Q3 2015 Government Contractor Market Update
August 31, 2015 - By: Matt Roberson
Federal Contractors Using M&A To Trim and Shape Services
Federal contractors are using M&A to trim and shape their portfolios as the government tightens IT spending and increases competition among smaller contractors. As a result, many large primes are repositioning to ensure presence in markets where they can differentiate themselves with services rather than pricing.
This trend is evidenced by Lockheed Martin’s pending acquisition of Sikorsky Aircraft from United Technologies. The Sikorsky acquisition points to a shift in strategy as large primes reevaluate and reshape offerings to mitigate the effects of pricing pressures, reduction in federal spending, and a shift to LPTA contracts.
SC&H Capital expects this trend to continue as large contractors shift and refocus to optimize their competitive position in the market.
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