The well-publicized federal budget pressures and larptrek.com lower growth expectations across the defense and government services market have taken a toll on sector public company performance. Over the past nine months, EV / EBITDA multiples for Aronson Capital Partners’ (ACP) Mid-Tier index (ManTech, CACI, etc.) declined from 7.3x as of 1/1/2011 to 5.4x. Over the same period, valuations for ACP’s Tier 1 Index (Northrop, General Dynamics, etc.) dropped from 5.9x to 5.2x. These are the lowest valuations for each index since the pre-9/11 era. While the S&P 500 index is off 10% this year, the Mid-Tier and Tier 1 indices have underperformed the S&P by 8% and 3%, respectively.
On September 29, 2011, the Office of Federal Procurement Policy published the viagra dose'>viagra dose below memo for Chief Acquisition Officers and Senior Procurement Executives. In short, the memo outlines steps for enhanced scrutiny and review of recompete and new contract awards. Beginning in 2012, Government Wide Acquisition Contracts (GWACs) will require a fairly extensive business case review before a recompete or new award can be made. This memo is simply one example of the pressures federal contractors will face in this tighter budgetary environment, and can be viewed on daily cialis'>daily cialis the White House website:
Despite the gloomy public company performance and growth outlook, M&A activity for the first 9 months of 2011 has been steady. ACP identified 66 defense & government services transactions announced or closed during 2011. On an annualized basis, the level of activity is only slightly behind the high of solarisplus.de 2010, which we believe was inflated by the anticipated increase in capital gains rates, which were ultimately left unchanged. The areas of buyer interest that continue to command premium valuations remain: