The stalwart GovCon technology maker L-3 Communications extended its profile as an active player in the merger-and-acquisition scene this week and closed its first buys since a large business divestiture earlier this year.
In addition, we also may have a parallel situation with another notable GovCon identity that could pursue a similar path to that of L-3 in a diversion away from government services to a more product- and platform-focused strategy.
L-3 has started to put a small portion of its $550 million warchest from the February sale of its services segment to work in pair of deals GovCon Wire covered this week that represent the New York City-based contractor’s new approach.
This week, the company closed its purchases of electronic warfare technology maker Micreo andpilot training services provider Aerosim for undisclosed sums to represent another chapter in L-3’s two-decade run with much of it shaped by M&A.
L-3 COO Chris Kubasik foreshadowed the possibility of deals in October when he told investors the contractor had “kicked up the intensity a notch” in its M&A strategy with nearly “a dozen or so properties” as possibilities in commercial and defense.
We now also have to keep an eye on fellow defense electronics maker Harris Corp. for possible M&A-related developments there on the sell side of the equation.
According to Reuters, Harris has started work to divest some assets in an attempt to fetch around $1.5 billion total and continue its own portfolio reshaping effort.
The Melbourne, Florida-based radio maker struck a deal with activist investor Barry Rosenstein’s hedge fund Jana Partners in August to add two new board members and those appointments were revealed one month later.
Harris has already made one divestiture this year through the sale of its former aerostructures business and has indicated to investors a willingness to part with non-core assets in the wake of itsFebruary 2015 combination with Exelis.
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