Earlier this month ExCeL London hosted arguably the world’s largest defence & security conference, DSEi.
Livingstone Partners has a long track record of working with many of the Defence & Security sector’s most innovative private companies as well as providing advice and transaction support to several world leading multi-nationals and the bi-annual DSEi show is always a busy week.
The last DSEi, back in 2011, was held against the backdrop of significant cuts in defence budgets across Europe and the looming uncertainty of the US sequestration process, with investment plans being reviewed and overheads managed in light of expected platform delays and cancellations.
However, last week’s show saw a meaningful improvement in confidence with many of the companies we met with highlighting their expansion plans and product portfolio additions. Amongst the most positive news were a clutch of orders announced by Philip Dunne, Defence Procurement Minister:
- A six year £367m deal with Rolls Royce to support the engines on British Army Apache attack helicopters and Royal Navy and Royal Airforce Merlin helicopters;
- A £250m order for Sea Ceptor missiles from MBDA to provide protection for the Royal Navy Type 23 and Type 26 frigates;
- £23m to acquire a further 24 Foxhound vehicles from Force Protection Europe;
- The creation of a specialist ceramic armour development centre in Newport, South Wales, jointly funded by the UK and Kennamental of the US, to allow the UK to bring more world-leading ceramic armour capability on-shore.
M&A within Defence & Security over the last two years has been principally focused around cyber-security and homeland and infrastructure protection and we expect these sectors to remain very strong, as exemplified by Lockheed Martin’s acquisition of UK IT services provider Amor Group last week. However, improving pipelines are now also driving a return to interest in acquisitions within the defence equipment market and we expect to see increasing activity from leading corporates within high value areas such as defence electronics and radar, sonar & sensors over the next 12 months.
Whether you are looking to make an acquisition, raise capital, sell your business or simply discuss your plans and long-term options Livingstone’s Defence & Security team would be delighted to speak with you in confidence.