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Apr 17, 2014
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2014 Capital Deployment Strategies for Government Contractors

Executives and boards of directors of publicly traded government contractors are constantly evaluating capital deployment alternatives in an attempt to balance growth with providing returns to investors. In general, companies have four primary alternatives, including (i) pay down debt; (ii) make acquisitions; (iii) buy back previously issued shares; and (iv) pay dividends. Unless the company is overleveraged, equity research analysts and the investment community view the later three alternatives as the more attractive capital deployment strategies since the current cost of debt is relatively inexpensive. The variety of capital deployment strategies in the industry illustrates several interesting trends in today’s government services M&A market. The exhibits below track historical capital deployment activity across government contracting sub segments over the past five years.


The Tier 1 Contractors on average generated $2.4B of leveraged free cash flow in 2013, but cumulatively only Continue reading »

Apr 14, 2014
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Government contractors: Feeling like you’re fighting for decreasing dollars? It’s time to #RethinkEverything to compete

thinking-manWith tightening budgets, increased oversight, and higher costs of doing business, government contractors need to rethink all aspects of their business. Aronson’s new white paper, “<RETHINK> Everything: The New Imperative for Federal Government Contractors,” offers insights for government contractors who want to thrive in this new era:

  • Acquisition trends and strategies for cost containment
  • Revenue diversification and adapting to today’s budget priorities
  • M&A trends and liquidity strategies
  • Heightened contract compliance enforcement
  • Game-changing cybersecurity regulations
  • Improving efficiency in back office processes and systems
  • Tax strategies for adapting to state sourcing/collection efforts
  • Talent management and retention trends

Download this insightful white paper to learn how the larger market trends are already affecting government contracting and what aspiring contractors can do to succeed.

Mar 19, 2014
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Aronson Capital Partners Advises BIOQUAL, Inc. in its Acquisition of the Preclinical Services Business of Advanced Bioscience Laboratories, Inc.

Aronson Capital Partners (“ACP”) is pleased to announce the acquisition of the Preclinical Services Business of Advanced Bioscience Laboratories, Inc. (ABL) by BIOQUAL, Inc. ACP served as the exclusive financial advisor to BIOQUAL in this transaction.

Aronson Capital Partners is a leading M&A advisor to middle-market defense and government technology solutions providers. ACP provides a full range of M&A and corporate finance advisory services to enable our clients to achieve their growth and liquidity objectives. With our exclusive focus on the Government Services and Technology sector, we are able to provide clients with a unique industry perspective and access to longstanding relationships with the most active strategic buyers

Mar 12, 2014
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ACP’s February Market Update: Q4 Earnings Calls Continued: Public Contractors Actively Seeking M&A

downloadPublic companies included in our government services index continued to report CY 13 Q4 earnings throughout the month of February. Since the publication of our January newsletter, executives of ICF International, ManTech, NCI, and Exelis held their quarterly conference calls and expressed a similar sense of optimism in the federal marketplace. The leadership teams of public contractors are finally seeing the uncertainty that dominated the government contracting community be replaced with a refreshing sense of stability and growth, as illustrated in the remarks below:

“ManTech’s revenue and earnings declined in 2013 because of the government’s accelerated withdrawal from Afghanistan and the unprecedented levels of uncertainty in the government services market. Unsure of their Continue reading »

Mar 11, 2014
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UPCOMING ACP EVENT: Successful Planning Strategies for Government Contractors in 2014 and Beyond

Join Aronson Capital Partners, Piliero Mazza, and Signature Estate & Investment Advisors on March 25th for a breakfast workshop offered exclusively to government contractors. Industry experts will share trends in M&A and discuss creative planning strategies for liquidity events in this post-sequestration, post-shutdown, LPTA environment. This is a great opportunity to think about the intersection of your business and personal financial goals as you plan for the future.

Topics will include:

  • Trends for M&A in 2014
  • What deals look like post-sequestration and post-shutdown
  • Real ways to create value in this lowest price technically acceptable environment
  • How to position your business to reap the benefits of a liquidity event
  • Strategic and structuring considerations that significantly impact the building of a saleable business
  • Contingency planning for the next 3-5 years
  • Successful Exit = Successful Estate Plan


Philip J. McMann, Partner 


Dean S. Nordlinger, Partner


 John P. Keenan, Partner



Date:            Tuesday, March 25, 2014

Price:            FREE

Time:            8:00am – 10:00am

Location:       The Tower Club – 8000 Towers Crescent Drive, Suite 1700, Vienna VA 22182


Feb 14, 2014
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Q-4 Earnings Calls : Government Services Index Cautiously Optimistic About 2014

When we last checked in on our government services indices back in October 2013 following Q3 earnings calls, our contractors were fresh off 16 days of sequestration, the budget debate had been postponed for another few months, and the overarching theme across all calls could be summed up in one word: uncertainty. Though this uncertainty surrounding long-term budget cuts has not completely subsided, the January 2014 bipartisan appropriations bill certainly had many executives breathing a (slight) sigh of relief during Q4 2013 earnings calls, released in late January and early February:

“Sequestration is eliminated for fiscal years 2014 and 2015 and replaced with reduced spending levels. The law also removed the across-the-board spending reduction methodology previously in place under sequestration and restored the ability for government agencies to move funds and discreetly allocate resources to higher priority areas, a critical revision that we have been seeking since the Budget Control Act was established back in 2011.”

