july 2014 market update - aronson llc · sales accounted for only about 15% of boeing’s defense...

805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com

July 2014 Market Update: Defense Technology & Government Services

Investment Banking

Larry A. Davis Partner

(301) 231-6225 [email protected]

Philip J. McMann Partner

(301) 231-6202 [email protected]

Tim P. Schmitt Vice President (301) 222-8285

[email protected]

http://www.aronsonllc.com/

Q2 Earnings Calls: A Game of Efficiency


With Cautionary Spending, Contractors Turn to Execution for Sustainability After fighting off the sequestration woes in late 2013, government contracting firms continue to provide mixed signals. Midyear Q2 earnings released over the past month revealed not a changing Aerospace and Defense landscape, but rather a need for more efficient business models executed by government contractors. While award activity for many has risen off the sequestration floor, the spending outlook by the Pentagon has continued to be cautious and consequently cash flow for most firms isn’t coming in as strong as a year ago (Q2 2013). Companies like Boeing, Raytheon and Booz Allen have experienced modest success maintaining backlog, but others like ManTech have been constrained by new business award delays and the Afghanistan draw down. As a result, this month’s release of top Aerospace and Defense contractors’ earnings were marked by generally lower revenues, and in response, companies such as Lockheed Martin, Northrop Grumman, and Booz Allen Hamilton cited strong execution and cost cutting strategies for stronger returns.

Lockheed Martin

Northrop Grumman

Booz Allen Hamilton

"Our sound strategy, diverse portfolio and focus on affordability are yielding results and delivering value to our customers and shareholders."

"Second quarter results demonstrate our team's continued commitment to strong execution. We continue to focus on performance, cash deployment and portfolio alignment as the primary value creation drivers for our shareholders, customers and employees.”

“While our revenue decrease during the quarter was due to a climate of continued cautionary spending by the federal government, our staff productivity remains high and profitability on contracts and task orders remain strong.”


Q2 Earnings Calls: A Game of Efficiency


Market Trends Increased Operating Efficiency Increased M&A Investments Increased International Sales

Hostile Global Environment Opportunities Lower Government Spending

While cost cutting and other operating efficiency strategies seem to have produced relatively stable quarters, the Aerospace and Defense landscape has a blurred vision moving forward. Despite what some, such as KEYW Chairman and CEO Len Moodispaw, declared as a “strong sequential rebound,” the current market is changing in terms of spending levels, both domestically and abroad. While the Pentagon may be reducing spending, that doesn’t necessarily mean pessimism for the industry as the international market looks more lucrative. In the past, international sales accounted for only about 15% of Boeing’s defense unit’s backlog; today, that figure is up to 30% or 35%. Likewise, retiring Booz Allen Hamilton Chairman and CEO Ralph Shrader commented on expansion and diversification saying; “Growth in our commercial and international markets is accelerating, and we have the opportunity to invest in a significant expansion in selected countries in the Middle East in anticipation of further opportunities there.” In addition to international sales growth, companies also see the recent global unrest and hostilities as a potential catalyst for continued business.

In light of constrained spending by the Pentagon, companies are adjusting best by maximizing internal productivity and maintaining margins through more efficient execution. Of the 12 companies profiled, 6 had increased second quarter EPS from 2013 to 2014. General Dynamics’ CEO, Phebe Novakovic, declared her optimism, “we are off to a good start, ahead of our internal plan and ahead of external expectations, leading to an improved outlook for the year." Raytheon reported a similar outlook as CEO Thomas A. Kennedy stated; "Demand for Raytheon’s innovative and affordable solutions from our global customers was strong in the quarter, and international opportunities in the second half of the year are significant.”

From an M&A standpoint, deal activity continues to exceed 2013 levels, in large part because of a better spending environment, coupled with strategic portfolio enhancements and private equity investments. Heading into the second half of 2014, we are optimistic about Aerospace and Defense

M&A. Strategic buyers and private equity firms have plenty of access to capital, and there is a greater level of clarity for most small business owners (compared to 2013 and even 1H 2014).

