L3 extends recasting effort, combines segments into new ISR unit

L3 Technologies has consolidated two of its business segments into a new intelligence, surveillance and surveillance systems business amid the defense contractor's ongoing push to recast itself in the market.

The move to combine its aerospace and sensor systems segments into the new ISR systems unit is effective immediately, L3 said Thursday. Current sensor systems president Jeffrey A. Miller will lead ISR systems, which L3 expects to generate $4.7 billion in revenue this year, or almost half of expected total sales. Mark Von Schwartz, current aerospace president, will retire from the company after three years of leadership over that business.

During L3's second quarter earnings call on July 26, CEO Chris Kubasik told analysts that company management was considering a plan to reduce from four segments to three. "In order to move up the food chain and deliver more integrated solutions, we need to be better coordinated in developing technology and agile in addressing customer needs," Kubasik said at the time.

Kubasik succeeded L3's longtime chief Michael Strianese in January and has made several moves to further position the New York City-based company as a "non-traditional sixth prime" focused on the development and integration of high-end technologies and other platforms in support of the current National Defense Strategy.

The company has been both an aggressive seller and acquirer this year as part of that recasting effort. L3 sold Vertex and two other aerospace units in early July and has since gone on to make three acquisitions for around $250 million total.

That buying spree started on the heels of the Vertex sale's closure with the $50 million purchase of space technology outfit Applied Defense Solutions. Almost a week later, L3 said it would pay $200 million to acquire information security companies Azimuth Security and Linchpin Labs for more cyber, intelligence and surveillance offerings.

Kubasik told analysts on a May earnings call L3 could spend at least $300 million on acquisitions this year after the Vertex sale got done.