A Note From Our President & Founder Jim Garrettson
What will the U.S. government services market look like when we enter 2016 and who will be in it? We received some clarity to that question early Thursday morning when Britain’s BAE Systems said it would hold onto its U.S. government manpower and services business and not push forward on efforts to sell the unit.
Market conditions, company valuations, federal budget movement and recent contract wins are the shifting sands that make handicapping the GovCon marketplace and this potential sale a murky equity equation and best left to those with an appetite for risk while eliminating the faint of heart.
BAE launched a review of the business in April after the world’s third-largest defense contractor reported “external interest and a number of enquiries” for the unit that posted $800 million in revenue during its last fiscal year.
GovCon observers are now shifting their attention toward Lockheed Martin and L-3 Communications to find out what those companies will do with their respective government services segments.
Both companies have indicated to Wall Street they would like to reach a decision by the end of this year on whether to sell their respective units as a whole, offload in pieces or spin them off entirely into publicly-traded businesses.
One factor that could decide both outcomes is the Federal Reserve’s December meeting as investors are betting interest rates will rise from the near-zero levels Lockheed cited in its rationale behind the $9 billion Sikorsky acquisition.
Lockheed’s services unit posted nearly $6 billion in 2014 revenue and L-3’s services business recorded $1.1 billion in sales last year.
Congress OKs Revised Fiscal 2016 Defense Bill
House and Senate negotiators took out $5 billion from this new version to fall within limits set by the recent two-year budget agreement.
Executive Mosaic’s GovCon Index closed at an all-time high Wednesday for the second time in three sessions as U.S. stocks also extended their record-setting rally in their best one-day performance of 2017 so far with the S&P 500 composite index above 2,400 for the first time during intraday trade after President Donald Trump’s Tuesday night speech to
Executive Mosaic’s GovCon Index and U.S. stocks fell Tuesday at their worst one-day declines over the past month as investors looked ahead to President Donald Trump’s speech before a joint session of Congress at 9:00 p.m. Eastern time for further clues on his economic agenda that has included promises of tax cuts, deregulation and defense spending increases. GovCon
Executive Mosaic’s GovCon Index posted its biggest one-day decline in a month Thursday with services and industrial components the largest drags in a session that saw U.S. equities struggle for clear direction as investors looked for more clarity on President Donald Trump’s economic agenda. GovCon Index decliners outnumbered advancers by a 5-to-1 ratio as only two of its
We use cookies to offer you a better browsing experience, analyze site traffic, personalize content, and serve targeted advertisements. Read about how we use cookies and how you can control them on our Privacy Policy. If you continue to use this site, you consent to our use of cookies.
What will the U.S. government services market look like when we enter 2016 and who will be in it? We received some clarity to that question early Thursday morning when Britain’s BAE Systems said it would 
BAE launched a review of the business in April after the world’s third-largest defense contractor reported “external interest and a number of enquiries” for the unit that posted $800 million in revenue during its last fiscal year.
Both companies have indicated to Wall Street they would like to reach a decision by the end of this year on whether to sell their respective units as a whole, offload in pieces or spin them off entirely into publicly-traded businesses.