ManTech Chief Financial Officer Kevin M. Phillips summarized their results in their release stating, "The second quarter financial results were consistent with our expectations, but new business awards continue to be delayed. We expect that awards in the remainder of the year will support growth in 2015. Cash flow should be very positive for the remainder of the year, which will further strengthen our balance sheet for additional acquisitions."

Amidst earnings from Aerospace and Defense contractors, the market’s reaction to L-3 Communications’ release was exacerbated by its announcement that it had terminated four employees as part of an ongoing internal review that revealed overstatement of net sales and deferred cost overruns in the company's aerospace business. A report published by the Wall Street Journal stated that L-3 Communications, "disclosed accounting irregularities linked to an aerospace logistics support contract, signaling it would take an initial $84 million pretax charge as it cut its full-year profit guidance. The company said the problems related "primarily" to a Defense Department contract running from 2010 to January 2015, with overstated sales and cost overruns and alleged "misconduct [that] included concealment from L-3's corporate staff and external auditors."

On this news, shares of L-3 fell almost $15 per share to $104.96.


Recent Transactions


Haystax Technology, Inc. acquires NetCentrics Corporation

On August 4, 2014, Haystax Technology, Inc., a next- generation analytics and cloud computing solutions developer, announced its acquisition of NetCentrics Corporation. NetCentrics serves primarily federal clientele, including the Department of Defense, and is a provider of cybersecurity and network management solutions.

The acquisition is intended to better position Haystax in the defense and intelligence communities as a premier provider of big data analytics, cloud computing, real-time threat assessment, cybersecurity, and IT enterprise management. William B. Van Vleet III, CEO of Haystax, said of the strategic acquisition; “The NetCentrics team has proven expertise, strong leadership and complementary skills and capabilities. Their size, scale and infrastructure, along with a strong contract base, provide a formidable foundation for acceleration of growth in a number of critical areas.” NetCentrics will operate as a wholly owned subsidiary of Haystax, maintaining its current brand, employee base, and customer portfolio.

Terms of the deal were not disclosed.

Novetta Solutions, LLC acquires Global News Intelligence On July 29, 2014, Novetta Solutions, LLC, a portfolio company of Arlington Capital Partners, announced its acquisition of Global News Intelligence (GNI), a media analytics firm serving both private and government customers in the US and abroad. GNI is a recognized leader in the open source intelligence analytics market supporting the Department of Defense, the Department of State and commercial customers.

Novetta, a provider of advanced analytics technology specializes in big data with focus on cyber, identity, and social analytics, sees the acquisition as a strategic move in expanding its presence in the sentiment analytics and open source intelligence markets. “GNI’s innovative approach to traditional and social media analytics and open source intelligence combines deep subject matter expertise with scalable technology that maps very well to Novetta’s advanced analytics solutions,” said CEO Peter B. LaMontagne. GNI CEO Matthew Ennis furthered confidence in the deal adding, “The integration of our respective capabilities makes great sense in consideration of the emerging requirements of our customers. Novetta’s world-class technology will allow us to scale quickly, invest more in our technology and address a wider customer base.” Following the transaction, the companies plan to integrate Novetta and GNI technology solutions to enhance offerings to their respective customers.


BAE Systems plc acquires Signal Innovations Group, Inc. On July 31, 2014, BAE Systems plc (LSE:BA.L) entered a definitive agreement to acquire privately held Signal Innovations Group, Inc., a Durham, North Carolina-based provider of imaging technologies and analytics to the US intelligence and defense communities.

The acquisition is said to serve multiple strategic advances including a bolstering of services as well as expanding customer base. "Combining SIG's technologies with our existing intelligence tools and analysis capabilities will enhance our customers' ability to analyze tactical and strategic intelligence from around the globe," said DeEtte Gray, President of BAE Systems' Intelligence & Security sector. "Together, we also have the potential to leverage our capabilities and bring this technology to a number of innovative commercial applications in an affordable way."

The proposed acquisition is conditional upon receiving certain regulatory approvals. It is anticipated the proposed acquisition will be completed during the third quarter of 2014.


