Home / M&A Activity / KippsDeSanto’s Warren Romine: Defense Spending, Market Factors Could Drive M&As

KippsDeSanto’s Warren Romine: Defense Spending, Market Factors Could Drive M&As

Jeff Brody

Warren Romine, managing director at KippsDeSanto & Co., has said more middle-market defense contractors are considering divestitures as they assess their capacity to keep up with market trends, the Washington Business Journal reported Monday.

Romine told the publication in an interview he expects increased U.S. defense budget and low interest rates to also drive acquisition and divestiture efforts.

He noted that industry players looking to enter into M&A deals will need to assess their business portfolio for units that do not get enough focus.

“It still comes down to core versus noncore operations,” he noted. “Where do I think I will make more money and the businesses will grow over time?"

His remarks came after BAE Systems announced its agreement to purchase the military GPS segment of United Technologies Corp.'s (NYSE: UTX) Collins Aerospace business as well as Raytheon’s (NYSE: RTN) airborne tactical radio segment for a total of $2.2B.

L3Harris Technologies (NYSE: LHX) had to divest Harris' night vision business to receive U.S. antitrust approval for the merger in July of last year.

Check Also

Report: Lockheed Advances in Army’s Precision Strike Missile Competition

Lockheed Martin (NYSE: LMT) emerged as the final contender for the U.S. Army’s Precision Strike Missile prototyping competition, Jane’s 360 reported Tuesday. The PrSM program seeks to develop a precision-strike, surface-to-surface guided missile to replace the Army Tactical Missile System and that can be fired from the M142 High Mobility Artillery Rocket System and M270A1 Multiple Launch Rocket System to neutralize targets at ranges of up to 499 kilometers.

CACI Wins Potential $200M Navy Satcom, C5ISR Support IDIQ

CACI International (NYSE: CACI) has won a potential $199.5M contract to provide satellite communications systems and services to U.S. Navy's joint warfighting special operations around the world.