Alan Dron

At last September's Farnborough air show, Frank Lanza, chairman and chief executive officer of New York-based L-3 Communications, predicted that US second- and third-tier companies in L-3's market sector would go through the same consolidation process that has swept through the top rank of that nation's aerospace industry.

His company has being doing its best to make that prediction come true, by embarking on a wave of takeovers that has seen no fewer than six companies swallowed by L-3 in the past year.

This rapid expansion was reflected in its 1998 financial results, which broke through the $1 billion turnover mark, compared with pro forma sales of just over $700 million for 1997.

Not bad for a company that was created just two years ago from business units of Lockheed Martin and Loral, and whose interests include secure communications systems, avionics, telemetry and instrumentation.

And, according to chairman and chief executive officer Frank Lanza, L-3's acquisitive habit is likely to continue.

Reviewing

"We have a list of 15 to 17 companies that we are continuously actively reviewing. Five or six of those are into phases two or three, meaning that we've gone into the initial due diligence process and are seriously looking at them. It's hard to say if acquisitions are imminent, but a lot of them are in the pipeline.

"We have a strategy to grow eight to 10% internally and an additional 10% via acquisitions. Part of our strategy is to consolidate the products industry in the USA, which is pretty much fragmented."

L-3 is exhibiting a broad spread of products at the Paris show to demonstrate its capabilities, says Lanza. These range from secure datalinks for Unmanned Air Vehicles (UAVs) to anti-submarine warfare systems such as dipping sonar, and the Salon's visitors can expect announcements on new products.

Among new systems is a tactical, solid-state recorder to replace earlier-generation mechanical versions in reconnaissance platforms. This weighs 30lb (13kg), around one-third of its predecessors, and is capable of gathering data from a variety of sensors, including electro-optical and synthetic aperture radars.

It is too early for much feedback from the Kosovo campaign on the performance of electronic systems, says Lanza: "Lessons were learned in Desert Storm in regard to having an 'Internet of the sky', in being able to get information back in real time.

The DoD has developed very secure, high data-rate systems for getting information back and that's working very well in Kosovo.

Source: Flight Daily News