Acquirer

Target

Acquirer

Target

Acquirer

Target


Government Services Industry Performance


Last 12-Month Returns

Last 12-Month Enterprise Value / EBITDA

Source: CapIQ Mid-Tier Index: BAH, LDOS, XLS, CACI, MANT, EGL, ICFI, KEYW, VSEC, NCIT Tier-1 Index: BA, LMT, GD, RTN, NOC, LLL

80

100

120

140

160

Aug-13 Nov-13 Mar-14 Jul-1

Inde

xed

Perf

orm

ance

LTM 7/31/2014 Returns

Tier-1: 19.1% S&P: 13.1% Mid-Tier: 6.9%

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

Aug-13 Nov-13 Mar-14 Jul-14

Ente

rpris

e Va

lue/

LTM

EBI

TDA

7/31/2014 EV/LTM EBITDA

Tier-1: 8.9x Mid-Tier: 8.6x


Public Company Comparables


USD in Mi l l ions , exc luding share prices

Price Annual % of Equ i ty En terprise LTM LTMCompany 07/31/14 High Low High Value Value Rev. EBITDA Rev. EBITDA Rev. EBITDA CY13A CY14P CY13A CY14P

Mid-Tier Federal Service Providers

Booz Allen Hamilton Holding Corporation 22.24$ 25.32$ 16.61$ 87.9% 3,249$ 4,585$ 5,373$ 531$ 0.9x 8.6x 0.9x 8.8x 10.0% 9.9% (2.2%) (5.9%)

Leidos Holdings, Inc. 36.94 64.36 34.00 57.4% 2,762 3,912 5,495 352 0.7x 11.1x 0.8x 8.9x 6.3% 8.7% (10.8%) (12.1%)

Exelis Inc. 16.84 21.44 14.31 78.5% 3,192 3,561 4,676 640 0.8x 5.6x 0.8x 6.0x 13.9% 13.1% (12.8%) (5.8%)

CACI International Inc. 68.99 80.77 62.86 85.4% 1,621 2,893 3,572 331 0.8x 8.7x 0.8x 9.0x 9.2% 9.1% (4.3%) (1.6%)

Science Applications International Corporation 41.77 45.70 29.40 91.4% 2,004 2,270 3,959 247 0.6x 9.2x 0.6x 8.8x 6.2% 6.8% (13.8%) (6.7%)

ManTech International Corporation 27.00 31.32 26.64 86.2% 1,006 1,030 1,974 139 0.5x 7.4x 0.5x 7.7x 7.4% 6.8% (10.5%) (18.4%)

Engility Holdings, Inc. 34.56 46.25 27.87 74.7% 609 989 1,385 120 0.7x 8.3x 0.7x 7.5x 9.1% 8.2% (15.0%) 4.6%

ICF International Inc. 34.57 44.34 30.53 78.0% 689 796 960 87 0.8x 9.1x 0.7x 7.5x 9.0% 9.7% 1.3% 9.8%

The KEYW Holding Corporation 13.10 23.09 9.71 56.7% 483 568 281 15 2.0x 37.4x 1.7x 14.5x 7.0% 7.8% 22.7% 0.4%

VSE Corp. 59.57 74.86 39.98 79.6% 319 386 461 63 0.8x 6.1x 0.9x 5.9x 13.6% 14.7% (13.7%) (3.0%)

NCI, Inc. 8.98 13.12 4.75 68.4% 116 104 325 19 0.3x 5.5x 0.3x 5.5x 5.9% 6.9% (9.8%) (5.3%)

Mean 0.8x 10.6x 0.8x 8.2x 8.9% 9.2% (6.3%) (4.0%)

Median 0.8x 8.6x 0.8x 7.7x 9.0% 8.7% (10.5%) (5.3%)

Tier 1 Prime Contractors

The Boeing Company 120.48$ 144.57$ 101.77$ 83.3% 86,819$ 84,541$ 88,425$ 8,280$ 1.0x 10.2x 0.9x 8.3x 9.4% 10.4% 6.0% 3.5%

Lockheed Martin Corporation 166.97 171.36 120.75 97.4% 52,694 55,427 44,836 6,081 1.2x 9.1x 1.3x 8.4x 11.8% 14.8% (3.9%) (1.2%)

General Dynamics Corp. 116.77 122.17 82.23 95.6% 39,038 39,107 30,809 4,247 1.3x 9.2x 1.3x 9.0x 13.6% 14.3% (0.9%) (3.1%)

