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Steady tide of acquisitions mark new year
by Staff Writers
Raufoss, Norway (UPI) Jan 8, 2013

disclaimer: image is for illustration purposes only

Company acquisitions are continually changing the face of national aerospace and defense industries and 2013 is unlikely to be an exception.

Notable takeovers announced at 2012 yearend and the start of 2013 involve the Nordic ammunition-maker Nammo, Italian aviation company Avio S.p.A. and U.S. conglomerates General Dynamics and Lockheed Martin.

In Europe, the Nammo Group, which has headquarters in Norway, announced it is purchasing an ammunition plant of Santa Barbara Sistemas, S.A. The plant, which produces various ammunition types, is in Palencia and has operated as part of General Dynamics European Land Systems.

The financials of the deal, which is subject to approval from Spain's Ministry of Defense and other regulatory approvals, weren't disclosed but Nammo said that as part of the takeover it will retain the factory's existing workforce and production lines.

The facility will be named Nammo Palencia and will be managed as a self-contained entity within the Nammo Group.

"The transaction will help assure the future stability of the workforce at Palencia," said Carlos Villar, managing director of General Dynamics European Land Systems-Santa Barbara Systemas.

"The Nammo Group's purchase of the Palencia operations and facility will also help ensure that technological capabilities remain in the hands of one of the most important companies in the sector that adds new possibilities, thereby assuring support and backing for the needs of the Spanish Ministry of Defense and their allies."

Added Edgar Fossheim, president and chief executive officer of Nammo: "The Palencia operations have good synergy to parts of the Nammo Group and will also be an important supplier to several operations of the group.

"It is the overall intention of Nammo to maintain and develop significant manufacturing and business operations based in Spain, aimed at both the domestic market and export markets."

While Nammo cited boosting its business portfolio as being behind the ammunition plant purchase, GE cited expanding its presence in the jet propulsion business and strengthening its supply chain as reasons underlying its proposed purchase of Avio from Cinven, a European equity firm, and Finmeccanica for $4.3 billion.

Avio manufactures of aviation propulsion components and systems for civil and military aircraft, including low-pressure turbine systems, accessory gearboxes, geared systems and combustors.

"Avio will strengthen GE's global supply chain capabilities as its engine production rates continue to rise to meet growing customer demand," GE said. "Avio and its customers will benefit from GE's planned investment in expanding Avio's products and services."

The purchase, however, doesn't include Avio's space business.

Avio's 2011 revenues in the aviation sector were $2.4 billion. More than half that amount was derived from components for GE and GE joint venture engines.

"We look forward to Avio joining the GE family," said David Joyce, president and chief executive officer of GE Aviation, parent company of GE Europe. "We have worked closely with Avio for decades, and we anticipate a bright future together.

"This acquisition is a great strategic fit with our existing portfolio. Avio has technologies, capabilities and outstanding engineers to help grow our business."

In the United States, General Dynamics acquired Applied Physical Sciences Corp. near year's end. Applied Physical Sciences is a provider of applied research and development services and General Dynamics said the acquisition will complement the engineering programs its subsidiary Dynamics Electric Boat, which builds submarines for the U.S. Navy.

Applied Physical Sciences is also involved in research, development, engineering and prototyping of acoustics, signal processing, marine hydrodynamics and electromagnetic systems, produces directional underwater transducers, maritime and intelligence, surveillance and reconnaissance sensing and communication systems.

"This acquisition enhances Electric Boat's ability to respond to emerging submarine requirements using the engineering knowledge and rapid-prototyping capabilities of Applied Physical Sciences, and gives the talented professionals at Applied Physical Sciences additional insight into the needs of the U.S. submarine fleet," said General Dynamics Electric Boat President Kevin Poitras.

"The greatest beneficiary of this acquisition will be the U.S. Navy."

Lockheed Martin, meanwhile, acquired substantially all of the assets of Canada's CDL Systems Ltd., a software engineering firm that develops and licenses vehicle control station software for unmanned systems.

"This transaction provides us a common software solution with significant in-theater experience that furthers our ability to meet our customers' growing need for mission critical unmanned vehicle capabilities," said Lockheed Martin Chairman and Chief Executive Officer Bob Stevens. "CDL Systems will be an important addition to our Mission Systems and Training business."


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