as Link 16 – for approximately $1.96 billion.
Acquiring Viasat’s TDL product line, which includes its Link 16 space assets, allows L3Harris to expand resilient communication and networking capabilities to a larger user base, achieving broader end-to-end, sensor-to-shooter connectivity – from operators to platforms or weapons data links and beyond – across multiple domains.
Acquiring Viasat’s TDL product line, which includes its Link 16 space assets, allows L3Harris to expand resilient communication and networking capabilities to a larger user base, achieving broader end-to-end, sensor-to-shooter connectivity – from operators to platforms or weapons data links and beyond – across multiple domains.