Raytheon Co. 90.77 102.33 72.20 88.7% 28,204 28,930 22,921 3,404 1.3x 8.5x 1.3x 7.4x 14.1% 16.1% (2.9%) (4.1%)

Northrop Grumman Corporation 123.27 128.46 91.97 96.0% 25,633 28,086 24,150 3,710 1.2x 7.6x 1.2x 7.3x 14.7% 15.5% (2.2%) (3.9%)

L-3 Communications Holdings Inc. 104.96 127.27 90.07 82.5% 9,051 12,765 12,210 1,464 1.0x 8.7x 1.1x 8.7x 11.9% 11.7% (3.9%) (4.1%)

Mean 1.2x 8.9x 1.2x 8.2x 12.6% 13.8% (1.3%) (2.1%)

Median 1.2x 8.9x 1.2x 8.3x 12.7% 14.5% (2.6%) (3.5%)

Defense System / Electronics F irms

Rockwell Collins Inc. 73.27$ 84.06$ 65.76$ 87.2% 9,899$ 11,973$ 4,932$ 1,111$ 2.4x 10.8x 2.3x 9.7x 22.5% 23.5% (1.6%) 10.6%

Harris Corporation 68.27 79.32 55.46 86.1% 7,271 8,345 5,012 1,086 1.7x 7.7x 1.7x 7.7x 21.8% 21.4% (7.0%) (0.8%)

Teledyne Technologies Inc. 91.20 102.40 76.26 89.1% 3,423 3,876 2,339 347 1.7x 11.2x 1.6x 9.7x 14.2% 15.9% 9.9% 2.9%

Cubic Corporation 43.86 56.92 43.15 77.1% 1,175 1,183 1,340 98 0.9x 12.1x 0.8x 8.0x 8.8% 9.5% (3.4%) 8.0%

Kratos Defense & Security Solutions, Inc. 7.30 9.18 6.32 79.5% 419 1,008 898 67 1.1x 15.1x 1.1x 9.4x 8.3% 10.4% (1.9%) (1.2%)

Mercury Systems, Inc. 11.05 14.40 8.42 76.7% 367 322 218 8 1.5x 42.1x 1.4x 9.0x 2.4% 14.1% (4.6%) 4.6%

Mean 1.5x 16.5x 1.5x 8.9x 13.0% 15.8% (1.4%) 4.0%

Median 1.6x 11.6x 1.5x 9.2x 11.5% 15.0% (2.7%) 3.7%

Foreign Contractors

Airbus Group N.V. 58.03$ 76.73$ 56.62$ 75.6% 45,469$ 45,538$ 83,217$ 6,571$ 0.5x 6.9x 0.6x 5.7x 7.0% 9.6% 9.6% (2.4%)

BAE Systems plc 7.22 7.95 6.32 90.8% 22,799 24,740 27,358 3,287 0.9x 7.5x 0.9x 7.0x 11.2% 12.4% 3.0% 2.3%

Finmeccanica SpA 9.25 9.94 5.02 93.1% 5,347 12,229 22,018 1,101 0.6x 11.1x 0.7x 5.7x 5.6% 11.5% 0.9% (16.8%)

Thales SA 56.91 66.92 49.47 85.0% 11,666 11,877 19,382 1,974 0.6x 6.0x 0.7x 5.9x 9.7% 11.4% 4.7% (12.3%)

Cobham plc 4.94 5.56 4.29 88.9% 5,575 6,347 2,965 722 2.1x 8.8x 2.0x 9.4x 24.2% 21.7% 4.3% 2.6%

Serco Group plc 6.11 10.92 5.29 55.9% 3,282 4,552 7,104 516 0.6x 8.8x 0.6x 12.0x 6.2% 4.9% 7.6% 9.2%

Ultra Electronics Holdings plc 29.95 33.82 27.72 88.6% 2,086 2,153 1,234 221 1.7x 9.7x 1.6x 9.3x 17.7% 17.6% (0.2%) 5.5%

QinetiQ Group Plc 3.49 4.03 3.03 86.6% 2,238 1,954 1,986 262 1.0x 7.4x 1.4x 8.9x 15.4% 14.9% (9.6%) (23.2%)

