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KippsDeSanto Sees Tactical Micro Deal as the Continuation of Defense M&A Trends; Karl Schmidt Comments

kipps_bobSecure Communication Systems and private equity firm Vance Street Capital have acquired training, instrumentation and surveillance company Tactical Micro, Inc. from private equity firm Relativity Capital.

M&A focused investment bank KippsDeSanto & Co. advised Tactical Micro on the deal and said it was reminiscent of key trends they have seen in the defense M&A environment.

KippsDeSanto said in a statement that companies which provide highly specialized offerings in the areas which the government deems mission-critical will be in high demand going forward and Tactical Micro’s surveillance, audio and video technology fits that profile.

“Approximately two-thirds of M&A deals in the past few years have been associated with C4ISR and military electronics-related companies, and this area will remain strong despite the challenging budget environment, ” said Karl Schmidt, managing director at KippsDeSanto.

acquisitionThe Tysons, Va.-based M&A company said tech firms that are part of large or vital programs with high revenue visibility and have an actionable pipeline are also attractive to potential buyers.

Tactical Micro has longstanding relationships with the U.S. Army, specifically the Program Executive Office of Simulation, Training, and Instrumentation, and the Washington Metropolitan Area Transit Authority.

“Having Tactical Micro on board will help Secure further diversify its end markets, ” said Brian Martin, principal at Vance Street Capital.

Schmidt added that the deal was a win for all parties involved because Relativity had been instrumental in helping to drive growth and solidifying the company infrastructure, while Secure Communication Systems fosters an environment where Tactical Micro can continue on its successful growth trajectory.

“Tactical Micro has an impressive track record of consistent revenue growth, ” said Allen Ronk, CEO at Secure Communication Systems.

Tactical Micro offerings are utilized in support of military training, metropolitan security systems and other complex surveillance opportunities.

Schmidt said companies like Tactical Micro will be in high demand this year and he expects a considerable uptick in M&A activity.

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