GovCon M&A Market Happy First Half of 2013 Is In Rearview Mirror!
Bob Kipps, Managing Director, KippsDeSanto & Company
With only four Defense and Government Services transactions completed in June and 46 completed during the first half of 2013, the sector’s M&A market is hopefully nearing the end of a dry period for deal closings.
The operative word there is “closings” because closing statistics—while clearly relevant to the overall healthiness of the market–are obviously a lagging indicator of market activity.
Notwithstanding the negative headlines and broader funding and contractual uncertainties still in the market, deal activity HAS actually accelerated during 2013 (albeit from a very slow start) with strong deal valuations being achieved for the most coveted targets.
This gradual improvement is resulting from several factors including the elevated level of divestiture activity by larger firms who continue to refine their strategies (e.g., CSC’s recently announced divestiture to PAE); some of the larger industry firms being unwilling to allow this year’s uncertainties to delay execution of their long-term repositioning strategies and perhaps even from a modest level of business optimism.
On the last point, while still concerned about FY 2014, many sector players (after experiencing a slow start to the year) are hoping for an active next few months of contract bidding opportunities as some agencies realize they may actually have GFY 2013 budget to spend.
Onward to a more active (closing-wise) deal market in the second half of 2013 and beyond!
_ _
Bob Kipps has more than 20 years of experience providing transaction advisory and financial consulting services to defense and technology firms. Prior to founding KippsDeSanto, he served as a managing director in Houlihan Lokey’s Washington office and helped lead the firm’s Aerospace∙Defense∙Government industry investment banking group.
Named the 2007 Dealmaker of the Year – Investment Banker by the Association for Corporate Growth’s National Capital Chapter, Kipps has also held executive posts with Peterson Consulting and Tucker Alan, advising aerospace and defense, engineering, construction and IT companies.
Kipps graduated from the University of Virginia with distinction as a bachelor of science in commerce. He is registered with FINRA as a General Securities Registered Representative and Principal (Series 7, 63, 24, and 79).
