Hunter Ingalls Industries, Inc. (NYSE: HII), a manufacturer of defense shipbuilding equipment, acquired Alion Science and Technology. It is a valuable acquisition of a suite of services used by the US Defense Department and other organizations.
Hunter Ingalls Industries, Inc. (HII) has purchased Alion Science and Technology for $1.65 billion in cash from Veritas Capital. The deal is expected to close in the second half of 2021 and will significantly boost Huntington Ingalls’ cash flow next year. The profitability is expected to improve in 2023.
Most importantly, Huntington Ingalls will, however, receive valuable cybersecurity and electronic warfare technologies. These include artificial intelligence tools for situational awareness, electronic reconnaissance software, equipment control on the battlefield, and more.
Thus, Huntington Ingalls’ portfolio of solutions will be expanded to include technologies in the most promising fields of military science. It is an opportunity for Huntington Ingalls to integrate electronic warfare technologies into their equipment, which increases potential profitability significantly.
The main segment is shipbuilding. The share of onboard electronics and software in the cost of warships is growing, and the profitability of such systems is higher than that of hull assembly itself, which is resource-intensive.
Additionally, the company can submit applications for new contracts with fewer requirements and low competition due to the complex nature of military electronics.
Hunter Ingalls Industries, Inc. (NYSE: HII) share price declined 2.91% to $205.86 in the last trading session on Tuesday. The company’s market capitalization reached $8.29 billion.