Lockheed continues diversification push
Lockheed Martin Corp. apparently is in the hunt to buy another Australian IT company.
A Lockheed spokeswoman declined to comment on reports from Australia that the company was attempting to buy a company called ASG; however, ASG filed with the Australian Securities Exchange that Lockheed had made two offers to acquire them.
The one hitch is that, according to the filing, Lockheed’s offer of 68 cents a share isn’t high enough, so they’ve rejected the advance, but remain in discussions. ASG also is in talks with other unidentified suitors.
ASG, headquartered in Perth, is a provider of a variety of IT solutions, including managed services, SAP, IT service management and cloud services.
For the six months ended Dec. 31, the company had $75.8 million in revenue (Australian dollars), which was 0.2 percent lower than a year earlier. It also reported a loss of $6.7 million.
Australia has become an important market for Lockheed, which began a more aggressive international push a few years ago when it saw the U.S. market start to stagnate. The company acquired RLM Systems, a defense and intelligence firm in 2007. In 2010, it won the Australian Taxation Office contract, worth about $60 million a year, to manage its IT systems.
Lockheed has about 400 employees in the country.
Seventeen percent of Lockheed’s $47.2 billion in revenue comes from international customers, according to its 2012 annual report. About half of that is through foreign military sales, which covers a lot of defense hardware.
In the Information Systems & Global Solutions business, 4 percent of the $8.8 billion in 2012 revenue is from international customers, according to the annual report.
The move in Australia fits with the strategy that Linda Gooden described to me in our interview. Gooden is retiring as the executive vice president of Information System & Global Solutions on April 1.
She said that Lockheed faced a choice a few years ago, as it saw the U.S. market flatten: hunker down and ride it out, or invest to be better positioned for when the market turns around.
The investment has included technology such as cloud, cyber and data analytics, but also moves into markets such as Australia, the United Kingdom, where it has won contracts to provide air traffic control and census work, and the Middle East, where it is building a command and control system for the United Arab Emirates.
“We drove a strategy that said we are going to take care of core customers but we are going to extend our capabilities in to the international markets,” she said.
So whether or not Lockheed ultimately gets rebuffed by ASG, look for them to keep making these kinds of investments around the globe.
Posted by Nick Wakeman on Mar 25, 2013 at 7:24 PM