HII head says large acquisitions unlikely for now

Alion Science and Technology, which HII acquired in 2021, makes the Nano Cricket electronic warfare system. (HII)

US shipbuilder HII, which purchased engineering firm Alion Science and Technology for USD1.65 billion in 2021, is unlikely to make another large acquisition in the near future, according to Christopher Kastner, HII president and CEO.

While HII, formerly Huntington Ingalls Industries, will continue to evaluate acquisition opportunities, “I don't see anything as significant as Alion over the next couple of years”, Kastner said on 2 June. “It would be kind of a niche capability” that HII would consider.

While HII expects to generate plenty of cash, it wants to use much of that money to increase its dividend and reduce its debt, Kastner told the Bernstein 38th Annual Strategic Decisions Conference.

Kastner, who became CEO in March, said the Alion acquisition has benefitted both companies. It has enabled HII to compete for technology-focused contracts it earlier did not have the expertise to pursue. Becoming part of a larger enterprise has given Alion the resources it needs to compete for more contracts.

HII has said it acquired Alion to enhance its portfolio in such growing areas as artificial intelligence; big data; command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance (C5ISR); electronic warfare; and training and simulation. HII has integrated Alion into its Mission Technologies division, formerly Technical Solutions. The division has also absorbed several other acquisitions in recent years, including unmanned underwater vehicle manufacturer Hydroid, which HII bought for USD350 million in 2020.