WASHINGTON General Dynamics Corp (GD.N) on Monday announced its second acquisition in a week, moves the company said were aimed at expanding its portfolio and keeping its offerings relevant.
General Dynamics on Monday said it had acquired the defense operations of Gayston Corp, a privately held company that supplies precision metal components used in munitions programs, such as the Hydra-70 rocket for military helicopters.
It said the deal was a cash transaction but did not disclose anything else other than to say it would be accretive to earnings in 2013. Gayston's defense operations employ 187 people at a state-of-the-art facility in Springboro, Ohio, where the company makes rocket motor tubes and other aluminum parts.
Michael Mulligan, president of General Dynamics Armament and Technical Products division, said the acquisition would expand the company's ability to produce high-precision parts in large quantities for lower cost.
Last week, General Dynamics said it was acquiring Fidelis Security Systems Inc, a cybersecurity company that employs about 70 people in Maryland and Massachusetts to provide real-time network visibility, analysis and control. The value of the cash transaction was not disclosed.
"By acquiring companies that enhance our capabilities or open doors to new customers, we are able to expand our portfolio and maintain the relevancy of our offerings," said General Dynamics spokesman Rob Doolittle.
Defense consultant Jim McAleese said General Dynamics was pursuing an aggressive acquisition strategy to help it expand revenue after disappointing second-quarter results.
Most other big companies in the defense sector have put their acquisition plans on hold until the budget outlook for 2013 becomes clearer, but General Dynamics has "a much more immediate requirement," McAleese said.
"In the short term it will counteract the revenue contraction that they're seeing in the information systems and technology sector," he said, noting that the company also faced weaker demand from the U.S. Army due to the end of the war in Iraq and the drawdown of U.S. troops in Afghanistan.
General Dynamics shares closed 0.7 percent, or 47 cents, lower at $65.62 on the New York Stock Exchange on Monday. The company's shares are trading below a year high of $74.49 reached in April.
(Reporting By Andrea Shalal-Esa; Editing by Steve Orlofsky)