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Houlihan Lokey: Acquisitions of Small Government Vendors Rose 23% Last Year

The Wall Street Journal reported today that Los Angeles-based investment bank Houlihan Lokey recently calculated that there were 71 acquisitions of small government vendors in 2010.

That represents a 22.4 percent increase over 2009 and the highest level since 2000.

The Journal’s Angus Loten found that small businesses took in just under $98 billion, or 22.7 of all federal contracts, in 2010, according to the Small Business Administration.

Since 1997, the U.S. has aimed to award 23 percent of all federal contracts to small businesses.

A federal marketplace mergers and acquisitions specialist told Loten that he has seen the number of deals for smaller government vendors double in the past year.

Rob Doolittle, a spokesman for General Dynamics (NYSE: GD), said that smaller vendors are attractive as they provide buyers with access to new federal customers and spots on federal contract vehicles.

Larger firms can then leverage those relationships to enhance their chances to win future awards, according to Robert Burton, a partner at Venable LLP and a former deputy administrator of the Office of Federal Procurement Policy.

ManTech International Corp. (NASDAQ: MANT) announced today that it will acquire information technology solutions provider Worldwide Information Network Systems, which has a position on the $6.6 billion Defense Intelligence Agency SITE contract,  for $90 million cash.

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