The long-awaited, much-anticipated and well-documented merger of Leidos into the now former Lockheed Martin information technology and technical services business completed on Tuesday.
As if GovCon observers needed reminding, Leidos doubles to $10 billion in projected annual revenue versus the pre-transaction sales figure $5 billion as the Reston, Virginia-based contractor becomes by far the U.S.’ largest player in government services.
This week also gave industry watchers a pair of new acquisition deals from privately-held government services contractors as both companies chart a new path for their expansion aims.
ASRC Federal has marked its entry into the intelligence community through the purchase of software development and technology services provider Vistronix, which itself was a player in the GovCon acquisition arena in late 2014 through three dealsalso in search of expansion throughout the IC market.
Vistronix also represents ASRC Federals second pickup under the leadership of CEO Mark Gray, a two-time Wash100 inductee who joined the engineering and technical services contractor in mid-2014 from the former URS.
ASRC Federals first deal with Gray at the helm was in late 2015 for Data Networks Corp. to add a footprint in the healthcare information technology arena and positions on contract vehicles with civilian agencies.
For the second M&A deal announced this week, global investment firm Apollo Global Management and executives at Constellis Group will buyout the security services contractor that has nearly 8, 000 employees across 25 countries.
Apollos move into GovCon is another example of how some private equity investors view the market as one of opportunity and stability, a point PAE CEO John Heller emphasized to ExecutiveBiz in May after his company was purchased by Los Angeles-based Platinum Equity.
Like Constellis, PAE has large international footprints and operates much of its business in services to defense and other national security agencies in-theater.
“Even though we felt the defense spending downturn within our industry over the past few years, it has a stable spending graph over the long term, said Heller, also a 2016 Wash100 inductee.
“From an investment standpoint, our industry looks very attractive and doesnt have huge swings upward or downward. If you acquire a good company and help it grow, you can take advantage of that stable market and continue with a successful business.
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