Lockheed Expects to Buy 1 or More Electronics Firms

Times Staff Writer

Lockheed expects to acquire one or more defense electronics companies next year as part of a strategy to increase its presence in that fast-growing field, the Burbank-based firm's top two executives said Wednesday.

The firm, however, also is concerned about being taken over itself and therefore is considering anti-takeover measures as well, they said.

"We haven't proposed any (anti-takeover moves), but we're obviously concerned about it," Chairman and Chief Executive Roy A. Anderson said at a luncheon meeting with reporters. He added that the firm "would put up a fierce defense" in order to stay independent.

As for acquisitions, the firm is "not talking to anybody currently, but it's very definitely on the front burner" and "you will see evidences of it in 1986," Anderson said.

"We've been looking at it (acquisitions) for about a year," President Lawrence O. Kitchen said. Any purchases, he said, have "got to be in a growth market and of a firm that's not troubled, so we're going to pay a premium."

The interview with the executives was their first since last month's announcement that Kitchen will replace Anderson as chairman and chief executive when Anderson retires at the end of this year.

In the past, Lockheed has not stressed acquisitions, but its financial resources have been strengthened in recent years amid record profits from its current defense programs and the end of financial problems arising from the now-discontinued L-1011 commercial jetliner program.

As with other defense contractors, Lockheed has been bolstering its presence in electronics, computer software and other technologies as slowing growth in defense spending is expected to put increasing pressure on firms to produce sophisticated systems at the lowest possible cost.

Already this year Lockheed has acquired or bought stakes in several small electronics and software firms.

Two of the acquisitions were added to Lockheed's fast-growing information systems group, which expects its revenue to quadruple to as much as $1 billion by the early 1990s.

More Are Planned

The two executives said more acquisitions are planned for this group, which provides computer-aided design and manufacturing and other computer services.

Neither executive would name any potential acquisition candidates, but one Wall Street analyst suggested that Lockheed would be particularly interested in firms specializing in defense software, an area expected to be vital in the development of a "Star Wars" space-based missile defense system.

Lockheed's missile and space division in Sunnyvale, Calif., recently won a major Pentagon contract to develop a key component of such a system.

Attractive publicly traded firms in defense software include Logicon, EG&G; Inc. and BDM International, the analyst said.

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