FED MARKET M&A ACTIVITY ON THE RISE

Consolidation among the ranks of federal contractors continues to accelerate, even as DOD and civilian agencies are about to get substantially more money to spend in the upcoming appropriations omnibus expected in late March/early April.  The big news last week was General Dynamics’ decision to buy up CSRA.  This will add substantially to GD’s IT and professional services capabilities outside of its core defense area.  Also last week, private equity firm Veritas announced that it is buying the public unit of PwC with the plan to rename the business and run it as a privately held company.  These two announcements come of the heels of substantial activity at the end of 2017.  GovConWire reported in mid-December on new fewer than eight active or potential contractor mergers and acquisitions.  While some of these actions are taken for different reasons, it seems clear that companies want to increase the depth and breadth of work they can provide to federal agencies and that they feel the need to have specialized solutions in-house as DOD, especially, looks to non-traditional contractors for new ideas and solutions.  Whether or not your company wants to jump into the M&A pool, it is important to know who is so that you know who you’re swimming against and whether they have new capabilities that will get them into the middle lane.