F-35 creator Lockheed Martin's (LMT.US) defense industry landscape expands again, spending $360 million to acquire Amentum's (AMTM.US) hardware division.

Amentum (AMTM.US) stock price soared more than 7% in early US stock trading on Wednesday after the company announced it had agreed to sell its Rapid Solutions business to US defense giant Lockheed Martin Corporation (LMT.US) for $360 million in cash. The latest announcement stated that this transaction aligns with Amentum's long-term strategic plan to focus on becoming a pure-play company that provides technology-enabled services and accelerates its debt reduction plan. The acquisition transaction is subject to customary regulatory approvals and closing conditions, and is expected to be completed in the second half of 2025, bringing in approximately $325 million in after-tax income for Amentum. Adam Harrison, Senior Vice President of Strategy and Corporate Development at Amentum, said, "The divestiture of Rapid Solutions enables Amentum to focus on mission-critical services, solidifying our position as a global pure-play provider of advanced engineering and technology-enabled solutions." Rapid Solutions is a specialized hardware division within Amentum's portfolio, accounting for approximately 1% of the company's annual revenue and adjusted EBITDA. This division primarily develops hardware systems related to US national security missions, including intelligence gathering, professional military-grade Intelligence, Surveillance, and Reconnaissance (ISR) systems, and hardware systems required for advanced communications and tactical warfare technologies. After the completion of the transaction, approximately 230 employees of Rapid Solutions are expected to join Lockheed Martin Corporation. Lockheed Martin Corporation Expands Key Business Areas Again For Lockheed Martin Corporation, the maker of the F-35 fighter jet, this acquisition significantly enhances its key business areas, particularly in the defense-grade critical mission systems in deep cooperation with the US military and NATO, supplementing its existing US national security defense-grade technology platform with advanced ISR and tactical capabilities. This transaction reflects a broader integration trend in the US defense industry - as the political and budget landscape shifts at GEO Group Inc, companies are increasing their focus on core defense strengths and divesting non-strategic assets. The divestiture of the hardware manufacturing business by Amentum further focuses on higher-profit margin technology-enabled SaaS services. The company stated that the proceeds from the transaction will also support its debt reduction goal, strengthen its balance sheet, and enhance the flexibility of its future performance growth plans. What does Rapid Solutions mean for the F-35 fighter jet? The revenue generated by the F-35 series fighter jets accounts for nearly one-third of Lockheed Martin's total revenue, making it the company's cash cow and flagship defense product. The existing contracts and rapid prototyping capabilities of Rapid Solutions are expected to directly fill the gap in Lockheed Martin Corporation's low-cost ISR component field and shorten the delivery cycle to the intelligence community and Special Operations Command. It is understood that the US Air Force and NGAD (Next Generation Air Dominance) emphasize networked sensor fusion and battlefield cloud linkage; Lockheed Martin has previously invested in F-35-CCA control technology, and the hardware systems of Rapid Solutions, such as micro communications, data links, and ISR antennas, are expected to be directly integrated into future unmanned aircraft or mission pods, aligning with the distributed lethality concept of future sixth-generation aircraft systems. Rapid Solutions specializes in small ISR sensors, tactical links, and aircraft transport kits, with annual revenue accounting for only 1% of Amentum but focusing on high-priority defense areas, with high secrecy thresholds and 230 engineers with security clearances. Lockheed Martin Corporation's acquisition of Rapid Solutions from Amentum for $360 million is essentially a rapid fill-in of the high-growth, government-priority procurement sub-market of "ISR + tactical communications," and extends its hardware-system-service integrated capabilities to unmanned collaborative combat and next-generation air combat platforms. This acquisition, combined with the company's existing core revenue stream - the F-35 fighter jet and future sixth-generation fighter/autonomous aircraft group plans - forms a synergy at the sensor, data link, and mission system level, which can be seen as a reinforcement of the "small but refined" puzzle rather than a redefinition of its heavily reliant F-35 related revenue structure. The F-35 Block 4/TR-3 upgrade emphasizes an open mission system (OMS), allowing for external third-party sensors and real-time data links, so Rapid Solutions technology is expected to enter the "plug-in" ecosystem to enhance mission flexibility. In addition, for sixth-generation air combat systems such as NGAD and CCA, Lockheed Martin requires small, low-power, high-bandwidth ISR/communication nodes to support a "kill chain grid"; the high compatibility of Rapid Solutions' technology roadmap may significantly shorten the development cycle.