Zacks_Analysts' Blog : Goodrich Teams Up with KNK - Analyst Blog

Goodrich Corporation (GR) has signed a teaming agreement with UK-based Knowledge Network Konsulting (“KNK”) Ltd. 

KNK Ltd, based in Andover, UK, provides intelligence and decision support applications. This agreement will enable Goodrich to collaborate with KNK in developing effective and comprehensive solutions to meet future intelligence, surveillance and reconnaissance (“ISR”) requirements of worldwide defense forces.

Goodrich is a global provider of proven intelligence exploitation systems for the military while KNK is innovative in providing intelligence management and decision support software. The integration of the two companies' software capabilities brings together the expertise required to develop ISR solutions that offer: requirements generation and tasking; collection and fusion of information from multiple sources; and assessed decision-support outputs.  These solutions are fully compliant with both NATO and Coalition Shared Database (“CSD”) standards.

Goodrich is a global supplier of components and systems for communications and avionics. Most of the company’s products are sold to government and commercial customers that generate higher volume sales and create economies of scale, thus helping in winning more cost-sensitive government contracts. The company also provides equipment for this niche market.

The bullish outlook for Goodrich is supported by its geographically diverse customer mix, its wide presence in the commercial and business jets market, resurgence in commercial aftermarket sales, a strong balance sheet, an incremental dividend and an ongoing share repurchase program.

Earlier, in September 2011, United Technologies Corp. (UTX) announced that it would acquire Goodrich for $18.4 billion, including the assumption of $1.9 billion in debt. The deal is expected to close in mid-2012.

Based in Charlotte, North Carolina, Goodrich Corporation supplies components, systems and services to the commercial, regional, business and general aviation markets in the U.S. and other parts of the world. Goodrich also supplies aircraft and satellite systems to the global military and space markets. Goodrich’s products and services are principally sold to customers in North America, Europe and Asia.

Goodrich presently retains a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock. The cautious stance stems from the uncertainty in the recovery of the large commercial airplane original equipment market, along with possible defense cutbacks, dependence on international sales, high research and development overheads and regulatory risks.