Author Archives: Aronson LLC

About Aronson LLC

Aronson LLC has been thinking ahead for its clients for more than 50 years. Aronson’s construction, real estate, government contracting, nonprofit, technology and private industry experts provide innovative audit, tax, and consulting services that help its clients move to the next level. From start-up to exit strategy, Aronson works with companies throughout the entire business lifecycle by proactively identifying opportunities and addressing challenges so that clients are able to focus on their core business. Aronson shows companies how to rethink everything to be more profitable, more competitive and better prepared for the future.

Aronson LLC

Inorganic Growth Strategies to Drive Increases in Enterprise Value

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Written by Marta Wilson on February 17, 2017 in Business Practices, Chapter Thought Leadership, Mergers & Acquisitions

This past Wednesday, February 15, ACG National Capital sponsored a roundtable discussion entitled, “Inorganic Growth Strategies to Drive Increases in Enterprise Value.”

This roundtable was a peer discussion for C-level executives to share insights on inorganic growth strategies, and was facilitated by the following participants:

  • Mike Beach, CFO WeddingWire, Inc.
  • Larry Davis, Managing Director, Aronson Capital Partners
  • Dan Ilisevich, Chief Financial & Administrative Officer, Compusearch Software Systems, Inc.
  • Tim Meyers, Managing Director, Baker Tilly Virchow Krause, LLP
  • Jonathan Wallace, Managing Director, Outcome Capital

During the discussion, these individuals discussed common reasons and strategies for pursuing acquisitions to increase the value of a firm, such as: entering new vertical or geographic markets, expanding service offerings, acquiring new contract vehicles, rolling-up competitors to gain economies of scale and valuation arbitrage. They also shared the pitfalls to avoid when pursuing inorganic growth initiatives.

Here are some of my key takeaways from this discussion:

Identifying revenue synergies:

  • If you have a strong technology platform, it’s easy to expand, including internationally.
  • Be honest with yourself as an acquirer about the motivations of the seller, and identify revenue generators in advance.
  • When buying a company, think about how to meld the cultures.
  • Do no harm because people can and will vote with their feet.
  • Integration early is important in order to capture the synergy.
  • Melding cultures becomes more difficult as time passes.
  • Service M&As are harder than technology M&As because you’ll need to keep most of the team if it’s a service company.
  • Doing the deal is important. But, it’s the integration that’s really important.
  • It gets more difficult to navigate change down the road after the acquisition.

The role of the CFO and CEO in an acquisition:

  • CFO builds model to convince board that going through integration challenges is worth it.
  • CEOs can generate some great deals and some terrible deals.

Integrating disparate organizations:

  • With international M&As, integration is tricky.
  • For domestic M&As, starting up joint projects early on is key.

Handling M&A inquiries:

  • If you receive calls about acquisitions, do your due diligence and research the company who is calling you.
  • Ask a lot of questions before revealing proprietary information (e.g., are you doing an analysis of the market, and if so, can I get that report).

Is it a good time to buy or sell? Factors to consider include:

  • Hiring freezes
  • Contracting standards
  • Is the program in the crosshairs of political change
  • Also, watch where the companies who have access to the new administration are putting their money.
  • Watch stock valuations and the bigger funds.

How do you finance a deal? Factors to consider include:

  • Debt (many types of debt out there)
  • Equity (last resort)
  • Cash
  • Stock
  • Be creative.
  • If there’s a way to have financing lined up ahead of time, this is more attractive to the seller.

Risks to consider:

  • People
  • Integration
  • Culture
  • Management Team (need a champion for buying the company, preferably one level below the CEO)
  • The company must perform during the sale. If not, value of the company will go down.
  • When companies are close in size, acquisition can be risky.

Assemble your A-TEAM:

  • Board (use your Board as “Dr. No”)
  • Internal Champion
  • Management Team
  • Attorney
  • Banker
  • Due Diligence Team – A big risk area is in customer and market due diligence.
  • Experienced management teams are usually better with scaling as a result of acquisition.

Other insights:

  • If adding bulk is the only reason you’re buying, might not be a great idea.
  • But, sometimes this is done in government contractor and software companies.
  • $100 Million is a good number to go public.
  • Communication is critical when buying a competitor.
  • Acquisition is not a strategy. It’s a tactic driven by the vision for growth
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Preparing your Company for Sale: Key Value Enhancing Strategies

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GovConnects Continuing Education Series

For many entrepreneurs, the ownership stake in the business represents their most significant personal asset. Business owners spend significant time and effort managing and growing their businesses. Often times, however, when it comes to selling the company, emotional attachments and lack of focus can hinder the process, and sometimes kill a deal.

Join GovConnects on May 12, 2015 at Loyola University, where a panel of experienced professionals will discuss strategies for preparing you and your business for sale, how to enhance the value of your business, key negotiation strategies and more. Phil McMann of Aronson Capital Partners will participate on the panel.

To learn more and RSVP, click here.

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Aronson LLC Acquires Deltek’s Washington Management Group

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Acquisition positions Aronson as the Leading GSA Schedule Consulting Practice in the Nation

Aronson LLC, a nationally ranked top 100 accounting and consulting firm today announced that it has acquired the GSA Schedule consulting business of Deltek’s Washington Management Group (WMG). This acquisition positions Aronson as the leading full service GSA Schedule consulting practice in the nation.

An official Deltek partner since 2002, Aronson’s Government Contract Services Group provides a full range of accounting and business solutions for government contractors, including Deltek implementations, financial and contract compliance, business system adequacy and Cognizant/OIG audit support.

Jeff Capron, Aronson’s managing partner, commented on the transaction, “The acquisition strengthens the longstanding partnership between Aronson and Deltek. It allows both companies to focus on their core capabilities in the government contracting market and continue to provide unparalleled service to clients.”

Aronson’s GSA Schedule practice is led by Hope Lane, a partner with more than 20 years of experience in the industry. Aronson serves a wide range of clients, from small contractors to Fortune 500 companies across the country, and provides a complete range of support that includes identifying, obtaining and maintaining GSA Schedule contracts, as well as resolving complex compliance issues.

The WMG business, which was acquired by Deltek in 2011, has more than 30 years of experience in contract management, risk management, contract compliance, advisory and consulting for government contractors.

This transaction will accomplish several key objectives:

  • Offer WMG clients access to expanded service capabilities to solve their most challenging business issues
  • Expand and extend Aronson’s team of government contract experts
  • Further position Aronson as a full service solutions provider to companies that do business with the federal government
  • Heightened collaboration with GSA, resulting from more frequent interaction


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Valuation from a Public Strategic Buyer

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At the end of June, two acquisitions of mid-size intelligence companies were announced by Tier 1 strategic buyers. On the 27th, Boeing announced that it had completed the acquisition of Ventura Solutions, a hardware and software businessman hand touch virtual graph,chart, diagramengineering firm with a focus on open source community support.  Later that week, Lockheed Martin announced the acquisition of Zeta Associates, a leader in the intelligence collection and processing. Although the timeline of these two transactions was coincidental, they demonstrate an interesting trend in the industry: Tier 1 strategic buyers are once again pursuing access to innovative and propriety technology solutions that they expect to leverage across a broader portfolio of existing Intelligence Community and Department of Defense customers.

Boeing Acquires Ventura Solutions

Ventura Solutions, based in Annapolis Junction, Maryland, is a hardware and software engineering company leading the development of the REDHAWK framework and applications. REDHAWK is a software-defined radio (“SDR”) framework designed to support the development, deployment, and management of real-time software radio applications. Philip McMann of Aronson Capital, who advised Ventura in the sale, said, “The level of interest we

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2014 Capital Deployment Strategies for Government Contractors

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Executives and boards of directors of publicly traded government contractors are constantly evaluating capital deployment alternatives in an attempt to balance growth with providing returns to investors. In general, companies have four primary alternatives, including (i) pay down debt; (ii) make acquisitions; (iii) buy back previously issued shares; and (iv) pay dividends. Unless the company is overleveraged, equity research analysts and the investment community view the later three alternatives as the more attractive capital deployment strategies since the current cost of debt is relatively inexpensive. The variety of capital deployment strategies in the industry illustrates several interesting trends in today’s government services M&A market. The exhibits below track historical capital deployment activity across government contracting sub segments over the past five years.


The Tier 1 Contractors on average generated $2.4B of leveraged free cash flow in 2013, but cumulatively only

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