A Note From Our President & Founder Jim Garrettson
Just when we thought GovCon was on a merger-and-acquisition hiatus, two deals have garnered our attention this week with one that has definitive effects in the public sector and a second that might.
Our first M&A deal to examine comes from KBR, who has agreed to pay $570 million for engineering services contractor Wyle Laboratories in pursuit of new research-and-development work with agencies in the U.S. to complement KBRâs current overseas work for the federal government.
During a call with investors Monday, KBR CEO Stuart Bradie described the U.S. government services market as one that offers a stable growth path to his company.
âWeâll have two very different sources of revenue to de-risk the government side of our business. Thereâs good visibility in the government side because of lengths in procurement cycles and we can see whatâs down the tunnel 12-to-24 months out, â Bradie said.
Stable government funding over the long-term helps investors view GovCon as an opportunity for returns even in the midst of spending cuts and economic headwinds, PAE CEO John Heller told ExecutiveBiz in an article published Tuesday.
In that article, Heller updated ExecutiveBiz on the contractorâs activity since its March acquisition by LA-based Platinum Equity and offered other insights into what the investment firm sees in both PAE and the government services market.
The second M&A development that broke this week will have CSC merge into the enterprise services segment of Hewlett Packard Enterprise, one of two companies made out of the former HP.
Part of that deal involves a U.S. public sector component within HPE that would contribute nearly $2.86 billion in annual revenue to the combined company, CSC said in an investor presentation.
One potential wrinkle is CSCâs two-year non-compete agreement with the government technology services spinoff CSRA that forbids CSC from federal market activity and restricts both companies from âcertain business activities in certain areas of the U.S. state and local government field.â
So what did CSC CEO Mike Lawrie tell analysts Tuesday regarding the future of HPEâs U.S. public sector business?
âPost-close all options, and I underscore the word âall options, â would be on the table. But that decision will be approached and looked at after we close the transaction.â
CSRA CEO Larry Prior offered investors this outlook on the merger CSC and HPE expect to close in March 2017.
âAs a company, weâve got a lot of time to think about this… I know our board is tremendously interested in it and weâll consider it along with all of the other strategic opportunities that will avail themselves in the market over the next year.â
A General Dynamics (NYSE: GD) business unit has received a $298 million blanket purchase agreement to develop case management system applications for the Administrative Office of the U.S. Courts. Under the five-year contract, General Dynamics Information Technology will also help the administrative office engineer, operate and secure software platforms, the company said Tuesday. John Ludecke,
Joe Durbin, a seven-year senior program director at CSRA, which is now part of General Dynamics (NYSE: GD), was elevated to the role of account director at GD’s information technology business where he will be responsible for Centers for Disease Control and Prevention-focused business activities. According to his LinkedIn profile, the CDC account director oversees
J.R. Glass, a more than two-decade government IT market veteran, has joined Leidos (NYSE: LDOS) as vice president for government health and safety solutions. Glass announced his new position Thursday in a LinkedIn post. Prior to this appointment, he was the chief growth officer at service-disabled veteran-owned professional services provider TISTA Science and Technology for