Brightstar Capital Partners’ Post

Astrion, a Brightstar Capital Partners Portfolio Company, has signed a definitive agreement to acquire Axient. Astrion is a systems integrator that advances defense and civil missions from aerospace to cyberspace with multi-domain test and analysis, mission engineering and operations, and technologies. Axient advances defense and civilian missions from aerospace to cyberspace with multi-domain test and analysis, mission engineering and operations, and technologies. Brightstar Capital Partners is a middle market private equity firm that focuses on investing in industrial, manufacturing, and services businesses where the company believes it can drive significant value with respect to the management, operations, and strategic direction of the business. -Astrion Read more here: https://lnkd.in/g-FdNWFj #cyberspace #engineering #technology #equity #mergersandacquisitions David Zolet | Greg Esses | Jake Kennedy | Lauren Kilcoyne | Dalia Khanafseh

Technology never stops evolving and acquisition processes shouldn’t either. DOD is making strides to shepherd #innovation by creating flexible acquisition pathways and new contracting tools. The aim is to drive the use of commercial technologies and collaboration with nontraditional defense firms and commercial enterprises. This is great forward progress to expand the department’s innovation ecosystem. I’m excited to see how AT&T can use these opportunities to support our warfighters and deliver on critical mission needs. https://lnkd.in/e3a3JrSq

BGL Managing Director William Farmer, who leads the firm’s Aerospace, Defense & Government Services investment banking practice, is a featured contributor for Washington Technology, with a piece entitled, “How tech investments spur M&A activity across the federal market.” In the article, Bill discusses how national security challenges and the rapid influx of new technologies are helping drive activity in the defense sector. He says the growing focus on emerging technologies will likely influence future deal activity, with a leaning toward smaller transactions that can be accelerated through acquisitions by larger players. For all of Bill’s insights on M&A in the defense sector, including his outlook for the second half of 2024, read the complete article here: https://lnkd.in/gvPsZn-F.   #Investmentbanking #MergersandAcquisitions #Aerospace #Defense #Technology

"Honeywell has agreed to buy aerospace and defense technology company CAES Systems for $1.9 billion from private equity firm Advent International, it said on Thursday, to give a boost to the manufacturing giant's aerospace technologies unit. The all-cash deal to buy CAES, which develops electronics such as antenna systems and communication networks for aerospace and defense companies, marks Honeywell's third acquisition so far this year. The latest deal comes at a time when top defense firms have seen orders surge in response to drawn out conflicts, including the Russian aggression against Ukraine and the ongoing war in Gaza. The CAES acquisition is expected to improve and expand Honeywell's defense technology solutions across land, sea, air and space." #finance #equipmentfinance #equipmentleasing #financialservices #corporatefinance #honeywell #mergersandacquisitions #defense https://lnkd.in/efFTbeBh

This is a lasting and very historic debate. Innovation comes in many forms some from the user and some from the sciences and R&D. We all agree that R&D needs to be mission focused and understand requirements. However, if it is pulled directly into acquisition then the R&D funding runs the risk of being absorbed into existing programs that are far over running in cost and schedule yet failing to deliver over hyped capabilities. This could lead to a state where our defense department is in a propetual race to integrate and adapt commercial capabilities faster than our adversaries with little long lasting advantage. If we fully tie R&D to known needs and fixing broken links in the chain we may never invent a new chain. No cell phone user would have agreed to spend $1,000 on a phone in the early 1990’s but today most people can’t think of a world without a smart phone. Corning continued to pursue fiber optics even when the telecom industry said they would never use it and today we have global interconnectivity because of fiber optics. Therefore, we must consider how to keep R&D calibrated to the mission and manage innovation and R&D with transition pathways in mind and plan for and fund those transition initiatives.

".....mapping the most promising, highest impact and most mature research capabilities to the acquisition system is a long overdue reform. Either the Defense Department or Congress should require transition plans for successful research. Since research without a transition plan to production confines the research to a lab, research projects of any size should be explicitly mapped to a military need and a customer willing to identify budget dollars to acquire the capability. Since research outcomes are uncertain there will not be a one-to-one correlation of research to acquisition, but a system that does not even prioritize this connection is doomed to both waste money and frustrate vendors. We must ensure our record investment in research is connected explicitly to an acquisition system that fields capabilities for our warfighters."

Historically speaking this is an old debate, going back to the early days World War II (prior to that, what’s now Air Force Research Laboratory didn’t engage in much basic “science”): should S&T/R&D be directly tied to operational needs to make the work more relevant and improve technology transition, or should it be kept independent to encourage more innovative thinking and promote more “breakthrough” technologies? In simpler terms: requirements pull or technology push? This has been reflected in the Air Force in part by its organizational structure, particularly how closely its labs been aligned to its product/systems centers. Obviously it’s always been on a spectrum and not entirely one or the other, but which should be the focus? What are the trends? Science (or a more independent S&T enterprise) has always suffered in wartime when more immediate needs surpass long-term investments that won’t pay off until after the conflict is over (e.g., WWII, Vietnam, & post-9/11). Conversely, moments of “technological surprise” (e.g., Nazi wonder weapons and Sputnik) flip the script and criticize too much short-term investment. Whichever is the case, the reaction is to swing the pendulum the other way to “correct” the balance. However, a significant factor to consider when evaluating the effectiveness of either approach is the quantity of opportunity for technology transition. Have there been enough new platforms, or ones being modernized, or does the budget process incentivize the introduction of the novel products of breakthrough science, to facilitate such transition? One final note: what is the “product” of the Air Force, or the military in general? It’s not the systems; it’s winning (or preventing) wars. That’s not precisely analogous to private enterprise, which means there are limits to the comparisons.

The #DoD is not a company. Say it with me now… the #dod is not a company. There are no private shareholders. There is no “CEO”. The business model is not the right frame. Sure… are there bureaucratic reasons to have better coordination between R&E and A&S? Yes. But there are good- legally required through Congress (because it’s the American taxpayer who pays for the budget) reasons- why there are different legal authorities and different incentive structures. This is not a *profit maximization* model. It’s a long and short term capabilities model that has to be equipped now, prepare for contingencies and plan for long term undetermined futures. Stop talking about it like a company.

Good quick read on part of the problem. The budget process is the heart of the problem. Great ideas, that are explored in the S&T communities and transition to promising capabilities still lag for years because of the requirements, budget approval, and program initiation processes alone; never mind the necessary development, test, and certification requirements. PEOs can’t move quickly without funding no matter how compelling and mature the capability is. Initiatives like Replicator are steps in the right direction but we need a longer term reform solution in order to modernize at the speed necessary to keep up with our adversaries. How many projects are stalled right now because of our budget process?

This goes beyond the transition of projects to programs of record; it also calls for an intricate architecture needed to depict an integrated framework across portfolio, domain, and enterprise.