Mean 1.0x 8.3x 1.1x 8.0x 12.1% 13.0% 2.5% (4.4%)

Median 0.8x 8.2x 0.8x 7.9x 10.4% 11.9% 3.6% (0.0%)

Commercial IT F irms

International Business Machines Corporation 191.67$ 199.21$ 172.19$ 96.2% 191,208$ 228,089$ 98,267$ 25,160$ 2.3x 9.1x 2.3x 8.1x 25.1% 26.9% (4.6%) (1.9%)

Accenture plc 79.28 85.88 69.78 92.3% 50,045 46,562 29,312 4,529 1.6x 10.3x 1.5x 9.1x 15.4% 16.4% 2.5% 5.7%

Xerox Corporation 13.26 13.38 9.55 99.1% 15,291 22,460 21,254 2,727 1.1x 8.2x 1.1x 6.7x 11.5% 15.4% (1.4%) (1.4%)

Computer Sciences Corporation 62.39 65.52 46.80 95.2% 9,083 9,557 12,998 1,969 0.7x 4.9x 0.7x 4.4x 14.5% 16.7% (3.8%) (7.4%)

Navigant Consulting Inc. 16.32 19.78 13.48 82.5% 797 976 726 111 1.3x 8.8x 1.1x 7.7x 16.8% 14.1% 1.7% 14.2%

Kforce Inc. 19.89 23.80 16.19 83.6% 670 732 1,192 58 0.6x 12.5x 0.6x 9.0x 4.6% 6.1% 6.4% 12.5%

Unisys Corporation 21.29 36.05 19.96 59.1% 1,088 724 3,356 224 0.2x 3.2x 0.2x 2.0x 7.7% 9.5% (6.7%) (3.4%)

Black Box Corporation 20.70 31.59 19.34 65.5% 322 464 970 63 0.5x 7.3x 0.5x 6.7x 7.9% 6.3% (4.4%) 1.7%

Source: Capital IQ Mean 1.0x 8.0x 1.0x 6.7x 12.9% 13.9% (1.3%) 2.5%

EV: Enterprise Value Median 0.9x 8.5x 0.9x 7.2x 13.0% 14.7% (2.6%) 0.1%

LTM: Trailing Twelve Months

NTM: Next Twelve Months

EV as a Mu lt iple of

LTM NTM EBITDA Margin Revenue Growth


Recent M&A Transactions


Close Date Name Industry Buyer Buyer Class i f icat ion $M /LTM Rev

/LTM EBITDA

Pending Signal Innovations Group, Inc. Cyber / Intel BAE Systems Public Strategic N/A N/A N/APending Zeta Associates Cyber / Intel Lockheed Martin Corporation Public Strategic N/A N/A N/A

