AEROSPACE, DEFENSE AND

GOVERNMENT SERVICES GROUP

Industry Review
and Analysis
July 2010

Market Outlook 1
Current Mandates 5
Recent Transactions 6
Industry Experience 10
Upcoming Events 11
Mergers . Acquisitions . Divestitures . Capital Raising
Fairness Opinions . Recapitalizations . Restructurings
Industry Professionals 12
Costa Mesa . Chicago . London

AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP
The following data was compiled
by McGladrey Capital Markets’
Aerospace & Defense Investment
Banking Group and shared
exclusively with our industry clients
and contacts.
By tracking all related industry
transactions, we constantly strive to
bring you the most up-to-date and
accurate view of important trends
and relevant financing activity within
the aerospace & defense industries.
We trust you will find this information
valuable in determining your
business and financial goals.
. .
Mergers Acquisitions Divestitures . Capital Raising
.
Fairness Opinions Recapitalizations . Restructurings
.
Costa Mesa Chicago London . pushing the industry into the black.” This fares well for MRO previous results were afflicted
. providers, which are directly dependent on aircraft utilization. by recession, terrorist attacks,
888.900.0411 www.mcgladreycm.com
Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC
July 2010
Market Outlook
Market Sentiment Changing Daily – MCM’s M&A Thesis Intact….But…Volatility is Back
Recent volatility in the market, driven by uncertainty in the European/global financial system and a
possible stalling of the tentative global recovery, has increased
the risk sensitivities of buyers and sellers. Although volatility “MCM is currently experiencing
can drive or frustrate M&A activity, mostly the latter, we remain a ramp in deal activity, both in
comfortable with our thesis that AD&G M&A activity will build
quality and quantity, which has
in the second half of the year. MCM is currently experiencing
a ramp in deal activity, both in quality and quantity, which has been echoed by our contacts
been echoed by our contacts in the AD&G sector and private in the AD&G sector and private
equity community. Quality companies, in favorably viewed
AD&G sub-sectors, should experience an accelerated amount equity community.”
of M&A interest in 2H10.
The re-ignited volatility has driven a “flight-to-quality” and larger deal sizes in M&A transactions.
Strategics and private equity groups are paying healthy multiples for industry leaders that present
attractive risk-reward opportunities and are immediately additive, e.g. the Boeing-Argon ST transaction.
There still is a scarcity premium for quality deals, both domestically and internationally. European
firms are seeking transactions providing diversification away from Euro zone and currency risks and
attempting to get a stronger foothold in the premier U.S. A&D market. Although the U.S. A&D budget
is flattening with a dim outlook for significant upside in the near future, European A&D budgets are
shrinking substantially faster. Strategics and private equity groups have significant “dry powder” for
acquisitions, and with the cooperation of credit markets, we expect demand and multiples for high-
quality companies to continue to climb in 2H10.
In addition, MCM’s M&A A&D sector themes also remain intact.
Investor sentiment is shifting away from Defense for various
macro reasons, including decreasing war tempo, decreasing
budgetary funding and the lessened need for a large standing
army in modern warfare. We firmly believe certain specific
Defense sub-segments are fundamentally attractive and present
opportunity for consolidation. Defense companies with a strong
strategic position serving asymmetric warfare, cyber security,
high performance materials (e.g. composites), smaller-lighter more lethal forces (e.g. SOCOM), C5ISR
and advanced COTM are receiving adequate and growing funding and remain highly coveted.
Flip the A&D coin and commercial aerospace has moved into favor. Air traffic, freight, capacity and
premium fare statistics have trended upward as we move into the summer “good” months. Per
the IATA, the airline industry will post a $2.5 billion profit in “The airline industry will post
2010, reversing two years of losses. The profit would be the
industry’s first since 2007 and only the third in a decade after a $2.5 billion profit in 2010,
previous results were afflicted by recession, terrorist attacks, reversing two years of losses.
epidemics and wars. “The global economy is recovering from
the depths of the financial crisis much more quickly than could
The profit would be the
have been anticipated,” IATA Chief Executive Officer Giovanni industry’s first since 2007 and
Bisignani said at the organization’s annual meeting in Berlin. only the third in a decade after
“Airlines are benefiting from a strong traffic rebound that is
The MRO recovery has been slow, but is steadily gaining steam
into 2H10. epidemics and wars.”
Page 1
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Market Outlook
Farnborough Airshow to be Positive…but How Positive?

