Defense takeovers to increase, expert says

Bloomberg

"There’s going to be a lot of activity," said Bovin, 61, in an interview Monday. "The only growing part of our economy today is the government." Bovin is starting an advisory boutique, Stone Key Partners, with former Bear Stearns colleagues.

The value of global aerospace and defense takeovers fell 57 percent to $13.5 billion last year, and the largest deal was Finmeccanica’s $5.2 billion purchase of DRS Technologies Inc. Bovin and Michael Urfirer, 49, earned a fee for advising DRS despite parting ways with Bear Stearns before the transaction was completed.

Bovin and Urfirer went off on their own after Bear Stearns was taken over by JPMorgan Chase last year. The boutique, which announced its formation on Monday, has offices in New York and Connecticut and advises defense, aerospace, and technology companies. Stone Key may also make its own investments.

Stone Key has about 12 employees and may get bigger as senior Wall Street bankers flee the biggest firms, Bovin said. "What’s been interesting to us is the number of very senior guys with real clients, real backlog, real reputations who have picked up the phone and called us," he said.

DRS agreed to pay 0.45 percent of the deal’s value for the bankers’ advice. The company sought Bovin because of his experience in the defense sector, the Parsippany, New Jersey-based maker of military electronics said in a regulatory filing last year.