The halfway point of 2015 and Fourth of July weekend offers us a good opportunity to look back on the year’s most significant developments in the GovCon sector, specifically in the M&A space.
These six months have offered us announcements and completions of deals in all shapes and sizes, which ranged from either combinations of forces to divisions.
Contracting and healthcare market observers awoke this morning to learn that Centene will purchase Health Net for $6.3 billion in cash and stock and take on $500 million in assumed debt.
Centene’s federal market aims through the deal include the expansion of its footprint in the Department of Veterans Affairs and the Medicare and Tricare programs.
Only one month into 2015, Harris Corp. unveiled its plans to acquire Exelis in a deal worth close to $5 billion in cash and stock that closed in late May.
Harris offered us a glimpse into next steps for its future this week when the Melbourne, Fla.-based company said it will reorganize into a four business-unit structure that will take effect Friday.
The early part of 2015 also saw the official start of Orbital ATK, which formed out of Orbital Sciences’ merger with ATK’s aerospace and defense groups in a transaction the companies valued at nearly $5 billion at the time of the original announcement.
Raytheon started its latest play into the commercial cybersecurity market in June when the missile maker and San Francisco-based investment firm Vista Equity Partners wrapped up the formation of a joint venture that operates under the name ”Raytheon | Websense.”
The venture — which Raytheon owns 80 percent of — will offer what it calls “defense-grade cybersecurity” technologies to more than 21,000 commercial sector customers.
Within GovCon’s services segment, Engility completed its purchase of TASC for $1.3 billion all-stock in February to make a company that makes 53 percent of its revenue from intelligence and civilian agencies, with the other 47 percent from defense customers.
SAIC also closed its $790 million cash acquisition of Scitor in May to add new contracts with the Air Force and classified intelligence community work and Maximus wrapped up its $300 million cash buy of Acentia in April to gain more federal contract vehicle positions.
Two transactions GovCon observers will have their attention on as the year unfolds include one company’s impending split in two and another’s transition to become a publicly-traded company.
CSC announced its plan to divide in May and intends to finish the split by the end of October, after which one company will focus exclusively on the U.S. public sector market and the other in the commercial and international government segments.
Special purpose acquisition company Global Defense & National Security Systems said in June it would buy STG for $165.5 million in cash and stock and plans to close the deal by September.
GDEF made its initial public offering in October 2013 and has sought to build a mid-tier GovCon technology and services contractor since it undertook that IPO.
Air Force Secretary Deborah Lee James will offer her perspective on the service branch’s current status and future plans to the Potomac Officers Club July 22 as the “2015 Air Force Forum” keynote speaker.
James became the Air Force’s top civilian officer in late 2013 after 11 years at SAIC.
Air Force Chief Technology Officer Frank Konieczny and Maj. Gen. Arnold Bunch, military deputy to the assistant secretary for acquisition, will also address the GovCon executive audience.
Speakers that will give a private sector perspective on the Air Force will include Bill Gattle, president of space and intelligence systems at Harris Corp.; and Trey Obering, an executive vice president at Booz Allen and a retired lieutenant general who once led the Missile Defense Agency.
Prior to that, the Potomac Officers Club will kick off its summer “CIO Speaker Series” for industry and government executives to hear from federal IT leaders on their technology priorities.
Doug Wolfe, the CIA’s chief information officer, will be the first federal CIO to address the POC at a July 16 breakfast event with Pentagon CIO Terry Halvorsen scheduled for August 6 and Transportation CIO Richard McKinney for August 20.
Heidi Shyu, the Army’s chief acquisition official, will address the POC September 2.
Click here to register for these events and to view POC’s full calendar.
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