Defense Business Brief: What to watch for in 2023; $10B in M&A announced; NGA launches new recruiting effort; and more.

The end of 2022 might be in sight, but we’re not done yet on the mergers and acquisitions front. On Friday, private equity firm Advent International announced it had entered a $6.4 billion deal to take satellite image provider Maxar private, and today L3Harris Technologies announced it has a $4.7 billion deal to acquire Aerojet Rocketdyne.

Aside from the $300 million higher price tag, a key difference between the L3Harris deal and the Lockheed Martin deal to acquire Aerojet, which the FTC moved to block: a sizable break-up fee. If regulators don’t approve the deal this time around, L3Harris would have to pay Aerojet $406.3 million. H/T to my Washington Technology colleague Ross Wilkers for passing this along.

Kubasik was talking about the deal on CNBC this morning. You can watch it here.

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Subscriber note: There will be no Defense Business Brief next week as it’s a federal holiday. We’ll be back in your inbox on Tuesday, Jan. 3.

That said, Congress still needs to pass a spending measure so the government doesn’t shut down on Friday. We’ll hopefully see soon—probably right after this newsletter drops in your inbox—text of an omnibus spending bill that, if approved, would fund the government through Sept. 30, 2023.

President Biden will sign the already-passed 2023 National Defense Authorization Act, White Press Secretary Karine Jean-Pierre told reporters on Monday. The bill OKs $45 billion in spending beyond the White House’s ask and also repeals the coronavirus vaccine mandate for troops.

Assuming we have a budget deal before Christmas, 2023 might bring a lot of the same issues that defense companies dealt with in 2022. 

• At the top of every CEO concern list: workforce, supply chain, and inflation issues.
• The Pentagon, and U.S. allies, must resupply weapon stockpiles sent to Ukraine to defend against the Russian invasion.
• The Biden administration’s next defense budget proposal, which is supposed to head to Congress in February, is expected to continue the focus on competition with China.
• Speaking of Congress, Democrats still control the Senate, but Republicans control the House, which will likely ignite debate over already record-high defense spending levels.

Bonus: I spoke about what to watch for in 2023 on the Government Matters TV show this week, which you can watch here.

As mentioned above, we’ve written a ton about companies trying to attract engineers and skilled workers. The U.S. government is making an effort as well. From Defense One Senior Editor Lauren Williams: The Pentagon’s lead satellite imagery agency is looking to recruit high schoolers for its new internship program.

The National Geospatial-Intelligence Agency is “taking a look at various unique ways of bringing people into their agency, finding ways to develop a workforce,” said Mark Chatelain, the agency’s associate chief information officer for the agency’s CIO and IT services directorate at the DoDIIS conference last week. “So we're actually starting an intern program, both in the Washington DC area, as well as in the St. Louis area for high school students.”

Chatelain said the students come into the agency, “go through the clearance process, and then they have an actual meaningful job that they promote throughout the summer. They get paid, they learn what the agency is all about and receive training.”

NGA has had an internship program for college students that had a path to a full-time job if they did well, but recruiting high school students is a way for the agency to “dig a little bit deeper” when it comes to workforce development.

Making Moves

Former Boeing executive Mark Cherry has been named CEO of Align Precision Corp, a maker of “components and assemblies for critical applications in the aerospace, defense, semiconductor, and evolving high-tech industries.”