No. 12: Well-armed for rapid growth

Key acquisitions drive success for BAE Systems

BAE Systems Inc.

Top 100 revenue: $2 billion

2007 revenue: $15 billion

2007 net earnings: $1.48 billion

2006 revenue: $11 billion

2006 net earnings: $665 million

Employees: 44,000

In December, BAE Systems capped 2007
with the $450 million acquisition of MTC
Technologies Inc., a provider of technical and
professional services to the military
and intelligence agencies.

The move supports BAE Systems'
capabilities in readiness and sustainment
and sets up the company for continued
growth in 2008, said Gene
Glazar, vice president of business development
at BAE Systems' Customer Solutions

BAE Systems Inc., the U.S. division of
U.K.-based BAE Systems, grew its prime contracting
dollars to $2 billion in 2007 and
ranks No. 12 on this year's Top 100 list.

BAE Systems has managed in a short time
to grow rapidly in the U.S. government market
through a strategy of aggressive acquisitions,
and last year was no
exception, said Anita
Antenucci, a managing
director at Houlihan
Lokey. In addition to MTC
Technologies, BAE
Systems spent $4.5 billion
earlier in the year to
acquire Armor Holdings, a
maker of armored trucks.

The deal, Antenucci
said, "really expanded BAE Systems' presence
in land vehicles, which is the one area in the
[United States] where they are truly a firsttier

A highlight in 2007 for BAE Systems' landvehicle
business was the award of a contract
modification in late December totaling
$708 million from the Army TACOM Life
Cycle Management Command for the reset of
1,043 Bradley Fighting Vehicles and associated
components. The company also joined
with General Dynamics Corp. to upgrade and
modernize BAE Systems' family of Bradley
fighting vehicles and General Dynamics' M1
Abrams tank.

BAE Systems captured a number of significant
contracts last year and gained new customers
in key national security accounts and
the military services. For example, the company
won the five-year $242 million Enterprise
Platform Integration Contract from the Space
and Naval Warfare Systems Command to provide
integration, engineering
and other services for
integrated command, control,
computers and intelligence
capabilities aboard new
ships. The contract, Glazar
said, expands the company's

Winning multiship,
multioption contracts to maintain
Ticonderoga-class cruisers and Arleigh
Burke-class guided missile destroyers directly
supports the company's readiness and support
focus, Glazar said. He added that taskorder
contracts, such as the Solutions for
Intelligence Analysis contract from the
Defense Intelligence Agency and the Support
to Management and Resources for Technical
Services program from the National
Geospatial-Intelligence Agency, are important
for continued growth.

During the next year, the company will
look for opportunities that further its strategic
focus on enterprise information technology,
readiness and sustainment, and mission
support, company officials said.

Already in 2008, BAE Systems is making
inroads in mobile communications and information
security, having captured a high-profile
$8.5 million Defense Advanced Research
Projects Agency contract to develop an
intrinsically secure mobile military communications
network designed to protect against

BAE Systems faces a potential stumbling
block this year, however. The parent company's
chief executive officer, Mike Turner, has
announced his resignation and will leave his
post no later than August, Antenucci said. The
company has yet to name a successor.

"Mike has been very, very supportive of
BAE North America's core strategy,"
Antenucci said, noting that there are some
within the company who question whether
it's necessary or pragmatic to have a separate
listing in the United States. "Since the company
is run by a proxy board as a U.S. company,
it really does take the endorsement and
support of the U.K. parent towards the leadership
of the U.S. entity. They have had that
and hopefully they still will, but that is a
question mark at this point."

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.


contracts DB