Lockheed Martin (LMT) Set to Purchase Terran Orbital for $450M

Lockheed Martin Corp. LMT recently signed a contract to acquire a manufacturer of satellite products, Terran Orbital. The acquiree offers satellite-based solutions that serve the aerospace and defense industry.The acquisition has an estimated enterprise value of $450 million. For each outstanding share of common stock, Lockheed Martin will pay 25 cents in cash to purchase Terran Orbital and pay off its current debt. The buyout is expected to be completed in the fourth quarter of 2024.Benefits of the AcquisitionTerran Orbital’s acquisition is expected to further strengthen Lockheed Martin’s footprint in the aerospace and defense industry, particularly in space systems, wherein LMT already enjoys a strong presence. Terran Orbital’s end-to-end satellite solutions, combining satellite design, production, launch planning, mission operations and on-orbit support to meet the needs of the most demanding military, civil and commercial customers, are aligned with LMT’s value generation approach.The aforementioned factors will provide Lockheed Martin with an opportunity to expand its customer base, enhance its product offerings and increase its market share in the satellite-based solutions business area.Overall, the acquisition is likely to be instrumental to LMT’s growth in the satellite product space and broaden its product portfolio, which should bolster its revenue-generation prospects.What’s Driving Acquisitions Among Aerospace Defense Players?The military industry has seen a notable rise in mergers and acquisitions recently due to several factors like the growing emphasis on cost-reduction initiatives, diversifying their portfolio to tackle competition and achieving economies of scale, along with operational efficiency to attain long-term goals. These transactions are becoming more significant, allowing businesses to grow as they see fit by expanding their operations, gaining access to new skills, developing technologies and ultimately producing higher-quality goods and services as well as capturing larger market shares.Lockheed Martin’s latest decision to acquire Terran Orbital also seems to have been motivated by the aforementioned factors.Peer MovesApart from Lockheed Martin, defense companies that have recently indulged in valuable acquisition deals are as follows:In March 2024, Teledyne Technologies TDY agreed to acquire Valeport Holdings 2019 Limited and its affiliates, a designer and manufacturer of underwater sensors for environmental, energy, construction and defense applications. This buyout should boost TDY’s Marine technology offerings.The company has a long-term (three to five years) earnings growth rate of 7.3%. It delivered an average earnings surprise of 3.47% in the last four quarters.In May 2024, TransDigm Group, Inc. TDG agreed to acquire Raptor Scientific for $655 million, a manufacturer of complex test and measurement solutions primarily serving the aerospace and defense end markets. Through this acquisition, TDG should be able to provide a wider range of products and gain a larger market share in the highly engineered aviation components industry.TransDigm Group has a long-term earnings growth rate of 20.7%. The Zacks Consensus Estimate for its fiscal 2024 sales calls for an improvement of 19.4% from the prior-year figure.In April 2024, Curtiss-Wright Corporation CW completed the acquisition of WSC, Inc. for $34 million. The buyout is expected to expand Curtiss-Wright’s portfolio of advanced commercial nuclear technologies utilized in the modernization of existing power plants and the design of new power plants, such as Advanced Small Modular Reactors.The Zacks Consensus Estimate for CW’s 2024 sales implies an improvement of 6.9% from the prior-year figure. The company boasts a four-quarter earnings surprise of 11.52%, on average.Price MovementIn the past three months, shares of Lockheed Martin have risen 19.9% compared with the industry’s growth of 3.1%.Image Source: Zacks Investment ResearchZacks RankLMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Transdigm Group Incorporated (TDG): Free Stock Analysis Report Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report Curtiss-Wright Corporation (CW): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks