On Tuesday, the U.S. Air Force announced that SpaceX received certification for military space launch, making it only the second provider approved to launch military payloads into orbit. The Air Force’s certification of SpaceX’s Falcon 9 rocket effectively ends the service’s decade long sole reliance on United Launch Alliance (“ULA”) for military launch services.
The annual Special Operations Forces Industry Conference (“SOFIC”) kicked off this past week in Tampa, FL bringing together military, government, and industry stakeholders alike. This year, defense giants such as Boeing, General Dynamics, and Polaris showed off a range of new ultralight vehicle offerings in response to the U.S. Army’s pre-solicitation for new ultralight combat vehicles (“ULCV”) that can take advantage of tactical lift.
A strong driver of “middle market” M&A over the past five years has been (and we expect to continue to be) sellers’ presence within priority, well-funded customer and capability markets. Between 2001 and 2009, Federal spending on contractor services grew at an unprecedented rate, primarily driven by ongoing military action overseas, the growth of the U.S. intelligence apparatus, and the maturation of the Federal IT environment.
The U.S. Air Force released a Justification and Approval notice this past week on FedBizOpps, which indicates its plans to award Northrop Grumman $4 billion in contracts between 2016 and 2020 to sustain and develop the RQ-4 Global Hawk Unmanned Aerial Vehicle. This step solidifies support for the program and ends its tumultuous acquisition history.
Commercial applications of unmanned aerial vehicles (“UAVs” or “drones”) were among the highlights at this past week’s annual AUVSI conference in Atlanta, Georgia. Venture investors continue to plow money into commercial UAVs businesses (noted by Accel Ventures’ investment this week of $75 million into Chinese drone firm DJI, valuing DJI at ~$8 billion).
Northrop Grumman and General Dynamics, in their earnings calls earlier this week, reiterated that their stock buyback programs will remain preferred methods of cash deployment.
The House Armed Services Committee (“HASC”) began its markup of the National Defense Authorization Act this week to be completed by April 29th. The HASC is in the process of marking up the following four sections; tactical air and land forces, military personnel, seapower and projection forces, and strategic forces, in that order. There has already been word that the seapower and projection forces section has distinct verbiage demanding oversight of the Air Force’s Long Range Strike-Bomber (“LRS-B”) program.
Earlier this week, the 2015 MRO Americas conference took place in Miami, FL. The conference, which is the aerospace industry’s pre-eminent conference covering all topics related to maintenance, repair, and overhaul (“MRO”), featured Embraer’s Chief Operating Officer, Luis Carlos Affonso, as its opening keynote speaker.