Corporate News
Nortel to Acquire PEC Solutions, Inc. for US$448 Million
Representatives of Nortel announced a definitive agreement that Nortel's U.S. subsidiary, Nortel Networks Inc. (NNI), will acquire Virginia-based PEC Solutions, Inc., a leading government IT services firm, and create U.S.-based Nortel PEC Solutions to provide mission-critical solutions for U.S. federal, state and local government customers. NNI will acquire PEC for an estimated US$448 million (net of cash acquired) through a cash tender offer for all of the outstanding shares of PEC at US$15.50 per share. Nortel expects the acquisition to be earnings per share (EPS) neutral in 2005 and accretive thereafter.
PEC, founded in 1985 and based in Fairfax, Virginia, works with homeland security, law enforcement, intelligence, defense and civilian agencies across the entire scope of the U.S. federal government to solve the United States' most formidable technology challenges.
The acquisition of PEC is expected to provide the 'accelerator' for Nortel to compete more fully and completely in the government market. Nortel PEC Solutions will combine PEC's high-end professional services and Nortel's technology solutions to bring greater value - including a strong combined security offering - to existing partners, new partners, and customers in the U.S. government market.
With approximately 1,700 employees, PEC has 30 program offices in the U.S. in nine states and the District of Columbia. PEC's customer base includes: the U.S. Secret Service, U.S. Coast Guard, Office of the Chief Information Officer for Homeland Security, the Transportation Security Administration (TSA), Immigration and Customs Enforcement, the Department of Justice, Federal Bureau of Investigation, the U.S. Marshall Service, the Department of Defense, the U.S. Postal Service, and the Department of Veteran Affairs.
Upon completion of the transaction, expected in June 2005, PEC will be aligned with Nortel Federal Network Solutions to create Nortel PEC Solutions. Saffell will continue to lead Nortel's federal business. Nortel PEC Solutions will continue to be headquartered in Fairfax, Virginia.
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Huawei Technologies and Nigeria Ministry of Communications Signs a US$200 Million Telecommunications Partnership Agreement
Huawei Technologies Co. Ltd., one of the world's leading networking and communications equipment company and Nigeria's Ministry of Communications signed a US$200 million partnership agreement that furthers their cooperation in telecommunications. The signing ceremony took place in the Great Hall of People, in Beijing, China and was witnessed by Chinese President Mr. Hu Jintao and visiting Nigeria President Mr. Olusegun Obasanjo.
As part of the agreement, Huawei Technologies will deploy a nation-wide CDMA450 wireless access technology across Nigeria that will cost US$200 million. China Development Bank will provide Nigeria with a loan of US$200 million for this project. Huawei Technologies has also committed to an additional US$20 million manufacturing investment in Nigeria.
The CDMA450 wireless access technology is the most appropriate and cost-effective solution to address the telecommunications challenges faced by Nigeria. Similar to China, Nigeria has remote rural areas and vast but sparsely populated regions. CDMA450 provides wireless coverage of up to 60km in radius and one base station covers an area of 7,000 to 10,000 km 2 area. The CDMA450 wireless access technology will provide the necessary coverage and address the current telecommunications digital divide between the rural areas and cities in Nigeria.
Nigeria recognizes Huawei Technologies' capabilities to improve the communications capability in Nigeria's rural areas. Huawei's CDMA450 wireless solution will help address the wireless communications needs of Nigeria's 220 local governments and increase the telecommunications coverage of the country. The new technology solutions will also be conducive to our efforts in developing Nigeria's online capabilities in education and healthcare.
Since 1999, Huawei has initiated marketing in Nigeria, and the company's advanced technology and excellent customer service are well recognized by many operators in Nigeria. Huawei currently has partnerships with key Nigeria telecommunications operators including NITEL, MTN, Vmobile, Globacom and Starcoms. Today's announcement is significant because it marks yet another milestone cooperation between Huawei Technologies and Nigeria, following earlier partnerships including an agreement to introduce Next Generation Network (NGN) communications technology in November last year.
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General Dynamics Awarded US$62.5 Million for Abrams Integrated Management Materials
The U.S. Army TACOM Life Cycle Management Command has awarded General Dynamics Land Systems, a business unit of General Dynamics, a $62.5 million contract for the material associated with the production of 75 Abrams Integrated Management (AIM) tanks. Initial funding authorized under the contract was $31.25 million.
AIM is a joint effort to refurbish M1A1 Abrams main battle tanks involving the U.S. Army Project Manager for Combat Systems; the TACOM Lifecycle Management Command; its Anniston Army Depot, Anniston, Ala.; and General Dynamics Land Systems. Under the AIM program, M1A1 Abrams tanks are completely disassembled and overhauled to a like-new condition. Refurbished AIM tanks incur lower operational and support costs and report higher operational readiness rates.
Work will be performed in Lima, Ohio, and Eynon, Pa., by existing General Dynamics employees. The 75 AIM tanks are scheduled for delivery to U.S. Army units beginning in July 2006.
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Cisco Systems to Acquire Sipura Technology
Representatives of Cisco Systems announced a definitive agreement to acquire privately-held Sipura Technology, Inc. This represents Cisco's first acquisition for its Linksys division, the leading provider of wireless and networking hardware for home, Small Office/Home Office (SOHO) and small business environments. Sipura is a leader in consumer voice over internet protocol (VoIP) technology and is a key technology provider for Linksys' current line of VoIP networking devices. In addition to Sipura's valuable technology and customer relationships, their experienced team with extensive VoIP expertise will help build a foundation for Linksys' internal research and development capabilities in voice, video and other markets.
Under the terms of the agreement, Cisco will pay approximately $68 million in cash and options for Sipura. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the fourth quarter of Cisco's fiscal year 2005 ending July 30, 2005.
Consumer VoIP is rapidly expanding as independent providers and incumbent telecom and cable operators bring VoIP offerings to consumers. Synergy Research Group, a leading market research firm, reports that today there are close to 8 million home users worldwide using VoIP to make phone calls over their broadband connections. By 2009, Synergy anticipates this number to grow to 58.9 million home users using VoIP to talk to friends and family around the world using broadband and VoIP technology.
Sipura has developed the technology incorporated in leading VoIP adapters (including those integrated into home routers and gateways) and a multi-line IP phone for the consumer and SOHO market. Sipura's technology is currently used by Linksys in some VoIP products, including certain analog telephone adapters and wired and wireless routers with phone ports. Sipura currently has relationships with regional and top-tier VoIP providers. Linksys will continue to work with those service providers, as well as use its traditional retail channels to target consumers and SOHO environments with Sipura's line of VoIP products.
Upon close of the transaction, Sipura will be integrated into Cisco's Linksys division, led by Senior Vice Presidents Janie and Victor Tsao. Sipura was founded in March 2003 and is headquartered in San Jose, Calif.
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Raytheon Receives US$44 Million U.S. Navy Award for F/A-18 Threat Protection Systems
Raytheon Company has been awarded a US$44 million contract for production of its ALR-67(V)3 radar warning receiver system for the U.S. Navy. The ALR-67(V)3, which is the state-of-the-art radar warning receiver on U.S. Navy F/A-18E/F carrier-based tactical aircraft, recently completed a successful initial deployment in Operation Iraqi Freedom.
The award was received from the U.S. Navy's Naval Air Systems Command, Patuxent River, Md., and calls for the delivery of 42 radar warning receivers plus spares. Three annual follow-on options call for 92 additional systems and are valued at US$116.8 million.
Deliveries of the system under the Lot 7 contract will begin in October 2006 and are expected to be complete by September 2007. The production award represents the seventh full rate production lot awarded to Raytheon. Low rate initial production of the system began in June 1998, followed by full rate production (Lot 1) in August 1999.
The system, designated the AN/ALR-67(V)3, provides advanced techniques to detect and identify threat radar emitters, thereby enhancing the survivability of aircraft equipped with the system. A total of 284 radar warning receivers plus spares has now been ordered under the overall production program. Future international sales of the system are also possible. Work on the radar warning receiver is being done by the company's Electronic Warfare Systems organization in Goleta, Calif., with support provided by facilities in El Segundo, Calif., Forest, Miss., and McKinney, Texas.
The ALR-67(V)3 is designed to enhance the survivability of aircrews by providing improved situational awareness in today's complex electronic warfare environments. This includes emitter identification, extended capabilities in detection and processing, threat location and potential lethality. Raytheon has packaged the channelized radar warning receiver into an 100-pound system that is designed to meet the Navy's electronic warfare requirements well into the 21st Century.
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Lockheed Martin Board of Directors Elects Robert J. Stevens As Chairman of the Board
The Lockheed Martin Corporation board of directors has elected Robert J. Stevens as Chairman of the Board, effective Thursday.
This action follows an announcement on Nov. 23, 2004 regarding Vance Coffman's intent to retire as Chairman of the Board after 37 years with the company, including seven years as CEO.
Stevens assumes his new duties as Chairman of the Board, while retaining his position as President and CEO.
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Boeing Names Stork Fokker to 747 Large Cargo Freighter Design Team
Boeing has named Stork Fokker AESP of the Netherlands to its team designing the structure of the 747 Large Cargo Freighter, a specially modified 747-400 jet that will transport major assemblies for the all-new Boeing 787 Dreamliner.
Stork Fokker and Boeing will collaborate on the design of the Large Cargo Freighter's all-new pressure bulkhead. The bulkhead protects the cockpit area from cargo sliding forward and helps maintain the cockpit's cabin pressure. Stork Fokker joins Spain's Gamesa Aeronautica and Boeing engineers in Everett, Wash., Moscow and Canoga Park, Calif., in developing the unique freighter's structural design.
Boeing will use three Large Cargo Freighters as the primary means of transporting major 787 assemblies to its Everett, Wash., final assembly site from partners around the world.
The 787 is an all-new family of mid-sized airplanes that will provide exceptional fuel efficiencies for airlines and superior comfort for passengers. It enters service in 2008. Boeing has 203 announced firm orders and commitments for the 787 from 17 airlines.
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Raytheon Resumes Production of TOW ITAS Precision Guidance Systems Under $32 Million Contract
Raytheon Company will produce and deliver to the U.S. Army Improved Target Acquisition Systems (ITAS) under a $32.3 million contract from the U.S. Army's Aviation and Missile Command, Huntsville, Ala. From 1999 through 2003, the Army procured 709 ITAS units; the order announced today marks the resumption of system production.
ITAS is the advanced fire control system that guides TOW (Tube-Launched, Optically Tracked, Wire-Guided) weapon systems to their targets with surgical precision. The targeting system significantly increases TOW's effective range, improves the weapon's ability to hit a target with minimal collateral damage and allows a soldier to engage and destroy targets from safe stand-off distances. ITAS's 2nd generation FLIR (forward-looking infrared) sensor also provides long range reconnaissance and surveillance capability 24/7, in all weather and battlefield conditions.
ITAS is fielded in Operation Iraqi Freedom and Operation Enduring Freedom where it has demonstrated its value in all phases of the conflict and subsequent peace-keeping efforts.