08/04/14 NetCentrics Inc. Cyber / Intel Haystax Technology, Inc. P/E Backed Strategic N/A N/A N/A07/29/14 Global News Intelligence Cyber / Intel Novetta P/E Backed Strategic N/A N/A N/A07/29/14 Marbella Technologies Healthcare IT GetWellNetwork Private Strategic N/A N/A N/A07/01/14 JM Waller Associates C4ISR Versar Public Strategic 13.0 N/A N/A07/01/14 Verizon Communications (Federal Network Systems) IT Services Jacobs Engineering Public Strategic N/A N/A N/A06/30/14 MicroTechnologies LLC (SIGCOM, Inc.) Cyber / Intel UNICOM Government Private Strategic N/A N/A N/A06/27/14 Ventura Solutions Cyber / Intel Boeing Public Strategic N/A N/A N/A06/12/14 Celestech C4ISR Exelis Public Strategic N/A N/A N/A06/11/14 Envision Technical Services IT Services Preferred Systems Solutions (PSS) (CM Equity) P/E Backed Strategic N/A N/A N/A06/02/14 National Security Partners Cyber / Intel Noblis Private Strategic N/A N/A N/A05/29/14 Astrotech Space Operations Other Lockheed Martin Corporation Public Strategic N/A N/A N/A05/27/14 7Delta IT Services ManTech Public Strategic N/A N/A N/A05/12/14 RNSolutions Healthcare IT Dovel Technologies Private Strategic N/A N/A N/A05/09/14 nPulse Technologies IT Services FireEye Public Strategic N/A N/A N/A04/22/14 QinetiQ North America (Services and Solutions Group) IT Services The SI Organization (Veritas Capital) P/E Backed Strategic 215.0 N/A N/A04/21/14 Secure Mission Solutions (RLH Equity Partners) Cyber / Intel Parsons Public Strategic N/A N/A N/A04/02/14 LGS Innovations, LLC (Portfolio company of Alcatel-Lucent) Cyber / Intel Madison Dearborn Partners / CoVant P/E Sponsor 200.0 N/A N/A04/02/13 Viecore FSD Cloud / Data Analytics EOIR Technologies, Inc. P/E Backed Strategic N/A N/A N/A03/31/14 Avaya Government Solutions Inc. (IT Professional Services IT Services Camber Corporation (New Mountain Capital, LLC) P/E Backed Strategic 100.0 N/A N/A03/14/14 Industrial Defender, Inc. Cyber / Intel Lockheed Martin Corporation Public Strategic N/A N/A N/A03/10/14 SecureForce, LLC Cyber / Intel BRTRC Federal Solutions Private Strategic N/A N/A N/A03/05/14 Data Tactics Corporation Cloud / Data Analytics L-3 Communications Holdings Inc. Public Strategic N/A N/A N/A03/03/14 Intific, Inc. IT Services Cubic Corp. Public Strategic N/A N/A N/A02/28/14 Forgentum, Inc. Healthcare IT Fulcrum IT Services, LLC (Grindstone Partners, LLC) P/E Backed Strategic N/A N/A N/A02/28/14 EADS North America Test and Services Division (Airbus Group, IT Services Astronics Corp. Public Strategic 53.0 0.75 x N/A02/19/14 A&N Associates, Inc. Other Tangible Security, Inc. Private Strategic N/A N/A N/A02/19/14 Allied Technology Group, Inc. IT Services ManTech International Corp. Public Strategic 45.0 N/A N/A02/18/14 3 Phoenix, Inc. C4ISR Ultra Electronics Holding plc Public Strategic 87.0 N/A N/A02/18/14 Anaren, Inc. Technical Services Veritas Capital P/E Sponsor 302.7 1.9 x 11.0 x02/10/14 Business Computer Applications, Inc. Healthcare IT Acentia, LLC (Snow Phipps Group) P/E Backed Strategic N/A N/A N/A01/31/14 Dynamics Research Corp. IT Services Engility Holdings, Inc. Public Strategic 202.0 0.7 x 8.2 x01/30/14 ServiceMesh Inc. Cloud / Data Analytics Computer Sciences Corporation Public Strategic 295.0 N/A N/A01/27/14 Commonwealth Technology, Inc. Cyber / Intel MacAuley-Brown, Inc. Private Strategic N/A N/A N/A01/13/14 Entrust, Inc. (Portfolio company of Thoma Bravo, LLC) Cyber / Intel Datacard Group Private Strategic N/A N/A N/A01/07/14 Tactical Micro, Inc. (Relativity Capital, LLC) Technical Services Secure Communication Systems, Inc. (Vance Street Capital LLC) P/E Backed Strategic N/A N/A N/A01/02/14 Twisted Pair Solutions, Inc. C4ISR Motorola Solutions, Inc. Public Strategic N/A N/A N/A12/30/13 ARINC Inc. IT Services Rockwell Collins, Inc. Public Strategic 1,390.0 2.3 x 12.9 x12/18/13 PCO Innovation IT Services Accenture Ltd. Public Strategic N/A N/A N/A12/11/13 Globecomm Systems, Inc. C4ISR Wasserstein & Co. P/E Sponsor 277.0 0.8 x 8.5 x12/09/13 Animal Model Services Business of Advanced BioScience Other BIOQUAL, Inc. Public Strategic N/A N/A N/A12/06/13 OPINICUS Corp. IT Services Textron, Inc. Public Strategic N/A N/A N/A12/06/13 Kimmich Software Systems, Inc. Cloud / Data Analytics Vistronix, LLC (Enlightenment Capital) P/E Backed Strategic N/A N/A N/A

