When I was working at United Defense^*, the Carlyle Group sold it to the UK firm BAE, and used the proceeds to buy Dunkin Donuts.

BAE paid a significant premium in order to buy UD, because they saw it as an entry point into the US defense market.

Well, Finmeccanica has now purchased the defense electronics firm DRS Technologiesat a 32% premium for what appears to be much the same reason.

I believe that we will see more of this, particularly with the dollar weak, as the US now spends more on its military than the rest of the world combined.

Additionally, we will see many more of the joint ventures of the type that EADS and Northrop Grumman have entered into for the tanker competition.

^*Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.