Two US-based businesses that BAE Systems acquired last year for a total of GBP1.7 billion (USD2.2 billion) are performing well and exceeding expectations, according to company officials.
BAE Systems’ projects continued growth in 2021. (BAE Systems)
Integration of the Airborne Tactical Radios (ATR) and the Military Global Positioning System (GPS) businesses into BAE’s Electronic Systems segment has proceeded smoothly despite logistical challenges posed by the coronavirus pandemic, said Tom Arseneault, CEO of BAE’s US subsidiary. In addition, both businesses have recently secured significant contract awards.
“We remain delighted with the two acquisitions,” Arseneault said on 25 February. “They are contributing ahead of our initial expectations, and we expect that it will translate well for us downstream.”
BAE acquired both businesses from Raytheon Technologies Corporation, which was required by regulators to sell them as part of its merger with United Technologies Corporation. The ATR business, which is located in Fort Wayne, Indiana, and Largo, Florida, makes communication systems, while the GPS business, which is based in Cedar Rapids, Iowa, produces secure GPS receivers.
Arseneault made his comments as BAE announced that its sales totalled GBP20.9 billion in 2020, up 3.7% from the previous year. The British defence contractor’s Air segment led the group, increasing 6.1% to GBP7.9 billion, fuelled by the F-35, Typhoon support, and Qatar programmes.
The United States accounted for 45% of BAE’s sales last year, followed by the United Kingdom at 19%, Saudi Arabia at 13%, and Australia at 3%.
BAE’s underlying earnings before interest, taxes, and amortisation (EBITA) inched up 0.7% to GBP2.1 billion in 2020. “Pandemic-related disruptions did impact profit in the first half of the year, but the second half was stronger, enabling the company to deliver higher year-on-year profit,” the company said.