Very upbeat! We expect a flurry of positive news to come out of the AD&G sector when the Farnborough International
Airshow kicks-off on July 19th. The airshow has been a premier forum to announce new contracts, M&A transactions
and key strategic decisions. Farnborough will again be the center of the A&D universe and the eyes of the world
will focus on the amount of positive news generated at the show. In 2008, $88.7 billion worth of business was
announced at the show, compared to the 2006 figure of $42 billion. With uncertainty surrounding global financial
markets and the relative weakness of the Euro, Farnborough will be a
“With uncertainty surrounding indicator of the overall industry’s relative strength. Look for financial
global financial markets and the analysts to key on the amount of business consummated as well as the
growth rate.
relative weakness of the Euro,
Farnborough will be a indicator If Farnborough attendance is a leading indicator, then this year’s show is
setting up to report strong results. With exhibition space sold out early,
of the overall industry’s relative
Farnborough Chief Executive , Shaun Ormrod commented: “We have seen
strength. Look for financial considerable interest in this year’s show with exhibitors attending from
analysts to key on the amount of 38 countries so far. We have sold 166 chalets; 22 International Pavilions -
— including new groups from Morocco, Brazil and Portugal; eight Regional
business consummated as well U.K. Pavilions and all our new ‘first-time-exhibitor’ packages. Over all, we
as the growth rate.” are encouraged that 2010 will be a very buoyant year.”

Farnborough may be the platform for Boeing to announce its decision on whether to redesign or re-engine the 737,
its best-selling aircraft. The company has recently increased production rates from 31.5 to 35 per month. Boeing’s
decision will have long term impacts on the aerospace supplier base and competitive landscape. MCM believes
that Boeing will announce its decision to re-engine at Farnborough. Although many don’t yet see the Bombardier
C-Series as a serious threat, Airbus and Boeing are moving quickly to achieve increased fuel efficiencies on smaller
variants in order to stop the C-Series from infringing on the low end of the high volume narrow-body market.
The re-engine decision would avoid costly and timely next-gen testing and development, yet provide new engines
that promise 10-15 percent fuel cost reduction (fuel was 10 percent of airlines operating costs and now is circa 24
percent). In addition, the decision to re-engine would only cost 20 percent of developing an entirely new aircraft and
would helpfully push back next-gen aircraft redesign cost (internal R&D) by at least five years. Winners from this
decision would include airlines that need replacements that have not yet placed orders, such as United and provide
engine companies with excitement and profit. Where there is excitement and profit, M&A activity usually follows.
MCM expects the engine segment to heat up, pun intended.

Farnborough is also showcasing some significant industry “firsts.”. The first demonstration flight of the new 787
will be held with much anticipation. The ability for the 787 to impress “in the flesh” will be a huge win for Boeing and
the industry. In addition, organizers have secured an agreement, in principle, from the local airport authorities to
allow Unmanned Aircraft Systems (UAS) to be demonstrated as a regular part of the display. This makes absolute
sense due to the proliferation of unmanned systems, which is discussed further laterbelow. The future of aviation
will indeed be on display and both demonstrations will garner intense industry interest.

Cyber Security and ISR – Continue to be Top DoD Priorities

Moving against the grain of decreasing budgetary pressures, the DoD

has identified cyber security as a high-priority that is of the utmost
importance to future defense plans and have signaled that the critical
sectors will receive increased funding. As cyber security continues to
receive outsized funding compared to traditional programs, the sector
has become more attractive for investment and M&A consolidation.

The cyber security sector has seen heightened attention as threats

against the U.S. have accelerated to reach a significant scale. The
top U.S. cyberwarrior Gen. Keith Alexander, head of the newly created U.S. Cyber Command, said Pentagon systems
are “probed by unauthorized users approximately 250,000 times an hour, over six million times a day.”1 Taking
1. Center for Strategic and International Studies.

Page 2
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Market Outlook
into account that this figure does not include any other government agencies, the cyber threat against the U.S. is
enormous and can be arguably categorized as a third war front. Thus, the government continues to fund cyber
security as if it was a war of its own, and primes are taking note.

Primes are shifting business focus to follow the funding. Northrop Grumman took it a step further, not only
shifting its internal priorities (consolidating its Information Technology and Missions Systems units last year which
accounted for $11.1 billion in prime contracts during fiscal 2009), but also its physical location to be closer to the
cyber security mecca in Northern Virginia. Earlier this year, company officials announced they were moving their
headquarters from Los Angeles, where the parent company was founded in 1939, to the Washington, D.C., area.
Northrop Grumman’s internal re-focus and physical relocation reflects the political change in priorities at the White
House and Congress, which are increasingly focusing on national security and cyber security.