Target Information Buyer Information EV Information


Recent M&A Transactions


Public Strategic

40%

Private Strategic

23%

P/E Backed Strategic

24%

P/E Sponsor

8%

Buyer Classification

Cyber / Intel 17%

Cloud / Data Analytics

14%

IT Services 27%

Health- care IT

6%

Technical Services

13%

C4ISR 8%

Other 14%

Target Industry

Close Date Name Industry Buyer Buyer Class i f icat ion $M /LTM Rev

/LTM EBITDA

12/05/13 Netcentric Technology, Inc. C4ISR Vistronix, LLC (Enlightenment Capital) P/E Backed Strategic N/A N/A N/A11/26/13 Serco Group plc (Transport Solutions business) Technical Services Cubic Corp. Public Strategic 70.0 1.0 x 5.5 x11/22/13 National Technical Systems, Inc. Technical Services Aurora Capital Group P/E Sponsor 307.0 1.7 x 13.5 x11/15/13 Six3 Systems Inc. Cyber / Intel CACI International Inc. Public Strategic 820.0 1.9 x 13.4 x11/13/13 Centurion Research Solutions, LLC Other Deltek, Inc. Private Strategic N/A N/A N/A11/13/13 GreenLine Systems IT Services A-T Solutions, Inc. (CI Capital Partners, LLC) P/E Backed Strategic N/A N/A N/A11/12/13 Information Systems Consulting Group, Inc. IT Services Acentia, LLC (Snow Phipps Group) P/E Backed Strategic N/A N/A N/A11/08/13 GAP Solutions, Inc. Technical Services Tallasi Technology (Bluestone Investment Partners) P/E Backed Strategic N/A N/A N/A11/07/13 HighCloud Security Cloud / Data Analytics HyTrust, Inc. Private Strategic N/A N/A N/A11/01/13 Pacific Defense Solutions, LLC Technical Services Integrity Applications, Inc. Private Strategic N/A N/A N/A11/01/13 Professional Consulting Solutions, Inc. Other Apprio, Inc. Private Strategic N/A N/A N/A10/28/13 W&D Holdings Ltd, Parent Company of Wood & Douglas Ltd Technical Services Ultra Electronics Holdings Public Strategic N/A N/A N/A10/22/13 Symmetricom, Inc. Other Microsemi, Corp. Public Strategic N/A N/A N/A10/11/13 Michael Baker Corp. Technical Services Integrated Mission Solutions (DC Capital Partners) P/E Backed Strategic 312.0 0.5 x 9.5 x10/10/13 Acroamatics, Inc. Other Delta Information Systems, Inc. Private Strategic N/A N/A N/A10/07/13 Sourcefire, Inc. Cyber / Intel Cisco Systems, Inc. Public Strategic 2,700.0 7.5 x 37.6 x10/01/13 Strong Point Research IT Services Technical and Project Engineering, LLC (TAPE) Private Strategic N/A N/A N/A09/27/13 N2 Net Security, Inc. Cyber / Intel Tangible Software, Inc. Private Strategic N/A N/A N/A09/18/13 ASM Research, Inc. Healthcare IT Accenture Ltd. Public Strategic N/A N/A N/A09/16/13 AMCAD Cadastre, LLC IT Services Riverside Partners LLC P/E Sponsor N/A N/A N/A

Target Information Buyer Information EV Information


Representative ACP Transactions


WHO IS ARONSON CAPITAL PARTNERS? 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.

Mergers & Acquisitions • Sell-Side M&A • Buy-Side M&A • Private Equity Platform Acquisitions • Management & Leveraged Buyouts • Divestitures • ESOPs • Asset Sales

Corporate Finance • Recapitalizations & Restructurings • Common & Preferred Equity • Senior Debt • Subordinated Debt • Convertible Debt • Private Equity Investments • Minority Equity Investments

Financial Advisory • Internal Capital Transaction Advisory • Independent Corporate Valuations • Fairness Opinions • Strategic Alternatives Assessments


july 2014 market update - aronson llc · sales accounted for only about 15% of boeing’s defense...

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