Harris Corp (NYSE:HRS) is creating a new space and intelligence systems division following its acquisition of Exelis.
The division will be led by Bill Gattle, who has been managing Harris’ national systems business unit that houses most of the…
Harris Corp (NYSE:HRS) is creating a new space and intelligence systems division following its acquisition of Exelis.
The division will be led by Bill Gattle, who has been managing Harris’ national systems business unit that houses most of the defence contractor’s space operations.
Harris is being reorganised following the Exelis purchase into four market-focused units to increase operational efficiency and capture synergies.
Bringing together Harris and Exelis’ space expertise, Gattle’s unit will provide “complete earth observation, weather, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics”.
The other divisions are called Communication Systems, Critical Networks, and Electronic Systems.
Harris agreed to buy Exelis for US$4.75bn in early February at a price equivalent to 9.3 times Exelis’ 2014 EBITDA guidance and the deal completed at the end of May.
The Exelis acquisition shifts Harris’ position as a US defence contractor, making it the second largest tier 2 contractor behind L3 Communications. After gaining scale and expertise, Harris believes it is far better positioned to compete for much larger, more complex DoD programmes.
The squeezed budgets of the past couple of years predominantly benefitted the prime defence contractors like Lockheed Martin, Boeing and General Dynamics. The lack of organic growth for the smaller players led to a host of analysts predicting that a wave of consolidation was inevitable.
However, until last year’s merger of ATK and Orbital Sciences, transformational M&A in the sector was conspicuous by its absence.
With the defence budget now thought to have hit an inflection point and the cost of financing deals at historic lows, some analysts are back beating the consolidation drum.
Commenting on the reorganisation, William Brown, Harris’ chairman, president and CEO, said: “We combined Harris’ and Exelis’ top talent and technology to create four market-focused segments aligned with Harris’ strategic growth platforms.
“Our new structure will help us improve our competitive position, increase efficiency, and capture synergies, while we continue to bring innovative and affordable solutions to our customers.”
Elsewhere Sheldon Fox, who has been leading the acquisition integration effort, has been promoted to senior vice president of integration and engineering.
Dana Mehnert has been elevated to senior vice president, chief global business development officer, with responsibility for “driving topline growth, leveraging complementary channels, and capturing large multi-year opportunities”. Mehnert was previously president of Harris’ RF communications segment.
