Q1 2016 Government Contractor Market Update

2015 was a year of platform consolidation and portfolio shaping in the defense sector, as government contractors attempted to narrow focus on critical platforms and boost competitiveness and profitability by divesting non-core business units.

The year ended with an exceptionally active M&A environment, with several headline acquisitions driving up the total combined deal volume for 2015, such as:

• CACI’s acquisition of L-3’s National Security Solutions, Inc. for $550 million.
• The $431 million Comtech / TCS merger announced in late November.
• Lockheed Martin’s acquisition of Sikorsky Aircraft.

Q4 2015 also saw a number of transactions involving private equity firms, continuing the trend from prior quarters.

SC&H Capital expects the M&A marketplace to remain active in 2016, with continued consolidation and divestitures across the industry as contractors maintain a strong appetite for acquisitions.

Learn more in this newsletter.