A Raymond James (NYSE: RJF) report has found that the volume of merger and acquisition-related transactions in the government technology solutions market dropped 12 percent in the third quarter of 2024 compared with the same period last year.
According to the company’s quarterly market update, despite the decline in Q3 2024 M&A deal volume, total transactions in 2024 reflected an 8 percent increase compared to this time the previous year.
The report was issued by Raymond James’ defense and government team, whose managing directors are 2024 Wash100 awardee Sam Maness and Andy McEnroe.
Government Tech Solutions M&A Activity
When it comes to M&A activity breakdown by buyer type, strategic acquirers accounted for eight transactions and private equity firms were associated with 22 transactions in Q3 2024.
M&A deals by private equity investors dropped from 28 in Q3 2023 to 22 transactions this year’s quarter, reflecting a decline of 21 percent.
Some of the M&A deals cited in the report are the proposed acquisition of Enlightenment Capital-backed Aeyon by CGI’s (NYSE: GIB) U.S. federal arm, Cydecor’s purchase of Artel, General Dynamics Information Technology’s acquisition of Iron EagleX, or IEX, and Exiger’s move to buy data science company XSB.
Market Performance of Public Government Tech Companies
The report showed the stock and financial performances of publicly traded companies in government technology and diversified IT markets.
Some of those companies are Booz Allen Hamilton (NYSE: BAH), CACI International (NYSE: CACI), ICF (Nasdaq: ICFI), Leidos (NYSE: LDOS), Parsons (NYSE: PSN), Science Applications International Corp. (Nasdaq: SAIC), Accenture (NYSE: ACN) and IBM (NYSE: IBM).
Public Government Tech Market Index Performance
According to the report, the Government Technology index has witnessed above-average growth over the last year, 58.1 percent, compared with its historical five-year annual average of 31.1 percent.
The index has increased 40.1 percent in the 2024 year-to-date period, driven by international events, robust funding dynamics and sector privatization by government agencies.
Raymond James noted in the report that over the last year, the Diversified IT index has outperformed the S&P 500 index with a return of 36.4 percent.
