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Executive Mosaic’s Weekly GovCon Round-up: October’s M&A Activity

Weekly Roundup
October 23 – October 27 2017

A Note From Our President & Founder Jim Garrettson

With October coming to a close, let’s take a look at the most significant M&A activity that took place over the course of this month.
Notable M&A activity includes:

  • Serco Inc. agreeing to purchase BTP Systems
  • CSRA purchasing Praxis Engineering
  • DXC agreeing to merge its public-sector business with Vencore and KeyPoint Gov’t Solutions
  • Parsons’ purchase of Williams Electric
  • MDA closing its $3.6B acquisition of DigitalGlobe
  • Boeing purchasing Aurora Flight Sciences
  • General Atomics acquiring Syntronics
  • ManTech completing its purchase of InfoZen

On October 24thSerco Incannounced that its North American arm had agreed to purchase BTP Systems for an undisclosed amount. Serco is acquiring BTP Systems in a move to expand its client base and its command, control, communications, computers, combat systems, intelligence, surveillance and reconnaissance services for the federal government. Serco expects to close the acquisition by the end of 2017, subject to approvals and other customary closing conditions. Dave Dacquino, Serco Inc. chairman and CEO, said that acquisition complements the company’s C5ISR business, which supports ship, shore and hardware integration projects through naval sustainment and modernization services.

On October 17thCSRA agreed to purchase Praxis Engineering Technologies for approximately $235 million in cash. CSRA acquired Praxis in order to expand its mission applications development capabilities and increase its presence in the intelligence community. CSRA will absorb at least 350 Praxis employees and will operate the company as a wholly owned subsidiary. The deal is expected to be completed by the end of December, subject to antitrust approval under the Hart-Scott-Rodino Act and other customary closing conditions. Larry Prior, CSRA president and CEO, said the transaction will help CSRA support clients in their mission application modernization efforts.

As mentioned in a previous round upDXC Technology has agreed to merge its U.S. public sector business with Vencore and KeyPoint Government Solutions. The merge will result in a new entity valued at $4.3 billion and will be positioned as a “top five” systems integration company within the government IT services sector. Two Wash100 inductees, Mac Curtis and Marilyn Crouther, will hold leadership positions within the combined entity. Curtis, president and CEO of Vencore, will become CEO and Crouther, SVP and general manager of DXC’s public sector business, will become chief operating officer.

Parsons announced on October 10th that it had purchased Williams Electric for an undisclosed sum in an effort to bolster its control systems business. Chuck Harrington, Parsons chairman and CEO, said the acquisition is part of the company’s strategy to guard its operational technologies and critical infrastructure assets against cyber threats. “Parsons’ existing contractual relationships with numerous customers within the departments of Defense, Energy and Veterans Affairs… are ideal environments for our now expanded control systems offerings,” said Carey Smith, Parsons federal group president and Wash100 inductee.

MacDonald, Dettwiler and Associates closed its $3.6 billion acquisition of DigitalGlobe on October 5th, thus creating a new company that will provide integrated satellite, imagery and geospatial services to both the commercial and government markets. MDA said that the newly combined entity will be named Maxar Technologies Ltd. Howard Lance, president and CEO of MDA, said Maxar will seek to utilize the increased scale, diversified revenue base and integrated sales channels from the combination of MDA and DigitalGlobe. Lance will hold the same leadership roles at Maxar, which will use the space technology brands of MDA, Digital Globe, Space Systems Loral and Radiant before the introduction of a new corporate branding by the end of 2017.

Also on October 5th was Boeing’s announcement that it had agreed to purchase Aurora FlightSciences for an undisclosed sum as part of its efforts to speed up the development of autonomous technology for aerospace vehicles. Boeing said that it plans to integrate Aurora into the aerospace and defense contractor’s engineering, testing and technology segment. Greg Hyslop, chief technology officer and senior vice president of Being Engineering Test & Technology, said the combined company will build autonomous platforms for both the military and commercial markets.

On October 2ndGeneral Atomics purchased Syntronics for an undisclosed sum. Syntronics’ knowledge and experience in the development of electromechanical technology platforms will compliment General Atomics current abilities. General Atomics announced that it will run Syntronics as part of its electromagnetic systems group. Scott Forney, president of General Atomics Electromagnetic Systems, said the company has previously worked with Syntronics to build the guidance electronics unit and related systems for the railgun hypersonic projectiles.

ManTech International completed its $180 million cash acquisition of InfoZen on October 2ndManTech said that it will be running InfoZen as part of its mission solutions and services group, which is headed by Daniel Keefe, and expects the IT services contractor to contribute approximately $25 million to fiscal 2017 revenue. Kevin Phillips, president and chief operating officer at ManTech and an inductee into the 2017 Wash100, said the company is pleased to finalize the transaction and welcome InfoZen into ManTech.

THIS WEEK’S TOP NEWS STORIES

Weekly Contract Awards
This week’s top GovCon contract awards. Lockheed Martin, Northrop Grumman, General Atomics, American Systems, Aermor, Qualis, United Launch Alliance and many others.
DHA Awards 36 Spots on Potential $7.5B Military Healthcare Staffing IDIQ
The Defense Health Agency has awarded 36 small-business positions on a potential five-year, $7.5 billion contract to provide medical staffing services to U.S. military treatment facilities.
Report: Army Taps 4 Firms for Patriot Radar Replacement Concept Design Contracts
The U.S. Army has awarded separate contracts to four companies to develop concept designs that will be used to determine the requirements for a new platform to replace its Patriot air-and-missile defense radar system.
Executive Spotlight: Interview with Judy Bjornaas, EVP/CFO of ManTech Int’l
“When you’ve been in the government contracting business for nearly 50 years, as ManTech has, every aspect of working with the customer is, by definition, second nature.”
James Mattis Asks Congress to Authorize New BRAC Round
Defense Secretary James Mattis has called on Congress to authorize another round of base realignment and closures.
House-Senate Conference Committee to Begin Negotiations on Fiscal 2018 NDAA Reconciliation
House and Senate conference members will begin to reconcile two versions of the fiscal 2018 National Defense Authorization Act after the upper chamber voted Tuesday to start formal negotiations on the bill.
Serco Inc. to Buy BTP Systems in Govt C5ISR Services Expansion Push; Dave Dacquino Comments
Serco’s North American arm has agreed to purchase Ludlow, Massachusetts-based BTP Systems for an undisclosed amount in a move to expand its client base and command, control, communications, computers, combat systems, intelligence, surveillance and reconnaissance services for the government sector.
Leidos Gets $728M Contract to Help Maintain Afghan AF Aircraft, Helicopters; Tim Reardon Comments
Leidos will provide maintenance support for helicopters and fixed-wing aircraft fleets of Afghanistan’s air force and special mission wing unit through a potential $728 million contract the U.S. Army awarded in August.
NASA Issues 24 Awards for $3B General Construction Follow-On Vehicle
NASA has awarded 24 contracts under a potential eight-year, $3 billion indefinite-delivery/indefinite-quantity procurement vehicle for general construction services.
Matt Donovan: USAF to Spend $2B Bomber Fund Request on Software Devt, Recruitment
Matt Donovan, Air Force undersecretary, has said the service’s $2 billion funding request for the B-21 bomber aircraft program for fiscal year 2018 would be spent on software development and staffing efforts at Northrop Grumman.

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