Lockheed Martin Corporation (LMT) divested its Pacific Architects and Engineers Incorporated (PAE) business to Lindsay Goldberg, LLC.
Lindsay Goldberg is a private equity firm based in New York City. The firm focuses on leveraged buyouts and growth capital investments in middle-market companies in sectors like consumer products, commodity based manufacturing, energy services, business services, financial services, energy transmission and waste disposal.
Lockheed Martin acquired PAE in 2006, which provided services that supported military readiness, peacekeeping missions, personnel recruitment and training, and disaster relief services. The acquired unit then became a part of the Information & Technology Services segment of the company.
Post-acquisition, the company undertook numerous steps to improve its business, build a leadership team and sharpen operations. However, following a thorough assessment, on June 2, 2010, the company decided to divest this unit. The divestiture is grounded in the fact that the services demanded by PAE’s consumers fail to resonate with the long-term business strategy of the company.
Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of orders with a leveraged presence in the Army, Air Force, Navy and IT. Also, the company’s focus on debt repayment, an ongoing share repurchase program and an increasing dividend will continue to shore up shareholder return.
However, we believe that budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds to our long-term Neutral recommendation on the stock.
Based in Bethesda, Maryland, Lockheed Martin is a global security company that designs and produces ballistic missiles, interceptors, target missiles and reentry systems with unmatched reliability.
Lockheed Martin’s focus on operational excellence helps produce affordable high-quality systems and services. It leads the industry in performance and domain expertise in strategic missile and missile defense systems. The company mainly competes with Northrop Grumman Corporation (NOC) and The Boeing Company (BA).
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