London bridgehead raises L-3’s international profile

Farnborough Air Show » 2006
November 15, 2006, 7:39 AM

The opening last year of L-3 Communications’ new office in London represented a significant bridgehead in the defense electronics and communications group’s campaign to expand its international footprint. Having a permanent presence in the UK capital has helped L-3 (Hall 4 Stand A14) to partner with the Qinetiq group to jointly bid for the multi-staged Helix program to upgrade the mission suite of the Royal Air Force’s Nimrod R1 electronic reconnaissance system. The £380 million ($700 million) program is in its second phase of competitive assessment and a down-select of bidders is pending.

In the nine short years since L-3 was formed in 1997, the New York-based group has grown rapidly and largely through acquisitions, including seven non-U.S. firms. But the sudden death on June 6 of its founder and CEO Frank Lanza has prompted speculation in the financial community that L-3 could itself become the target of a takeover bid by a defense giant such as BAE Systems (which has made no secret of its desire to expand into the U.S. military market).

L-3 has made no comment on such speculation and speaking with Aviation International News prior to the Farnborough International show, interim CEO Michael Strianese said the L-3 board will keep it on the acquisitions trail and continue its high levels of research and development (R&D) investment. “Our strategy of the past nine years will continue,” he said, indicating that it intends to further extend its capability in the following fields: sensors (electro-optical/infrared/nuclear, biological and chemical); unmanned vehicles (air, land and sea); miniaturized datalinks; and laser communications.

By the end of this month L-3 expects to complete the acquisition of the UK’s TRL Electronics, which specializes in radio and satellite communications systems for electronics countermeasures. Other recent international additions to the group include Britain’s Advanced System Architectures, which from its headquarters near Farnborough produces multi-sensor fusion and tracking systems for both aircraft and missiles.

Current R&D priorities include work on next-generation encryption for military communications and very high speed modems for future intelligence, surveillance and reconnaissance platforms. “The increased number of sensors [in the battlefield] is increasing the amount of data generated and this requires bigger [datalink] pipelines and the ability to prioritize data and aid targeting,” explained Strianese, who is an accountant by background and continues to serve as L-3’s CFO.

Another opportunity for L-3 is to develop lightweight sensors for the new wave of micro UAVs. The company provides data and video links for the existing, larger operational UAVs, such as the Northrop Grumman Global Hawk and General Atomics Predator.

The recent acquisitions of trace detection specialist CyTerra and millimeter wave expert SafeView are contributing significantly to L-3’s work on a next generation airport passenger screening system that promises faster and more reliable detection. It is currently building the system prototype and L-3 wants to start testing it at a U.S. airport this fall.

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