2017 Review and 2018 Outlook Aerospace, Defense Technology & Government Services 2017 Review Commercial Cloud Adoption Gaining Further Traction Active M&A Participation Across the Buyer Landscape 2018 Outlook Notable Transactions Public Company Comparables & Recent M&A Transactions Representative ACP Transactions
Larry A. Davis Philip J. McMann Mark Shaheen Partner Partner Managing Director (301) 231-6225 (301) 231-6202 (301) 222-8227 [email protected] [email protected] [email protected]
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com
2017 Review 2017 M&A Recap
A total of 98 M&A transactions were announced in the defense technology and government services market in 2017, which was an increase in comparison to transactions completed in the prior year, but slightly lower than 2015. M&A deal count in 2017 further validated Aronson Capital Partners’ reference in the 2016 M&A Recap regarding the normalized level of deal activity that has occurred since the flurry of activity in 2015.
Defense Technology & Gov't Services Historical M&A Deal Volume
105 107 Foreign 101 98 90 92 86 New PE Platform
PE-Backed
Private
Public
2011 2012 2013 2014 2015 2016 2017
Despite normalizing to historical levels, the industry continues to ride the positive momentum brought on by President Trump’s budget proposal plans, which called for an increase in funding for a number of agencies including but not limited to the Department of Defense (9.0%+ y-o-y increase), Department of Homeland Security (7.0%+ y-o-y increase) and Veteran Affairs (6.0%+ y-o-y increase). Furthermore, the Administration pledged to make cybersecurity a major priority for both the public and private sectors, with a heavy reliance on government contractors developing innovative methods and technologies.
In addition, the 2018 National Defense Authorization Act, including the Modernizing Government Technology (MGT) Act, was signed at the end of 2017 and will be a year-plus effort allowing federal agencies to reprogram unused IT budget allocation to fund future modernization projects. This is an important step forward to a next-generation (Next- Gen) federal government focused on enabling the movement to the cloud, implementing shared services and improving cyber defenses. The improved efficiencies from the MGT Act will authorize agencies to modernize their legacy IT systems, better protect data from cyber-attacks and ultimately save billions in taxpayer dollars by reducing long-term spending.
Commercial Cloud Adoption Gaining Further Traction
Spurred by a productive summer visit to the West Coast in August of 2017, the Defense Department’s top executives are continuing to push the implementation of cloud computing services offered by a host of vendors including Amazon (AWS), Microsoft (Azure), IBM (Watson), systems integrators and a cadre of other providers. The trip prompted the creation of the Defense Department Cloud Executive Steering Committee to speed up cloud adoption, and the group released a RFI for how the Pentagon might “acquire a modern enterprise cloud services solution” to support unclassified, secret and top secret information, more specifically as it relates to elastic computing, data management and analytics, cybersecurity and machine learning.
2017 Review
The August meeting seemed to have a positive impact, as Amazon Web Services (AWS) announced the AWS Secret Region in November 2017, which will allow the Intelligence Community to execute their mission with a common set of tools, a constant flow of the latest technology and the flexibility to rapidly scale with the mission. This is a follow-on to the Top Secret Region, which was launched three years ago. The new Secret Region allows more agency collaboration, helps get critical information to decision makers faster and enables an increase in the nation’s security.
In October of 2017, Microsoft announced they would expand their Azure Government Secret offering outside of the Defense Information System Agency’s cloud security requirements and offer the service to a number of agencies working on topics classified as “Secret” in fields like energy research or law enforcement. This will allow for greater access to cloud computing services like artificial intelligence and translation.
Active M&A Participation Across the Buyer Landscape
The positive funding environment and continued emphasis on enhancing legacy IT systems has translated into a heightened level of confidence and active participation throughout the M&A marketplace, driven mainly by (i) private equity sponsors (PEGs) acquiring platforms of scale and/or “bolting-on” niche companies with differentiated capabilities (ii) larger Tier-1 and Mid-Tier’s selectively pursuing companies with emerging, Next-Gen IT capabilities that align with mission-critical objectives (e.g., cloud, cyber, mobile, agile development, digital transformation services, artificial intelligence), and (iii) strategic buyers targeting companies that round out their technical capabilities and/or expand their client footprint into high priority end markets (e.g., Department of Defense, Department of Homeland Security, Veteran Affairs).
