A Note From Our President & Founder Jim Garrettson
This week, let’s take a look at the current landscape of mergers and acquisitions in the GovCon sector. Notable M&A activity includes:
CenturyLink adjusting the closing date of its purchase of Level 3 Communications
L3 Technologies purchasing Adaptive Methods
UTC’s agreement to purchase of Rockwell Collins
H.I.G. Capital’s purchase of NCI
Accenture acquiring Phase One Consulting Group
Jacobs Engineering Group purchasing CH2M
Shareholder approval for MDA’s purchase of DigitalGlobe
On September 12th, CenturyLink announced that it had pushed back the projected closing date of its pending $34 billion acquisition of Level 3 Communications from September 30thto mid-late October. The revised timeframe for the transaction’s intended closure was based on the California administrative law judge’s recommendation for the California Public Utilities Commission to clear the deal at its October 12th meeting. CenturyLink CEO Glen Post said 24 states and territories have cleared the transaction since the start of the regulatory approval process.
Also on September 12th, L3 Technologiespurchased systems engineering firm AdaptiveMethods for an undisclosed sum. By purchasing Adaptive Methods, L3 Technologies is further expanding its footprint in the undersea market. L3 said that it will incorporate Adaptive Methods into its sensor systems business segment to operate as L3 Adaptive Methods. Christopher Kubasik, L3 president and COO, said the transaction will provide L3 with access to Adaptive Methods’ unmanned undersea vehicle platforms and further support the U.S. Navy’s requirements.
On September 4th, United Technologies Corp. agreed to purchaseRockwell Collins through an estimated $30 billion transaction. UTC hopes that the purchase will aid efforts to establish a new aerospace systems supplier. UTC said that it will pay approximately $23 billion in cash and stock and assume $7 billion in net debt from Rockwell Collins. Greg Hayes, UTC chairman and CEO, said the acquisition will add to UTC’s aerospace business and bolster its complementary aerospace systems offerings. Both companies expect to close the transaction during the third quarter of 2018, subject to approvals by Rockwell Collins shareholders and regulatory authorities. Rockwell Collins will be combined with UTC’s aerospace systems business to form a new unit called Collins Aerospace Systems.
On August 16th, H.I.G. Capitalpurchased government IT company NCI in an approximately $283 million deal, taking NCI from the public sector into the private. Rick Rosen, an H.I.G. executive managing director, said that he believes NCI will continue its efforts to provide differentiated technology platforms to federal clients.
In early August Accenture wrapped up its acquisition of federal government cloud services provider Phase One Consulting Group for an undisclosed sum. Accenture has stated that it pursued the acquisition to expand its Salesforce and cloud offerings within the federal market. The purchase marks Accenture’s seventh Salesforce-related acquisition since 2014.
Also occurring in early August was Jacobs Engineering Group’s purchase of CH2M for anestimated $3.27 billion transaction as both companies aim to deliver additional infrastructure and engineering services to government and private sector clients. Jacobs will pay $2.85 billion in cash and stock and will assume $416 million in net debt from CH2M. Both companies expect to complete the transaction during the first quarter of Jacobs’ fiscal 2018. By acquiring CH2M, Jacobs will be able to further expand its global footprint in transportation, water, nuclear, petroleum, chemical and environmental fields.
At the tail-end of July shareholders at both DigitalGlobe and MacDonald, Dettwiler and Associates separately approved MDA’s acquisition of DigitalGlobe for $3.6 billion. Stockholders at both companies voted in favor of the acquisition, and MDA stockholders also voted in favor of electing three DigitalGlobe nominees as directors: Howell Estes, L. Roger Mason and Nick Cyprus. MDA also announced the other elected directors: Robert Philips, Howard Lance, Brian Kenning, Dennis Chookaszian, Eric Zahler, Lori Garver, Joanne Isham and C. Robert Kehler.
THIS WEEK’S TOP NEWS STORIES
Weekly Contract Awards This week’s top GovCon contract awards. CACI International, Boeing, CSRA, Huntington Ingalls, Leidos, DynCorp, KBR and many others.
Fourteen companies have won spots on a five-year, $1.89 billion contract to supply initial spare parts for the KC‐46 aerial refueling fleets of the U.S. Air Force and international military customers. The competition for individual delivery orders under the indefinite‐delivery/indefinite‐quantity contract will begin after the service branch issues the minimum orders to all vendors, the
The Department of Defense continues to issue accelerated payments meant to help defense contractors withstand the impact of the COVID-19 pandemic even after the White House declared the health crisis over, Bloomberg reported Monday. In March 2020, DOD issued a memo that increases the progress payment rates for large businesses from 80 percent to 90
David Bradley, program director at General Dynamics‘ (NYSE: GD) mission systems business since June 2021, has been promoted to a vice president position within the same unit. The 34-year industry veteran will be responsible for strategy and business development functions related to GDMS’ space and intelligence systems portfolio, according to a LinkedIn post on his