Saab Consolidates U.S. Defense Businesses

Saab, a Swedish defense and aerospace company, is creating a new U.S.-based company called Saab Defense and Security USA.

SDAS will incorporate previously separate divisions Saab Training USA, Saab Barracuda, Saab Support and Services, and parts of Saab Sensis Corporation.

Company executives discussed the future of Saab Oct. 22 at a breakfast meeting near the Walter E. Washington Convention Center, where theAssociation of the United States Army’s annual exposition is taking place.

The unification of the properties into one entity would not result in any layoffs, said Lars Borgwing, president and CEO of Saab Defense and Security USA. The move issimilar to the recent corporate realignment of the U.S.-based defense division of France's Thales, which consolidated several businesses under Thales Defense and Security Inc.

The company sees new opportunities in the United States despite shrinking budgets. "The Swedish customer remains a very important customer for Saab … but the focus is definitely on the global level now," said John Belanger, vice president of communications for Saab North America.

Since 2010, Saab has worked to increase its presence in the United States, said Belanger. The creation of SDAS is the culmination of that effort, he said.

"The U.S. market is the largest defense market in the world, even with sequestration. Saab is a relatively small fish in a large pond, but if we can gain one or two percent of that market share, that's a great increase for the company globally," said Belanger.

Since the company's push to enter the North American market, Saab has seen significant growth. In 2010, the firm reached around $250 million in sales from its North American business, and in 2012 it increased sales to about $500 million, said Belanger. Exports now make up 70 percent to 80 percent of Saab's business, he said.

"We're really positive and see opportunities for growth here, even in a constrained marketplace," he said.

SDAS will seek to work with large prime contractors to better leverage its products, said Belanger. One example is the selection of Saab Sensis Corporation's Sea Giraffe Agile Multi-Beam 3D naval surveillance radar for the General Dynamics-built littoral combat ship USS Independence (LCS-2) in 2011.

"[Our] long-term goal is to grow the business, grow jobs, and to act not as a competitor to the existing primes, but as a technology partner, bringing Saab's unique product portfolio in and adding it where and when it's practical and applicable," said Belanger.

SDAS will also consider purchasing U.S.-based companies to add to its portfolio, said Borgwing. He declined to give specific details, but said a potential acquisition would need to be "unique." He said the company is a "patient investor."

Topics: Business Trends, Business Development, Mergers and Acquisitions, Partnering, Defense Department, DOD Budget, Procurement