Monday was just another day at the office for L-3 Communications
Already partnered with privately owned Airborne Technologies on the "Cutlass" air-deployed UAV program, L-3 ripped a page from the Boeing
Airborne Tech who?
Never heard of Airborne Technologies? Don't be embarrassed. According to L-3's press release, the Ashburn, Va.-based defense contractor is pretty small fry, bringing in only about $20 million a year in sales. But don't be misled by its size. Airborne Tech, or ATI for short, flies all over the unmanned-aerial-vehicle field.
According to its website, ATI has a hand in many of the hottest UAV projects now going. Its customer list includes DARPA, the DoD, Northrop Grumman
In short, ATI has an "in" with just about everybody who's anybody in the UAV industry. As such, this acquisition holds the potential to up L-3's game considerably, and give it a hand (and subcontractor revenue) in just about every UAV project on tap.
But at what price?
L-3's keeping mum on the purchase price for now, but if it ever discloses what it paid, I hope any investors allergic to high prices have their meds at hand. Prices in this industry are skyrocketing. When Textron
Considering the rate of UAV industry price inflation, I wouldn't be too surprised -- nor particularly pleased -- if the price tag on ATI goes as high as five times sales, to $100 million.
On the plus side, Textron's purchase netted it the very popular Shadow UAV, while Insitu gave Boeing a lock on ScanEagle -- and almost certainly helped Boeing win the Navy's STUAS/Tier II contract last month. So even if L-3's purchase turns out to be as pricey as I fear, it may be worth it.
Further defensive Foolishness:
Fool contributor Rich Smith owns shares of AeroVironment. General Dynamics is a Motley Fool Inside Value pick, and AeroVironment is a Motley Fool Rule Breakers recommendation. The Motley Fool has a disclosure policy, and trial members of any Fool newsletter can fly free for 30 days.