Yet another US defense acquisition
In yet another consolidation mover in the US defense industry, DRS has announced it will acquire Engineered Support Systems in a $2 billion deal. While these companies are not defense giants, they are strong mid-level firms and the notion is that the bigger they are, the stronger they are in competing with and dealing with (as subcontractors) with the industry giants like General Dynamics, Lockheed, Raytheon, Northrop, and others.
DRS is primarily involved in making components and subsystems for intelligence systems that are integrated by one of the bigger contractors. Engineered Services is in the maintenance and operation sector of the defense industry, less well-known then the companies that make weapons and weapons systems, but still in line for a large amount of Pentagon spending.
The move with make DRS one of the nation's top 25 defense contractors. As a Motley Fool.com report ("A More Dynamic Defense Duo", 9/22/2005) points out:
size matters when making bids on projects. The added "oomph" of the two companies' combined bulk could secure business that might have otherwise slipped through their fingers.
