No. 12: Well-armed for rapid growth

In December, BAE Systems capped 2007with the $450 million acquisition of MTCTechnologies Inc., a provider of technical andprofessional services to the militaryand intelligence agencies.The move supports BAE Systems'capabilities in readiness and sustainmentand sets up the company for continuedgrowth in 2008, said GeneGlazar, vice president of business developmentat BAE Systems' Customer SolutionsGroup.BAE Systems Inc., the U.S. division ofU.K.-based BAE Systems, grew its prime contractingdollars to $2 billion in 2007 andranks No. 12 on this year's Top 100 list.BAE Systems has managed in a short timeto grow rapidly in the U.S. government marketthrough a strategy of aggressive acquisitions,and last year was noexception, said AnitaAntenucci, a managingdirector at HoulihanLokey. In addition to MTCTechnologies, BAESystems spent $4.5 billionearlier in the year toacquire Armor Holdings, amaker of armored trucks.The deal, Antenuccisaid, "really expanded BAE Systems' presencein land vehicles, which is the one area in the[United States] where they are truly a firsttiercontractor."A highlight in 2007 for BAE Systems' landvehiclebusiness was the award of a contractmodification in late December totaling$708 million from the Army TACOM LifeCycle Management Command for the reset of1,043 Bradley Fighting Vehicles and associatedcomponents. The company also joinedwith General Dynamics Corp. to upgrade andmodernize BAE Systems' family of Bradleyfighting vehicles and General Dynamics' M1Abrams tank.BAE Systems captured a number of significantcontracts last year and gained new customersin key national security accounts andthe military services. For example, the companywon the five-year $242 million EnterprisePlatform Integration Contract from the Spaceand Naval Warfare Systems Command to provideintegration, engineeringand other services forintegrated command, control,communications,computers and intelligencecapabilities aboard newships. The contract, Glazarsaid, expands the company'smission-supportcapabilities.Winning multiship,multioption contracts to maintainTiconderoga-class cruisers and ArleighBurke-class guided missile destroyers directlysupports the company's readiness and supportfocus, Glazar said. He added that taskordercontracts, such as the Solutions forIntelligence Analysis contract from theDefense Intelligence Agency and the Supportto Management and Resources for TechnicalServices program from the NationalGeospatial-Intelligence Agency, are importantfor continued growth.During the next year, the company willlook for opportunities that further its strategicfocus on enterprise information technology,readiness and sustainment, and missionsupport, company officials said.Already in 2008, BAE Systems is makinginroads in mobile communications and informationsecurity, having captured a high-profile$8.5 million Defense Advanced ResearchProjects Agency contract to develop anintrinsically secure mobile military communicationsnetwork designed to protect againstcyberattacks.BAE Systems faces a potential stumblingblock this year, however. The parent company'schief executive officer, Mike Turner, hasannounced his resignation and will leave hispost no later than August, Antenucci said. Thecompany has yet to name a successor."Mike has been very, very supportive ofBAE North America's core strategy,"Antenucci said, noting that there are somewithin the company who question whetherit's necessary or pragmatic to have a separatelisting in the United States. "Since the companyis run by a proxy board as a U.S. company,it really does take the endorsement andsupport of the U.K. parent towards the leadershipof the U.S. entity. They have had thatand hopefully they still will, but that is aquestion mark at this point."