KippsDeSanto: Govt Tech Sector Eyes Increased Scale, Expanded IT Capabilities Via M&As

KippsDeSanto & Co. said it believes General Dynamics™ (NYSE: GD) acquisition of CSRA shows the continued focus of government technology sector buyers on efforts to build up scale and expand next-generation information technology capabilities through mergers and acquisitions.

General Dynamics™ IT business will realize approximately $10 billion in annual revenue following the completion of the deal that will make the company the second-largest government IT services contractor after Leidos (NYSE: LDOS), the Tysons Corner, Virginia-based investment bank said Monday.

KippsDeSanto noted that it considers TransDigm Group™s planned $525 million purchase of Extant as the aerospace and defense deal of this year™s first quarter.

Extant expects aircraft aftermarket sales to account for 80 percent of its fiscal 2018E revenue and that the majority of its full-year aftermarket revenue to come from the military-end market.

KippsDeSanto cited other notable M&A transactions for the quarter ended March 31 and those include Curtiss-Wright™s (NYSE: CW) 212.5 million cash acquisition of the Dresser-Rand government business from Siemens; ASGN Inc.™s (NYSE: ASGN) $775 million purchase of ECS Federal; and KBR™s (NYSE: KBR) pending buy of Stinger Ghaffarian Technologies.