We hope that this newsletter finds you in good health and enjoying the summer. With the first half of 2009 behind us, we thought it would be an appropriate time to comment on the state of the federal M&A market -- where we have been, where we are now, and what we can expect for the remainder of the year.

While the federal sector undoubtedly faces some daunting challenges ahead, not the least of which is the nation’s unsteady economic outlook, we see signs of renewed optimism and an increasingly positive tenor throughout the industry. While total M&A volume is down a bit from record highs, federal services deals have continued to get done, especially for those well positioned companies that successfully planned ahead for their eventual exit. To that end, we also share a few tips for companies that might be considering a sale a year or two from now and want to prepare themselves for an optimal exit.

During the current economic downturn and consequent hangover, the U.S and global economic environment has undergone a unique and extraordinary transformation. While the financial crisis has certainly affected the broader M&A markets, the impact has been uneven sector by sector. The current period of sustained turbulence and shifting political winds continues to propel consolidation in the federal sector due to the relative strength of the government sector to other markets. For the detailed, expanded outlook, read further…

You’ve been building your business for many years and feel the time might be right to take your company to market, cash in, and sail off into the sunset. Before you take the plunge, take a step back and reflect on the state of your organization to ensure you’ve eliminated, or at least mitigated, the perceived risks that a buyer will build its valuation around. Focusing on the strategic points leading up to the sales process, as described in this article, will improve the likelihood that your company will sell for top dollar. Click to learn more about these strategies.

Aronson Capital Partners has been one of the most active M&A advisors in the federal market in 2009. Of the 24 M&A deals closed in the government services sector in the first half of 2009, Aronson Capital Partners has completed five, or 21%, of the transactions. With two others already under LOI, and five active sell-side assignments, our leadership position and track record of success in the federal and defense sector continues to be a source of confidence for our clients in both good and challenging markets.

Due to our industry focus and operational experience, we offer clients a unique perspective of the business and its marketplace, strong relationships with strategic and financial buyers and capital providers, and an unmatched track record of achieving superior results for shareholders.

In addition to our M&A advisory services, we recently served as the exclusive advisor on the management buyout and recapitalization of a national security services firm, demonstrating our ability to raise capital for clients during volatile markets.

Current market dynamics mark an opportune time for owners of privately held companies to explore their strategic options. We are happy to share our insights on enhancing shareholder value and welcome the opportunity to meet with you and discuss the current market outlook.