In addition, the recently announced Boeing acquisition of Argon ST closely follows the theme of primes aggressively
pursuing growth by expanding into the well-funded ISR sector via acquisition. Boeing’s acquisition of Argon ST for
$34.50 per share, or approximately $775 million, represented a healthy 41 percent premium over Argon’s previous
day’s stock price and was valued at circa 17x TTM EBITDA. The agreement to acquire Argon ST, a leading developer of
command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) and combat
systems, advances Boeing’s growth strategy and expands the company’s capabilities to address the C4ISR, cyber
and intelligence markets. “Combining the strength of Boeing with the experience of Argon ST will significantly
accelerate our capabilities in sensors, communications technologies and information management,” Dennis
Muilenburg, president and chief executive officer of Boeing Defense, Space and Security, said. The acquisition is a
strong signal that Boeing will be aggressively moving its defense business into new markets. Dennis Muilenburg,
chief executive of Boeing’s Integrated Defense Systems also said, “In the next five to ten years, we need to actively
reshape our business to continue to grow.”

In 2Q10, we saw a continued flow of M&A activity in the space. A prime

example would be the $1.1B CGI acquisition of Stanley. CGI, the Canadian-
based information technology and business processing services to civilian,
state, and local, and commercial customers, wanted access to the U.S.
defense and intelligence market. Acquiring Stanley brings scale to that
requirement. CGI highly coveted access to the U.S. DoD market and paid
accordingly. The per share purchase price represents a premium of 23.3
percent over Stanley’s 30-day volume weighted average stock price and
38.3 percent over its 60-day average. The transaction will be funded from CGI’s cash on hand and existing credit
facilities (i.e. “dry powder”). This transaction was also enabled by the strong Canadian dollar, which made the
U.S. a relatively attractive place to buy. This large scale transaction fits with MCM’s thesis (strong sub-segment
fundamentals, area of need, international needing U.S. exposure, healthy multiple funded by dry powder); expect to
see multiple middle-market transactions mirror the CGI-Stanley dynamic over the next 18 months.

The result of the ongoing industry consolidation is that the competition in the government market is going to get
tougher. There will be more deals like this over the next 18 months because as winning new business gets tougher,
acquisitions will be the only real alternative for companies looking to maintain strong growth in the government
market. Strategics are continuously looking to defend current contracts and fill-out existing footprints in the cyber
security land-grab of 2010-2011.

Intelligence, Surveillance and Reconnaissance “ISR” – Convergence of Applications

ISR, on both manned and unmanned platforms, is continuing to garner significant attention in the form of federal
funding for military operations as well as civilian applications. The challenge for the ISR community has been
in the integration of the various technologies and networks utilized across multiple platforms as well as the
resource base available to analyze the overwhelming amount of information captured on a daily basis. Substantial
funding has been put forth to overcome these challenges and perfect and apply what the military is learning to
civilian applications. ISR is so important to future U.S. plans that the President’s Council of Advisors on Science
and Technology is pursuing solutions for the “golden triangle of ISR,”, which includes three legs; information
technology, biotechnology and nanotechnology. The largest and most covered segment remains the proliferation
of UAV technology and utilization.

Page 3
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Market Outlook
While the UAV rate of growth may moderate, UAVs continue to be the most dynamic growth sector of the world
aerospace industry, report Teal analysts in their latest integrated market analysis. Teal Group’s 2010 market study
estimates that UAV spending will more than double over the next decade from current worldwide UAV expenditures
of $4.9 billion annually to $11.5 billion, totaling just over $80 billion in the next ten years. The study suggests that
the U.S. will account for 76 percent of the worldwide RDT&E spending on UAV technology over the next decade, and
about 58 percent of the procurement. “We expect that the sales of UAVs will follow recent patterns of high-tech
arms procurement worldwide, with Europe representing the second largest market, again followed very closely
by Asia-Pacific,” said Zaloga. The 2010 study also includes a UAV Manufacturers Market Overview that reflects the
worldwide UAV market “continuing as one of the hottest areas of growth for defense and aerospace companies,”
said Philip Finnegan, third author of the new Teal Group UAV study. The new study will reflects the rapid growth of
interest in the UAV business by increasing the number of companies covered to almost 30 U.S., European and Israeli
companies, and reflects the fundamental reshaping of the industrial environment.

As often happens, the military’s successful adoption of technology

has spilled over into the commercial sector. In the civil sphere,
the FAA had received 178 applications for UAV Certificates of
Authorization as of Nov. 1, 2009; four months later, that number
had risen to 222, with 166 COAs approved. In FY09, there were
about 20,000 UAV flights in U.S. civilian airspace totaling more than
2,500 hours aloft. There remains to be seen if commercial airspace
usage by UAVs will impact the commercial aerospace contraints.
The Federal Aviation Administration has been asked to issue flying
rights for a range of pilotless planes to carry out civilian and law-enforcement functions but has been hesitant to
act. Specific Civilian uses of UAV’s include border patrol, law enforcement, and homeland security. UAV’s are already
being utilized in some capacities, but the wave of applications is expected to dramatically increase in the years to
come.

Texas Gov. Rick Perry has gained national attention by asking federal “The U.S. will account for
officials and the FAA’s administrator to approve his use of an unmanned
aerial vehicle (UAV) to protect the border from drug and human-smuggling
76 percent of the worldwide
rings originating from Mexico. Currently, six UAVs currently are used along RDT&E spending on UAV
the southern border as part of the country’s SBInet program, said Steven technology over the next
Crowley, U.S. Customs and Border Control (CBC) spokesperson. Initiated
in 2006, SBInet deploys a combination of infrastructure and technology — decade, and about 58 percent
cameras, radars, sensors and towers — along 387 miles of border. The goal of the procurement.”
was to create a virtual fence of wireless technology that would help border
agents detect and visually monitor people as they attempted to cross the border illegally, Crowley said. Specifically,
UAVs are used to fly over an area, gather video-surveillance intelligence and transmit it back to CBC agents. This
example should be replicated across the globe as UAV technologies are mainstreamed to specific commercial
applications. For example, Bombardier recently launched the Crows Nest Anti-Pirate UAV for naval asset protection
against increasing pirate attacks.

On the M&A front, the fragmented UAV technology sector presents a significant investment opportunity. “Smaller
companies can successfully compete against larger players, as AAI Corp., Insitu, General Atomics and AeroVironment
have all shown,” Finnegan said. “Now the prime contractors are buying the successful smaller companies.”2 Advanced
Ceramics, AAI Corp., Insitu and Athena Technologies have all been acquired within the past two years. In addition,
Swift Engineering sold its BAT UAV line to Northrop Grumman. UAV technology and complimentary applications will
remain a hot-bed of M&A technology until the fragmented technologies, sensors and designs become consolidated.

2. “Worldwide UAV Market to Top $80 Billion.” Aviation Today, February 4, 2010.
Page 4
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Current Mandates
Code Name Description Contact
Project Fusion Leading independent provider of C5ISR, information assurance, Paul Weisbrich
network security and systems integration focused on mission 714.330.2056
critical, highly classified technology solutions for government pweisbrich@mcgladreycm.com
agencies.
McGladrey Capital Markets Project Cross Niche engineer and manufacturer of specialized, mission Paul Weisbrich
critical military components catering to over 45 premier 714.330.2056
maintains an exclusive set domestic and international defense programs. pweisbrich@mcgladreycm.com
of current mandates in the Project Green Premier engineering capabilities and product manufacturing Paul Weisbrich
aerospace & defense sector. for advanced material and composite structures used in ISR
applications in the aerospace and defense industry.
714.330.2056
pweisbrich@mcgladreycm.com

Project Echo Product and system compliance testing provider offering a full Paul Weisbrich
If you have any questions range of testing services, to the aerospace, defense, wireless, 714.330.2056
medical, consumer automotive and industrial markets. pweisbrich@mcgladreycm.com
or would like additional
Project Frame C5ISR technology and service provider enabling high-speed Paul Weisbrich
information on any of the data transmission and advanced COTM. 714.330.2056
companies listed, please contact pweisbrich@mcgladreycm.com

the appropriate Aerospace & Project Iliad Premier manufacturer of high quality production tooling for the Paul Weisbrich
aerospace and defense industry. The company is a key supplier 714.330.2056
Defense Group professional. to the F-35 and other leading programs. pweisbrich@mcgladreycm.com

Project Hot Rod Provider of large geometry, complex shaped, precision Paul Weisbrich
machined soft and hard metal structures to the aerospace 714.330.2056
industry. pweisbrich@mcgladreycm.com

Project Satine Rapidly growing provider of inspection, verification, testing Paul Weisbrich
and certification services to top tier aerospace and defense 714.330.2056
companies. pweisbrich@mcgladreycm.com

Project Centric Design and manufacturing of advanced communication systems Paul Weisbrich
for U.S. and foreign militaries. 714.330.2056
pweisbrich@mcgladreycm.com

. .
Mergers Acquisitions Divestitures . Capital Raising
.
Fairness Opinions Recapitalizations . Restructurings
.
Costa Mesa Chicago London .
.
888.900.0411 www.mcgladreycm.com

Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC

Page 5
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Recent Transactions
Transaction Details
Closed Target Target Description Acquirer Value ($mm)
Pending Argon ST A leading developer of command, control, Boeing $775.0
communications, computers, combat systems,
intelligence, surveillance, and reconnaissance
(C5ISR).

To the right is a list of recent Pending Kroll, Inc. A leading risk consulting company, provides a Providence Equity $1,130.0
broad range of investigative, intelligence, financial, Partners [Altegrity
transactions within the security and technology services to help clients Inc.]
reduce risks, solve problems and capitalize on
aerospace & defense sector, opportunities.

including valuation information Pending Allied Defense

Group, Inc., The
Allied Defense Group (ADG) has two operating
subsidiaries - Mecar S.A. and Mecar USA, Inc. Mecar
Chemring Group plc $69.6

S.A. is a manufacturer of medium and large calibre

where available. ammunition. Mecar USA provides load, assemble
and pack and procurement services for the US
Government and prime contractors.

To discuss these or other Pending Saint-Gobain The Advanced Ceramics business held by Saint- CoorsTek, Inc. $245.0
Advanced Gobain Ceramic Materials, a leading global supplier
transactions in your industry, Ceramics of materials and components made from ceramics,
grains, and powders.
please contact us. Pending EF Johnson Develops and markets secure communications Francisco Partners $40.2
Technologies, Inc. solutions to first responders in public safety
and public service, the federal government, and
industrial organizations.
Pending TechTeam Information technology (IT) solutions company Jacobs Engineering $59.0
Government that provides support to federal, state and local Group, Inc.
Solutions, Inc. government agencies, including the United States
(TTGSI) Department of Homeland Security, U.S. Army and
U.S. Army Corps of Engineers.

Pending Intelek plc A group of companies which primarily designs and Teledyne $51.9
manufactures electronic systems for satellite and Technologies, Inc.
microwave communication. The company's skills
include microwave frequency design, digital signal
processing, thermal modeling, and microwave
circuit processing and sub-assembly.

Pending Stonewood Group Designs, manufactures and delivers data at rest ViaSat, Inc. $20.0
Ltd encryption products and services. Stonewood
products are used to encrypt data on computer
hard drives so that a lost or stolen laptop does not
result in the compromise of classified information
or the loss of intellectual property.

Pending Cantwell Cullen & Manufacturer of protected wire harnesses, Groupe Zodiac S.A. NA
Co., Inc. electrical assemblies and hydraulic hoses for
aerospace, defense, and industrial applications.

Pending Atlantic Marine Vessel maintenance, repair, overhaul and BAE Systems plc $352.0
Holding Co. conversion (MROC), marine fabrication, and ship
construction services provider.

Pending Stanley, Inc. Provider of information technology services and CGI Group, Inc. $1,070.0
solutions to U.S. defense, intelligence and federal
civilian government agencies.

. .
Mergers Acquisitions Divestitures . Capital Raising Pending CPI International, Provider of microwave, radio frequency, power Comtech $472.3
.
Fairness Opinions Recapitalizations . Restructurings Inc. and control solutions for critical defense, Telecommunications
.
Costa Mesa Chicago London . communications, medical, scientific and other
applications.
Corp.

.
888.900.0411 www.mcgladreycm.com
Pending Hybricon Corp. Designs and manufactures custom and standards- Curtiss-Wright Corp. $19.0
based enclosures and electronic backplanes for
Member FINRA. defense and commercial applications, and provides
International mandates are handled by or in conjunction with McGladrey electronic subsystem integration expertise.
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe Pending Raymarine Raymarine is a world leader in the supply of FLIR Systems, Inc. $180.0
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC
Holdings Limited electronic products for the recreational and light
commercial marine markets.

Source: Capital IQ, Mergerstat, Mergermarket and McGladrey Capital Markets Page 6
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Recent Transactions
Continued...

Transaction Details
Closed Target Target Description Acquirer Value ($mm)
Pending CapRock Global provider of mission-critical managed Harris Corp. $525.0
Communications, satellite communications solutions for the energy,
Inc. government and maritime industries.
To the right is a list of recent Pending SignaCert, Inc. Provider of end-to-end and partner-based IT Harris Corp. NA

transactions within the compliance solutions based on known-provenance

whitelist technology. These methods allow
SignaCert's direct customers to rapidly achieve and
aerospace & defense sector, prove continuous compliance for the systems that
deliver critical business services.
including valuation information
Pending Sperian Designer and manufacturer of personal protective Honeywell $1,400.0
where available. Protection equipment (PPE) focused on international markets. International, Inc.

Pending Simrad Optronics Global supplier of components for remote control Rheinmetall AG $96.0
ASA weapon stations; electro-optical instruments; and
To discuss these or other weapon system upgrades.

Pending Aeroflex Holding Provider of microelectronic components and test public $500.0
transactions in your industry, Corp. and measurement equipment used by companies in
the space, avionics, defense, commercial wireless
please contact us. communications, medical and other markets.

Pending DynCorp Global government services provider in support of Cerberus Capital $1,500.0
International, Inc. U.S. national security and foreign policy objectives, Management, L.P.
delivering support solutions for defense, diplomacy,
and international development.

June MTI PolyFab, Inc. Designs and manufactures a light-weight thermal 3M Co. $24.8
and acoustic insulation system for a wide variety of
aerospace customers to address unwanted airborne
and structure-borne noise in aircraft.

June Safe Harbor Supplier of customized hardware and software for Cubic Corp. NA
Holdings, Inc. cyber solutions. The company provides specialized
cyber security and networking infrastructure
solutions.

