How Vertex Aerospace drew the next path
Tow the former Raytheon service unit
Vertex Aerospace is 44 years old and at various times in its history is an independent company, a business unit within another large defense market player, and has recently returned to an independent company.
Three years ago, private-equity fund American Industrial Partners acquired Vertex Aerospace. $ 550 million from L3 Technologies.. The latter company, of course, has begun its path to finally shape the current L3 Harris Technologies.
Raytheon once owned Vertex until private equity firm Veritas Capital acquired a majority ownership of Vertex in 2001.
All of these changes mean that Vertex CEO Ed Boyington appreciates the difference between business and enterprise. “Believe me. If I didn’t know before, I do know now,” he told me.
According to Boynton, the transition included signing a series of post-transaction service contracts with L3, including IT features and other back office support needed to run the business.
“But after signing these service contracts and becoming truly our own, we found that we were much more competitive and focused. Everything we do is a service of our business. We are focused on the support aspect, “says Boynton.
Support means all aspects of aircraft technical support, supply chain management, and assembly and engineering solutions for government agencies and other customers in a particular commercial market.
Headquartered in Madison, Mississippi, Vertex recorded revenue of $ 739 million in its most recent fiscal year, ending June 30, according to credit rating agency Moody’s Investors Service.
Like all previous parents, Moody’s analysts said in an analysis that Vertex rebuilt its own portfolio last year through the manufacture of aerospace and the sale of its assets.
This year’s Vertex was ironically discovered as it went out to complete its first acquisition with the help of AIP. Another carved business at Raytheon’s Global Training and Logistics UnitLast year it recorded sales of nearly $ 1 billion.
The business included Raytheon’s defense training, professional services, modernization and maintenance, and the self-proclaimed “mission-critical solutions” business line.
With this transaction, according to Boynton, Vertex has achieved the scale it felt needed to achieve portfolio diversity and competitiveness in neighboring markets.
An example of a new scaffold can be found in training. Here, Vertex has historically focused its sequence of work on its employees working on aircraft maintenance and preparation programs.
“We have never really been directly involved in the curriculum and the actual training itself,” Boynton said of direct customer training.
Training is also an important example of a domain increasingly defined by technology, given that the military is moving to more live, virtual and constructive programs with virtual reality.
Vertex clearly doesn’t place too much emphasis on the aforementioned LVC or VR technology, but Boyington is a user of these tools alongside government customers to enable these realistic training environments. I admitted.
“Even in our core business (pre-acquisition), we make a modest investment in virtual reality to encourage young men or women to participate in the program and accelerate their knowledge base,” said Boynton. “That’s where we really focus now.”
Logistics is the second area where Vertex is constantly trying to focus on more software and technical tools. This is especially true when considering the large amount of data that all government agencies, especially military services, have in their territory.
Predictive maintenance of aerial platforms was one major aspect of logistics that Boynton told me that he was ripe for more use of the software. The same is true for the inventory and resupply of aircraft parts maintained by Vertex, Boyington said, which controls the supply chain.
How Vertex searches for technology tools to inject into its core business can also help explain the strategies of both that company and such other companies in a broad defense services perspective. Always look for the added value of that technology on top of the core.
“If you try to develop it yourself or customize it for yourself, you’ll be hostage and old,” says Boynton. “This technology is built into many of these commercial tools and we just take advantage of it.”
As an example, you can see how Vertex has seen Microsoft’s Azure cloud environment with machine learning and virtual learning capabilities and some analytics tools. But more searches are always on.
“So, as they changed, we got enough flexibility,” he said.
https://washingtontechnology.com/articles/2021/10/14/vertex-aerospace-inside-strategy.aspx How Vertex Aerospace envisioned the next path-Washington Technology