Tag Archives: M&A

2016 Review & 2017 Outlook: The Trump Effect

A total of 92 M&A transactions were announced in the defense technology and government services market in 2016, which was slightly below the 107 transactions completed in 2015, but in-line with 2013 and 2014 levels. M&A in 2016 witnessed a “normalization effect” after the flurry of activity that occurred in 2015. Contractors have started to notice the effects the 2013 and 2015 Bipartisan Budget Act’s sequester relief has had on the overall procurement environment. This relief has allowed the Department of Defense to significantly reduce the amount of anticipated cuts in technology operations and maintenance, translating into strong performance across the defense technology and government services market. As we enter Fiscal Year 2017, we expect to see similar trends in M&A, fueled primarily by better visibility in the budget and continued emphasis of future federal funding priorities brought on by the new Trump Administration. Read the entire Quarterly Newsletter here to review the following topics more thoroughly discussed:

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Pockets of Growth in the Federal Market

In spite of relatively stagnant growth prospects across the defense and government services market, there are sub markets that continue to experience outsized growth, including Cybersecurity, C4ISR, Data Analytics and Healthcare IT. The forecasted growth in these sub segments is outpacing the broader federal IT outlook and is therefore driving M&A activity. Read the entire Q2 2016 Newsletter here to review the following themes more thoroughly discussed:

  • Federal Initiatives Spawn Cybersecurity Spending and M&A
  • New C4ISR Technologies Drive Q2 Awards
  • Enterprise-Wide Adoption of Data Analytics Will Continue in 2016
  • Patient Care and Efficiency Take Center Stage

Aronson Capital Partners is a leading middle-market investment bank focused exclusively on the government services and technology industry. Please feel free to contact one of our principals below with any questions.


What Drives Value in Government Services & Defense M&A?

M&A transaction volume in the government services & defense market in recent periods has trended upward. There were 112 government services & defense acquisitions in 2015, compared to 82 and 79 acquisitions in 2013 and 2014, respectively. There were 31 acquisitions in the space for Q1-2016, which was a significant increase over Q1-2015 activity.[1]

So what are the target company attributes that spark interest from potential buyers and influence valuations the most in these deals? Specific value drivers vary from company to company, but some common themes for government services & defense firms include:

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Explore Buy-Side Due Diligence with Aronson’s Newest Webinar


Free Webinar – July 28, 2016: Before & After the Deal: What Middle Market CFOs & Controllers Need to Know

M&A transactions are major undertakings that can require a thorough due diligence process. But that’s only part of the story — once the deal closes there are a number of other considerations that CFOs and Controllers must wrestle with.

In Aronson LLC’s upcoming webinar series Before & After the Deal: What Middle Market CFOs & Controllers Need to Know, members of our Financial Advisory Services practice will explore the buy-side M&A process through two lenses, pre-acquisition due diligence and post-acquisition business combination accounting.

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M&A Shop Talk – Employee Stock Ownership Plan

If you own a small, profitable business and are looking for an alternate exit strategy, an employee management buyout via a leveraged Employee Stock Ownership Plan (ESOP) might be ideal for you. For general background information on how an ESOP buyout mechanically works, including the financing arrangement intricacies, please visit the National Center for Employee Ownership (NCEO).

Now, if you are interested in exploring this strategy, the process should begin with a self-assessment of your overall business model including your tolerance for risk. Enumerated below, is a preliminary list of characteristics and attributes that must be applicable to your particular business model and; more importantly, must be aligned with your overall personal risk tolerance.

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