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Weekly Roundup October 3 – October 7, 2016: L-3 Makes Buys, M&A Chatter Around Harris & more

October 3 – October 7, 2016

A Note From Our President & Founder Jim Garrettson


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.


Accenture Purchases Defense Point Security in Federal Cyber Expansion Push
This buy of Alexandria, Virginia-based DPS represents Accenture’s third major cyber-related acquisition over the past 14 months.
NSF Awards Dell Federal Services Unit $88M IT Services BPA
George Newstrom, Dell’s federal services president, said the organization aims to help NSF carry out its education and research functions.
General Atomics Added to Navy MQ-25 Carrier Drone Risk Reduction Program
San Diego-based General Atomics joins Boeing and Lockheed Martin as competitors to build a carrier-launched unmanned vehicle.
DHS Taps RAND Corp. for $495M FFRDC Mgmt Contract
Nonprofit organization RAND will carry out studies for DHS in areas such as R&D, innovation, threats, acquisition and regulatory doctrine.
QTS Buys VMware Govt Cloud Platform in Push to Expand Hybrid Cloud Portfolio
Dan Bennewitz of QTS told ExecutiveBiz the company also sought to build up its intellectual property portfolio through the deal.
Christopher Zember Named Alion Science Chief Technology Officer
Zember joins McLean, Virginia-based Alion Science from the National Defense University and has previously led DoD-run information analysis centers.
Vencore, Havas Health Form Medical Data Analytics JV
Steve Costalas, a senior VP at government services contractor Vencore, will serve as CEO of the HVH Patient Precision Analytics venture.
Former DoD Acquisition Leader Kenneth Krieg Joins American Systems’ Advisory Board
CEO Peter Smith said American Systems sought Krieg for his experience as the company continues its civilian and defense expansion efforts.
Raytheon’s Dave Wajsgras: ‘Collective Effort’ Needed to Address Cyber Workforce, Other Challenges
Wajsgras, head of Raytheon’s intell segment, also calls for increased awareness among young people to help fill cyber jobs.
ULA Gets $861M Contract Modification to Continue Support for Air Force EELV Missions
Boeing and Lockheed Martin’s ULA venture signed a cooperative R&D agreement with the Air Force last week on the future “Vulcan” rocket.

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