Lockheed Martin’s Acquisition of NationScape Inc. Harvard Case Solution & Analysis

Lockheed Martin’s Acquisition of NationScape Inc. Case Solution

  1. Is NSI an attractive company compared to competitors? Is NSI a good strategic fit for Lockheed Martin? What are the potential synergies from the acquisition? Any potential risks of the deal?

NSI is an attractive company as compared to its competitors. The EBIT margin suggests that the company is more profitable than other comparable companies. The company has a high growth potential and future business prospect as well. While looking at the figures, it can be seen that the company has less value of assets, liabilities, and revenues. This implies that the organization is currently a small-scale company with high growth potential. The better management and infrastructure of Lockheed can accelerate company’s growth significantly. Moreover, the company is in its early stages of life. Therefore, Lockheed Martin will make the company grow according to their needs and operating style. In other words, the acquisition will be strategically best for Lockheed Martin and provide it an opportunity to adapt NSI’s growth potential with its operating style.

lockheed case solution

lockheed case solution

This acquisition is favorable for Lockheed Martin, since both companies deal in the same industry and know norms of the industry. Lockheed can use the support services of NSI in its defense operations. Other related activities will increase competency and the quality of services. Lockheed Martin has a centralized structure and most of its operations are regulated in line with set rules and established procedures. The NSI is less standardized and has a flexible management style. There is significant difference in the management, organization structure, and culture of both the companies. Therefore, it is more beneficial that the acquired company should be allowed to work in its own way. However, it is possible for NSI to adapt the management and operating style of Lockheed Martin, since it is a growing company. Nevertheless, this will require time.

Talking about the potential synergies that can be obtained by the acquisition, the first benefit is that the NSI has a global presence and it has a presence in markets that are un-touched by Lockheed Martin. Thus using the pathways of NSI, Lockheed will reach new markets and expand its business globally. The acquisition will help Lockheed to expand its business globally by taking over NSI’s customer base. The acquisition will increase the share’s value as the customer base and geographical business operations will increase. Thus, revenues and earnings per share will increase. Another benefit will be that NSI has built infrastructure, and enhanced support services, which can be used by Lockheed for promoting its products and build its brand image in new markets. This will ensure higher revenues for the company. The company will have the advantage of NSI presence in remote areas for distribution of its products to these areas as well as its uninterrupted services, which can be useful with support system to have logistics, even in dangerous places..


Halliburton Jacobs KBR Fluor Shaw URS DynCorp NSI
CURRENT ASSETS 9327 1337.43 3510 3108.222 1254.82 1273.06 462.236 180.837
CURRENT LIABILITIES 4437 785.095 2566 2339.335 781.161 698.621 261.869 120.525
CURRENT RATIO 2.102096011 1.703526 1.367888 1.328678 1.606353 1.822247 1.765142 1.500411
REVENUE 21007 5635 10206 13161.05 3265.916 3917.57 1920.91 535.348
EBIT 2712 242.53 517 315.871 67.756 174.422 101.881 70.827
EBIT MARGIN 12.91% 4.30% 5.07% 2.40% 2.07% 4.45% 5.30% 13.23%

  1. What is the value of NSI based on a DCF valuation?

For assessing the value of the company to help estimate consideration price, DCF model will be used for calculating the discounted cash flow. Initially, free cash flows are calculated, for this WACC is estimated. The data provided in the case is used for WACC calculation:.....................

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