June Specialist Designs and manufactures rugged, security Curtiss-Wright Corp. $22.0
Electronics encrypted data recorders, processors, display
Services, Ltd. media and software for aerospace and defense
(SES) applications.

June Secure Data, Inc. Provides information technology and program Emtec, Inc. NA
(SDI) management services to address critical issues
affecting government, public, and private sectors.

June Kylmar (KMC) Designs and manufactures sensor and optical General Dynamics NA
Limited surveillance systems for military and security Corp.
applications.

June Crompton Designer and manufacturer of advanced carbon Goodrich Corp. NA

Technology fiber composite products for the aerospace, defense,
Group, Ltd. (CTG) advanced vehicle and clean energy markets.

June Enpro Engineered Supplier of custom designed and manufactured The Jordan Company NA
Products, Inc. components for the commercial aircraft industry, [Reinhold Industries,
including a line of proprietary headrests, footrests, Inc.]
. .
Mergers Acquisitions Divestitures . Capital Raising armrests and other seating mechanisms and
.
Fairness Opinions Recapitalizations . Restructurings assemblies.

.
Costa Mesa Chicago London . June Memex
Technology Ltd.
Provider of intelligence management solutions that
help improve intelligence processes, enhance public
SAS Institute, Inc. NA

.
888.900.0411 www.mcgladreycm.com safety, and prevent and deter crime, terrorism and
other threats. The company has a strong presence
in the law enforcement and homeland security
Member FINRA. markets.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC
Source: Capital IQ, Mergerstat, Mergermarket and McGladrey Capital Markets

Page 7
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Recent Transactions
Continued...

Transaction Details
Closed Target Target Description Acquirer Value ($mm)
June Sage Designs and manufactures custom RF and microwave Spectrum Control, $6.5
Laboratories, Inc. components and subsystems including filters, Inc.
diplexers, multiplexers, hybrids, and digital frequency
To the right is a list of recent discriminators.

transactions within the June Optimum Optical

Systems, Inc.
Designer and manufacturer of custom optics and
optomechanical assemblies. Optimum Optical's
Teledyne
Technologies, Inc.
NA

products are primarily used in tactical military

aerospace & defense sector, imaging systems found on a variety of defense
platforms, including a number of small UAV systems.
including valuation information
June MillenWorks, Inc. Designs and produces light tactical, unmanned Textron, Inc. NA
where available. ground, armored and off-road vehicles and
subsystems for demanding on-road and off-road
applications.

To discuss these or other June Vought Aircraft

Industries, Inc.
Global manufacturer of aerostructures for
commercial, military and business jet aircraft.
Triumph Group, Inc. $1,440.0

transactions in your industry, June TransTech Distributor of access control and authentication Visualant, Inc. NA

please contact us.

Systems, Inc. systems serving the security and law enforcement
markets.

May AP Labs Group Leading system integrator in the areas of defense Kontron AG NA
and aerospace.

May Impeva Labs, Inc. Provides continuous global asset and item-level Cubic Corp. NA
visibility (tracking, monitoring and security) using
redundant global communications, advanced mesh
networking and a myriad of sensors.

May Accura Technics, Manufacturer of high-precision grinding and EDAC Technologies $0.3
LLC machining systems, specializing in computer Corp.
numerical control (CNC) grinding systems used in the
manufacturing of precisely engineered parts for a
wide variety of applications.
May Azimuth Engaged in the development and sale of products for Elbit Systems, Ltd. $44.9
Technologies Ltd. target acquisition, navigation and orientation for the
[19.48%] defense market.

May EBV Explosives Industry leader in demilitarization, incineration General Dynamics NA

Environmental Co. and disposal of munitions, explosives and explosive Corp.
wastes.

May Gichner Systems Designs, engineers, manufactures and integrates Kratos Defense & $133.0
Group, Inc. tactical and other shelters, products, solutions, Security Solutions,
modular containers, subsystems and support Inc.
equipment for the U.S. military, its allies, and leading
defense prime contractors.

May Pieper GmbH Manufacturer of video products and integrated Moog, Inc. NA
vision systems for security and extreme industrial
environments.

May ExelTech Operates hangars in Montreal and Quebec City where Pemco World Air NA
Aerospace Inc. it offers comprehensive repair services to operators Services, Inc.
. .
Mergers Acquisitions Divestitures . Capital Raising of Embraer E-Jets and 135/145s, Bombardier CRJ,
.
Fairness Opinions Recapitalizations . Restructurings Q-series, Dash 8, ATR, and Saab regional aircraft.

.
Costa Mesa Chicago London . May Veratect Corp. Provides disease risk situational awareness SPADAC, Inc. NA
.
888.900.0411 www.mcgladreycm.com capabilities to corporations, insurers, government,
and NGO clients.

Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the Source: Capital IQ, Mergerstat, Mergermarket and McGladrey Capital Markets
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC

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 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Recent Transactions
Continued...

Transaction Details
Closed Target Target Description Acquirer Value ($mm)
May Pittsburgh Specializes in complex metal joining and Thermacore, Inc. NA
Materials the development, fabrication, testing, and
Technology, Inc. characterization of high-temperature metallic
To the right is a list of recent (PMTI) alloys and other specialty materials for a variety of
applications in the aerospace, military and industrial
transactions within the markets.

aerospace & defense sector, May Quality

Performance, Inc.
Sells products made by international companies to
government and commercial customers in the United
Vought Defense
Systems Corp.
NA

including valuation information (QPI) States. The company also provides life cycle product
support services including maintenance services for
its products.
where available.
April Aviation Provider of expeditionary airlift services and aircraft AAR Corp. $200.0
Worldwide modifications to the U.S. and other government
Services (AWS) customers.
To discuss these or other
April Blackhawk Blackhawk provides a comprehensive portfolio of Alliant Techsystems, NA
transactions in your industry, Industries industry-leading, high quality, tactical gear. Inc. (ATK)
Products Group
please contact us. Unlimited, LLC

April Seismic LLC Specializes in cyber security solutions, software Applied Signal $25.0
engineering, data management, and systems Technology, Inc.
engineering and integration services for the U.S.
Department of Defense and Intelligence Community.

April Dynamac Dynamac International, Inc. is a professional services Consolidated Safety NA

International, Inc. firms primarily supporting the government sector. Services, Inc. (CSS)

April Eagle Tool & Eagle Tool & Machine (based in Springfield, Ohio) and Heroux-Devtek, Inc. NA
Machine Co., E-2 Precision Products (based in Cleveland, Ohio) are
E-2 Precision manufacturers of precision machined components
Products for the aerospace industry.

April Sophia Wireless, Offers component and system configurations that Integral Systems, Inc. $2.5
Inc. satisfy the requirements of diverse markets such as
satellite communications, broadcast and radar.

April Retica Systems, Developer of iris-on-the-move and iris-at--a-distance L-1 Identity Solutions, NA
Inc. product inventory, algorithms and software. Inc.

April Insight Develops and manufactures mission critical night L-3 Communications $613.0
Technology, Inc. vision and electro-optical equipment including laser Corp.
aiming and illumination devices, laser rangefinders,
laser markers and designators, night vision goggles
and monoculars, and thermal imaging systems.

April General Dynamics General Dynamics Advanced Information Systems Orbital Sciences $55.0
Corp. [spacecraft (including a predecessor company, Spectrum Astro, Corp.
business] Inc.) has developed and built 15 small- and medium-
class satellites for the U.S. Air Force, NASA, U.S. Navy,
. .
Mergers Acquisitions Divestitures . Capital Raising Missile Defense Agency (MDA), and other government
.
Fairness Opinions Recapitalizations . Restructurings and commercial customers.

.
Costa Mesa Chicago London . April Verseidag
Ballistic
Supplier of civilian and military protection
technology.
Rheinmetall Group NA

.
888.900.0411 www.mcgladreycm.com Protection GmbH

April Atlantis Systems Global supplier of simulation-based training ComVest Capital, LLC; NA
Member FINRA. Corp. [80%] systems and performance support products for the CEO Capital Corp.
International mandates are handled by or in conjunction with McGladrey commercial aviation industry and the international
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
defense and maritime systems market.
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC
Source: Capital IQ, Mergerstat, Mergermarket and McGladrey Capital Markets

Page 9
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Industry Experience
Tulsa, Oklahoma
has been acquired by Downers Grove, Illinois
Tukwila, Washington
a portfolio company of
has been acquired by

Interacting with industry leaders

Santa Ana, California Southfield, Michigan

a portfolio company of has been acquired by

on a daily basis enables our (NYSE: CSL)

Greenwich, Connecticut Charlotte, North Carolina
Aerospace & Defense Group Hampshire, United Kingdom

bankers to stay in front of key

trends and market shifts.
PercepTek, Inc.
Littleton, Colorado
Tailored Logistics Corporation
Fort Wayne, Indiana
Moreover, we enjoy solid, has been acquired by

has been acquired by

trust-based relationships with
top players in the aerospace
Lockheed Martin Corporation
(NYSE: LMT)
Bethesda, Maryland UMECO plc
& defense sector, including Warwickshire, United Kingdom

decision makers at major

corporations, financial West Midlands, United Kingdom
has acquired

institutions and private equity Boonton, New Jersey

Irvine, California

groups. from
has been acquired by

a private equity fund managed by

For more information about Hammond, Kennedy, Whitney & Company, Inc.
New York, New York
and Management and certain affiliates of
New York, New York
these or other McGladrey Tonka Bay Equity Partners LLC
Centerfield Capital Partners, L.P.

