Home / News / Weekly Roundup August 15 – August 19 2016: Leidos Doubles, M&A Wheels Keep Turning & more

Weekly Roundup August 15 – August 19 2016: Leidos Doubles, M&A Wheels Keep Turning & more

August 15 – August 19 2016

A Note From Our President & Founder Jim Garrettson

The long-awaited, much-anticipated and well-documented merger of Leidos into the now former Lockheed Martin information technology and technical services business completed on Tuesday.

As if GovCon observers needed reminding, Leidos doubles to $10 billion in projected annual revenue versus the pre-transaction sales figure $5 billion as the Reston, Virginia-based contractor becomes by far the U.S.’ largest player in government services.

This week also gave industry watchers a pair of new acquisition deals from privately-held government services contractors as both companies chart a new path for their expansion aims.

ASRC Federal has marked its entry into the intelligence community through the purchase of software development and technology services provider Vistronix, which itself was a player in the GovCon acquisition arena in late 2014 through three dealsalso in search of expansion throughout the IC market.

Vistronix also represents ASRC Federal’s second pickup under the leadership of CEO Mark Gray, a two-time Wash100 inductee who joined the engineering and technical services contractor in mid-2014 from the former URS.

ASRC Federal’s first deal with Gray at the helm was in late 2015 for Data Networks Corp. to add a footprint in the healthcare information technology arena and positions on contract vehicles with civilian agencies.

For the second M&A deal announced this week, global investment firm Apollo Global Management and executives at Constellis Group will buyout the security services contractor that has nearly 8, 000 employees across 25 countries.

Apollo’s move into GovCon is another example of how some private equity investors view the market as one of opportunity and stability, a point PAE CEO John Heller emphasized to ExecutiveBiz in May after his company was purchased by Los Angeles-based Platinum Equity.

Like Constellis, PAE has large international footprints and operates much of its business in services to defense and other national security agencies in-theater.

“Even though we felt the defense spending downturn within our industry over the past few years, it has a stable spending graph over the long term, ” said Heller, also a 2016 Wash100 inductee.

“From an investment standpoint, our industry looks very attractive and doesn’t have huge swings upward or downward. If you acquire a good company and help it grow, you can take advantage of that stable market and continue with a successful business.”

THE WEEK’S OTHER TOP 10 GOVCON STORIES

CACI 4Q Earnings, Sales Exceed Street Estimate as FY 2016 Results Also Top Analyst Outlook
Shares in CACI closed up 5 percent and hit the $100 mark in intraday trade Thursday for the first time since June 22.
Unisys to Update USDA Computing Applications Under Potential $232M Contract; Casey Coleman Comments
USDA’s rural development agency selects Unisys to help build software for the management of grants and loans.
Exelis Vet Ann Davidson Joins L-3 as SVP & General Counsel
Davidson will succeed the retiring Steven Post at the New York City-based defense technology manufacturer.
Former Army Centcom Chief James Terry Joins Cubic in Defense BD SVP Post, Eric Carr Gets Promotion
Terry is a retired three-star general and Carr previously led integrated training services for Cubic’s defense segment as VP and deputy GM.
Boeing Gets $2.8B Air Force Contract Modification for Lot 1 & 2 Tankers
The KC-46A Pegasus aerial refueling tanker received the Pentagon’s Milestone C designation Aug. 12 to enter the low-rate initial production phase.
ManTech Chosen for Potential $322M NGA Enterprise IT, Cyber Services Contract
NGA looks to ManTech for operations and maintenance services on the agency’s enterprise and cybersecurity environments.
DLA Taps Agfa Healthcare for Potential $768M Medical Imaging Tech Contract
Agfa will supply network-picture archive communications systems to all four military branches and civilian agencies for up to 10 years.
Air Force Awards General Atomics $371M Reaper UAV Production Contract
General Atomics will build up to 30 of the Predator variant unmanned aerial vehicles over three years.
Navy Picks LSI, TECHSOFT for Computer Simulation Services Under $345M in Contracts
LSI and TECHSOFT will carry out re-engineering and development work under task orders through up to May 2022.
Air Force Selects CSRA for $88M Weapon Systems, Logistics Integration Support IDIQ
CSRA will support Air Force efforts to facilitate interoperability of information technology infrastructure over up to five years.

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