 – Lockheed Martin Corporation

“We are pleased that a fiscal year ’14 budget agreement has been signed… providing some near-term sequestration relief. This averts another disruptive government shutdown and provides our customers at least a near-term planning horizon.”

– The Boeing Company

“The end of sequestration does mean our customers can now allocate funds to the critical programs we support. We know that Cyber and C4ISR are going to see increases in 2014 and 2015.”

– KEYW Corporation

Companies not reporting as of date of publication: EGL, ICFI, LDOS, MANT, NCIT, VSEC, XLS

While cautiously optimistic about the federal budget going into 2014 and beyond, several contractors echoed one harsh Continue reading »

Jan 22, 2014
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Key Observations from FireEye’s ~$1.0B Acquisition of Mandiant

FireEye’s $1.0B acquisition of Mandiant marked the 2nd cyber security transaction in the past four months with a publicly disclosed valuation in excess of 9.0x TTM revenue. However, unlike Sourcefire, which Cisco Systems acquired in October 2013, Mandiant has more extensive ties back to the federal sector and a greater composition of services work (vs. products). Therefore, it is more relevant to take a detailed look into the drivers of this valuation and the implications for the government contracting community.

Mandiant was founded in 2004 and is the undisputed leader in security incident response management. The company received significant publicity in February 2013 after it published a report directly implicating China in recent cyber espionage attacks. However, prior to its publicized reports, the company was recognized across the cyber security community as the “Navy seal team” of cyber security breaches, and had secured equity investments from prominent private equity firms Kleiner Perkins Caufield & Byers and One Equity Partners LLC. Mandiant Continue reading »

Jan 22, 2014
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Aronson Capital Partners’ Market Update: M&A Activity: 2013 Summary & 2014 Outlook

2013 M&A Recap

M&A deal volume in the Government Services market dropped by 22% this year as compared to 2012 due to sequestration and budget uncertainty which has resulted in a lack of visibility in a target company’s business for both buyers and sellers. However, signs of a revival in M&A activity have begun to develop in the last couple months of 2013 as the deal count significantly increased compared to the rest of the year. Enhanced revenue visibility and a better understanding of the new environment played key roles in this increase.

In 2012, the market experienced a similar spike in deal volume in the last months of the year. This was primarily driven by the expiration of tax breaks effective January 1, 2013. Unlike 2012, the increase in CY Q4 2013 is expected to continue Continue reading »

Dec 17, 2013
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M&A Deal Volume is Picking Up!

November showed signs of a strengthening M&A environment as announced deals in the government services sector totaled eight for the month, which is 60% higher than October and in line with November of last year.  The market has continued to see deal volume pick up in the first part of December.  Over the last 30 days, ACP has closed two transactions:

ACP Recent Deals:

  • The sale of Kimmich Software Systems to Vistronix
  • The divestiture of certain Assets from a Tier 1 Defense Contractor to a Confidential Buyer

As shown in the chart on the right, government services deal volume in Q4 is expected to account for more than a third of the government services deals in 2013.  Part Continue reading »

Dec 6, 2013
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Washington Technology reports: Aronson Capital Partners Advises the sale of KSSI to Vistronix

Vistronix closed its second acquisition this week, adding Kimmich Software Systems Inc. to expand its work with the U.S. intelligence community.

The acquisition is the second in just two days for Vistronix, which on Wednesday acquired NetCentric Technology, a company with big data, cyber and cloud computing skills.

Terms of the acquisition of Kimmich, which goes by the initials KSSI, were not disclosed.

Vistronix said in a statement that the acquisition of KSSI brings offerings such as cyber operations, signals processing, data analytics, software development and systems engineering.

With this transaction now complete, we are strategically positioned to accelerate Vistronix’s vision to expand our capabilities in the intelligence community and to deliver mission-critical solutions that enable efficient mission operations and ensure the protection of intelligence assets and information,” said Deepak Hathiramani, CEO of Vistronix, in a statement.

KSSI brings with a prime contractor spot on the National Security Agency’s Set-Aside for Small Business contract, known as NSET II. The multiple-award contract is used business, engineering, IT, operations support, and training services, according to an NSA website.

KSSI was founded in 1994 by Jeanne Kimmich Roberts.

The investment bank Aronson Capital Partners served as an advisor to KSSI.


See the original article here:


Aronson Capital Partners is a leading financial advisor to government services and technology firms. We exercise our special domain expertise in the Defense, Intelligence, and Federal Civilian markets to achieve exceptional results for our clients. In addition to completing more than 100 transactions in the federal sector, our principals have decades of executive level, hands-on experience in the industry – a key differentiator that leads to success.