Raytheon [RTN] is starting 2018 with a new deal worth more than $1.5 billion for additional missile defense capabilities from one member of the 14-nation group that owns a Patriot system.
The company did not disclose what capabilities were purchased or which country currently owning a Patriot Integrated Air and Missile Defense System awarded the contract. The deal was announced Jan. 9 and initially completed Jan. 4.
Fourteen nations have previously purchased Patriot systems including the U.S., Netherlands, Germany, Japan, Israel, Saudi Arabia, Kuwait, Taiwan, Greece, Spain, South Korea, UAE, Qatar, and Romania.
Sweden and Poland signed deals in 2017 for future Patriot systems.
Sheila Kahyaoglu and Greg Konrad, analysts with Jeffries, believe the latest deal to be a direct commercial sale for additional fire units based on the size of the contract.
“Direct commercial sales in the past have included Saudi and South Korea. In our view, the contract highlights the appetite from current customers to expand and upgrade their current systems,” Kahyaoglu and Konrad wrote in a client note following the announcement of the latest Patriot contract.
Kahyaoglu and Konrad see the sale to Poland as a chance for Raytheon to upgrade its radars and open up potential retrofit opportunities. The first four units to Poland are based on the current configuration, but the following five to sixteen are designed with the new 360-degree radar system.
“The 360 degree system would open the door for the Patriot’s existing customer base to upgrade demonstrating the economies of scale of the ecosystem,” Kahyaoglu and Konrad wrote.