Capital Markets transactions,

please contact us.
West Midlands, United Kingdom
Wichita, KS
has acquired
has been acquired by
has been acquired by
Grand Prairie, Texas
from

Wayne, PA
Bethesda, Maryland

. .
Mergers Acquisitions Divestitures . Capital Raising
.
Fairness Opinions Recapitalizations . Restructurings Hampson Industries PLC Oakdale, PA
.
Costa Mesa Chicago London . West Midlands, United Kingdom

.
888.900.0411 www.mcgladreycm.com has acquired has been acquired by
has been acquired by a
Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe Private Investment Group Wayne, PA
Ltd (authorized and regulated by the Financial Services Authority).
Covina, California
©2010 McGladrey Capital Markets LLC

Page 10
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Upcoming Events
Farnborough International Airshow
July 19-25
UK
www.farnborough.com

In this section we list upcoming Unmanned Systems Exhibition

industry events that might be of
August 24-27
interest to you. Denver
symposium.auvsi.org

To find out more about upcoming

events, click on the links. AFA Air and Space Conference
September 13-15
Seattle
www.afa.org

Modern Day Marine

September 28-30
Quantico, Va.
www.marinemilitaryexpos.com

SAMPE Fall Technical Conference 2010

October 12-13
Salt Lake City, Utah
www.sampe.org

NBAA

October 19-21
Atlanta
www.nbaa.org

AUSA

October 25-27
. .
Mergers Acquisitions Divestitures . Capital Raising Washington
.
Fairness Opinions Recapitalizations . Restructurings www.ausa.org
.
Costa Mesa Chicago London .
.
888.900.0411 www.mcgladreycm.com

Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC

Page 11
 July 2010
AEROSPACE, DEFENSE AND GOVERNMENT SERVICES GROUP

Industry Professionals
Paul T. Weisbrich
Senior Managing Director
714.327.8680
pweisbrich@mcgladreycm.com

Mr. Weisbrich possesses well over two decades of investment banking and
corporate finance experience on behalf of middle market and public companies,
Having experienced investment with a particular emphasis on cross-border transactions. Prior to joining
bankers help you navigate McGladrey Capital Markets, Mr. Weisbrich was a managing director in the mergers
and acquisitions groups at Banc of America Securities, where he co-founded its
through the intricacies of a Los Angeles M&A Group on a “green field” basis. He previously was a managing
complex transaction can pay director at Montgomery Securities and an M&A principal at Robertson Stephens.

huge dividends. Mr. Weisbrich has advised more than 350 companies and led the closing of over
$6 billion in transactions spanning five continents. He has served on the board of
several middle-market companies and was a member of the Loyola Marymount
Our clients and professionals in National Alumni Board of Directors for three years. Mr. Weisbrich is a recognized
expert in M&A and frequent lecturer on investment banking topics in North
the M&A community know and
America and Europe, and has been an adjunct professor on M&A topics at the
trust us for our in-depth industry University of Southern California’s Marshall School of Business Executive MBA
program for 19 years.
knowledge, global capabilities,
seasoned leadership and He received a bachelor’s degree in business from Loyola Marymount University,
a master’s degree in business administration from the University of Southern
middle-market focus. California, and studied abroad at Schiller International University in Heidelberg,
Germany. Mr. Weisbrich holds FINRA Series 7, 63, 24 and 79 securities licenses.

Let experience be your guide.

Contact McGladrey Capital
Erik G. Choy
Markets today. Vice President
714.327.8831
echoy@mcgladreycm.com

Prior to joining McGladrey Capital Markets, Mr. Choy served as an associate in

the industrials group at Dresdner Kleinwort Wasserstein, where he executed
merger and acquisition transactions for global diversified industrial and
logistics companies. Prior to DrKW, Mr. Choy raised a variety of public and private
placements of debt and equity at Gruntal & Co., LLC, where he covered the media,
telecommunication and technology sectors.

Mr Choy received a bachelor’s degree in political science from the University of

California, Los Angeles and a master’s in business administration in finance and
accounting from the New York University’s Stern School of Business. He holds
FINRA Series 7, 63 and 79 securities licenses.
. .
Mergers Acquisitions Divestitures . Capital Raising
.
Fairness Opinions Recapitalizations . Restructurings
.
Costa Mesa Chicago London .
.
888.900.0411 www.mcgladreycm.com

Member FINRA.
International mandates are handled by or in conjunction with McGladrey
Capital Markets Canada Inc. (limited market dealer registered with the
Ontario Securities Commission) or McGladrey Capital Markets Europe
Ltd (authorized and regulated by the Financial Services Authority).
©2010 McGladrey Capital Markets LLC

Page 12