The latest defense contractor to contribute to the acquisition
). The company's business arm TRU Simulation + Training Inc.
acquired ProFlight, LLC, a leading innovative and advanced pilot
training service provider. TRU Simulation delivers high-fidelity
aviation simulation and training services to both civil and
ProFlight offers specialized Cessna Citation CJ Series training,
Cessna Conquest Series training and innovative continuous currency
programs. These programs provide pilots with enhanced training
flexibilities and expertise.
The new acquisition will bode well for Textron as it manufactures
Cessna aircraft and that most of ProFlight's customers are Cessna
pilots. With ProFlight merging with TRU Simulation, Textron will be
able to leverage its manufacturing, product and after-market
service capabilities to provide comprehensive pilot training
solutions to its existing as well as future aviation customers.
The current sequestration wave has drove defense players like
Textron to enter into the acquisition mode. Dwindling millitary
spending and industry uncertainty has got standard defense
operators to consolidate their business through acquisitions beyond
the core military sector.
Notable acquisitions by Textron so far in 2014 include the closure
of the purchase of Beech Holdings LLC, the parent company of
Beechcraft Corporation in Mar 2014. In addition, the company in May
2014 procured TUG Technologies Corp. from Jacobson Partners. TUG
manufactures ground support equipment for airlines, air-freight
companies, ground handlers, government agencies and airports.
Meanwhile, defense contract flows has been bumpy for the company
this year and Textron is looking to ride the sequestration effect
via its growth-by-acquisition strategy. The company got off to a
lackluster start in 2014 with earnings lagging the Zacks Consensus
Estimates by a sharp 22.5% in the first quarter of 2014. How well
these acquisitions will bring synergies to Textron is something we
are curious to see.
Currently, Textron carries a Zacks Rank #4 (Sell). However,
investors could look out for better-ranked defense stocks like
Lockheed Martin Corp.
The Boeing Company
General Dynamics Corp.
). All these stocks presently sport a Zacks Rank #2 (Buy).
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