Lining Up

Raytheon, Boeing and BAE Systems are among the suitors looking to buy Fairfax, VA-based defense contractor Argon ST, Reuters reported this morning, quoting unnamed sources:

Argon, which hired advisers to sell itself in January, has asked potential buyers for $30 a share, the sources said, a price that values the company at $660 million based on fully diluted shares outstanding.

Argon, which makes sensors for intelligence, surveillance and reconnaissance systems, has completed management presentations with Boeing, BAE, Raytheon and a few other companies, the sources said. They spoke on condition of anonymity because details of the auction are not public.

Argon also helps produce the AN/SLQ-25(V)A and AN/SLQ-25(V)(C) torpedo countermeasure transmitting sets, among other systems.

Inside the Army reported last October that Argon was one of the companies that has helped develop the forward-operating base protection system Cerberus. The Army intended to solicit bids for the system and purchase some 200 units, according to an service official. Further:

A highly mobile, configurable system, designed and developed by the Communications-Electronics Research, Development, and Engineering Center branch of NVESD, Cerberus has been used by stateside border patrols and the military, Jennings told Inside the Army during an Oct. 13 tour of NVESD’s facilities. The system, fielded to the military since 2006, is gaining new relevance as troops deploy to more remote parts of Afghanistan.

“We are trying to extend the eyes and ears of the individual,” said Jennings. “Where the other ((force protection systems)) are more reactive, trying to protect yourself from being shot, trying to protect yourself from being blown up, trying to stop people from penetrating ((perimeters)), we are trying to get forward of it, to see and hear far enough out that we can affect a response earlier.”

Development efforts began after Sept. 11, 2001, to provide security at ammunition storage facilities, and Cerberus was made mobile to provide border security in 2005. After the Army’s rapid equipping force expressed interest in 2007, a modified system was deployed during that year’s troop surge in Iraq.

The Army has fielded 40 Cerberus systems as part of the Base Expeditionary Targeting and Surveillance System-Combined (BETSS-C), and variants are being used by American border patrol units and by the Marine Corps, which employs a version called the Ground Based Operational Surveillance System.

Reflecting a broader interest within the Army, the 82nd Airborne has submitted an operational needs request for Cerberus, said Jennings, and Army modernization officials in the Army Capabilities Integration Center’s Task Force 120 have told him it may be useful for infantry brigade combat teams.

“There was a gap in the IBCT which had to do with organic protection, security and surveillance,” said Jennings. “((The Task Force 120 officials)) were looking at what we were doing for that. So some of the things that we were doing for the border patrol and the 82nd may have applications.”

In January, the Defense Department announced it had awarded Argon a $23.8 million "firm-fixed-price contract for 28 Cerberus units and associated spares for deployment in support of operational forces abroad."