Monday May 08, 2006

Lockheed Martin

This is the first week of my employment with Lockheed Martin, a giant US$32 billion defence contractor, makers of the F-22 Raptor and F-35 jet fighters. Well ... kind of.

Let's back-track. Last Thursday, an announcement came out for an "all-hands company meeting", it said to turn up the next day at 8.30 am for an important company meeting. Ouch, that was early - many of us turn up, let's just say a little bit later than that, usually. Okay, so I woke up early. And as per my usual habit, I logged in to read the company email to see if I, or anyone else, had broken the automated build the night before (paranoia is an official corporate value). No broken builds, but there was this email from the CEO sitting in the inbox :

"... I am very proud to announce that Savi has signed an agreement to be acquired by Lockheed Martin ... an overview of Lockheed Martin and a copy of the press release being issued by Lockheed Martin concurrent with this email are attached ..."

Yeow. As a military-tech enthusiast I knew immediately who and what they were. The original stealth fighter, the F-117 Nighthawk came from the Lockheed Skunk Works. On the less exotic, but higher-volume side, they supply the F-16 Falcon fighters and also the C-130 cargo/troop transport aircraft for air forces around the world.

So ... what's a plane company doing buying an RFID systems company? Turns out that they do have a division doing systems stuff, Integrated Systems & Solutions, they call it, I think.

Here's one of the press releases :

mercurynews.com :

Savi Technology, a Sunnyvale company whose radio frequency identification technology is used in U.S. military gear, is being purchased by Lockheed Martin, the companies announced Thursday. Terms of the sale were not released, but a source close to the transaction said the price was around $400 million. It is relatively unusual for defense contractors like Lockheed to buy Silicon Valley companies, but the deal comes at a time of high interest in the radio frequency identification, or RFID, market.

"We are delighted to be joining Lockheed Martin," Vic Verma, chief executive officer of Savi, said in a statement. "Our customers and employees will significantly benefit from the enhanced capabilities of this combination."

"The acquisition of this innovative company is consistent with our strategy of making investments that significantly enhance the capabilities we can offer our customers," Bob Stevens, Lockheed Martin's chairman, president and CEO, said in a statement.

Savi has grown by winning contracts with the U.S. military for use on equipment in Iraq and Afghanistan. Every piece of U.S. military materiel shipped to those two countries - from boots to ammunition - has an RFID tag. RFID technology is also used to track ocean cargoes and monitor security and environmental conditions.

Founded in 1989, Savi employs about 300 people. The Savi deal is expected to close in the second quarter, subject to antitrust review. Savi will be a wholly owned subsidiary of Lockheed Martin, managed by Lockheed Martin Integrated Systems & Solutions. Headquartered in Bethesda, Md., Lockheed Martin employs about 135,000 people worldwide.

And here are some more : defenseindustrydaily.com, rfidjournal.com, rfidupdate.com.

- As for what I think, well, I think it's highly interesting. From a peakoiler's perspective, I'd say that defence is one of the industries that should do relatively well in these coming times, along with government, healthcare and finance. If I was "only" on the periphery of the military-industrial complex earlier, well, this makes things a little different now, doesn't it. This also continues the trend of mergers and consolidations that I've been expecting in general. So, we'll see how it goes from here.

(2006-05-08 13:51:15 SGT) [Musings] Permalink

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