As referenced in Aronson Capital Partners’ Mid-Year Historical Buyer Mix Review, PEGs continue to be the most active buyers in the 4% 11% 12% defense technology and government services market, 16% comprising 36% of transactions in 2017. This was 21% followed by publicly-traded companies making 20% strategically targeted acquisitions focused on 28% differentiated capabilities (e.g., cloud, cyber, mobile, agile 26% development, digital transformation services, artificial intelligence). Acquisitive buyers in 2017 included 35% 27% seasoned private equity groups such as Arlington Capital Partners, H.I.G. Capital, Enlightenment Capital, DC 2016 2017 Capital and Acorn Growth Companies. Publicly-traded Public Private PE-Backed New PE Platform Foreign companies like Accenture, CSRA, DXC Technology, Source: DACIS and ACP internal research Mercury Systems, Jacobs Engineering, Mantech Corporation and L3 Technologies also acquired companies with targeted capabilities that will enhance their overall service offerings. M&A activity from private equity sponsors, public, and privately held strategic acquirers over the past year bodes well for the industry as it signals renewed confidence in the overall growth prospects of the federal market. Outlined on the subsequent pages are the major deals of 2017 across the buyer landscape.
2017 Review Private Equity Sponsor Participation
Arlington Capital Partners continues to build out its portfolio company, Polaris Alpha, acquiring Intelesys and Solidyn Solutions, Inc. in January and September of 2017. Intelesys and Solidyn offer expertise in next-gen capabilities related to cyber and C4ISR within the highly coveted Department of Defense and Intelligence Community. In addition to shaping Polaris Alpha into a full-spectrum solutions provider, Arlington Capital Partners acquired another platform company, Xebec Corporation, from seasoned private equity investor CM Equity in October of 2017. Arlington Capital Partners plans to invest additional capital into the business to support the growing demand for enterprise IT, training and role-playing subject matter expertise to special mission support programs.
On the heels of H.I.G. Capital’s $283M take-private transaction of NCI, Inc., the private equity group acquired Whitney, Bradley and Brown (WBB), a leading provider of program management and consulting services to the Department of Defense and other federal agencies. This marks H.I.G.’s second relevant acquisition in under six months, solidifying their increased appetite for investments in the defense technology and government services industry. H.I.G. will work with the NCI and WBB teams to expand both portfolio companies’ capabilities through organic investments and complementary acquisitions in adjacent end markets.
Enlightenment Capital has had a busy 2017, especially after the fund’s successful exit of Vistronix Intelligence & Technology Solutions in August of 2016, and subsequent closing of an oversubscribed, $147 million fund in November of 2016. Enlightenment further exemplified the fund’s commitment to the industry by announcing four new investments in a variety of technology and government service providers including managed IT services provider 1901 Group, Inc., continuous security-assurance provider Telos Corporation, strategic management consulting firm The Cadmus Group, and professional and managed services provider Cybercore Technologies.
DC Capital Partners started the year with an addition to its cyber defense portfolio with the acquisition of Owl Computing Technologies. Owl Computing will combine with DC Capital’s 2016 acquisition, QRC Technologies, under Acuity Technologies Holding Company. The formation of Acuity signals DC Capital’s commitment to expanding its cyber portfolio in 2018 and beyond. DC Capital had an eventful year end as well with the acquisitions of Rocky Research and Janus Operations. Rocky Research provides customized engineering services to commercial and federal defense customers, specializing in thermal and heat management. Janus is a provider of integrated stability operations to public and private sectors worldwide, Janus was previously owned by Sterling International Group.
After acquiring Telecommunication Support Services, Inc. (TSS) in July, Acorn Growth Companies continued to grow its presence in the DoD with the acquisition of CIS Computing. CIS is a provider of secure communications and computing solutions previously owned by Bluestone Investment Partners. In addition, Acorn Growth Companies had a successful exit of Commuter Air Technology to Meta Aerospace. Commuter Air Technology specializes in integrated solutions for the global ISR market specifically in support of US Special Operations Forces in austere environments.
Targeted Acquisitions by Strategic Acquirers
Chenega Corporation, an Alaskan Native-owned firm, acquired Antkowiak Design Group, Inc. (ADG) in mid- December. ADG is a provider of communications and digital transformation solutions to the federal government. Chenega plans to integrate the Company’s capabilities and experience into its Military, Intelligence and Operations Support (MIOS) business unit.
2017 Review Xator Corporation has been relatively acquisitive in the federal contracting space over the past five years. In December, they continued that pattern with the acquisition of Merlin International’s Professional Services Group. The acquisition fits into Xator’s overall plan of building a robust set of cybersecurity solutions for the federal government.
In an attempt to more aggressively pursue the federal IT market, TeraThink merged with Dominion Consulting in November. The surviving entity, TeraThink, will provide a wide-range of strategic IT solutions to the federal government, including both defense and civilian industries. One of the major strategies behind the merger is to utilize each companies’ agile development capabilities. Agile development continues to be one of the most valuable contractor skillsets in federal IT.
SOS International (SOSi) has entered the M&A realm by making significant acquisitions in each of the last two years to strategically position themselves in the Intelligence Community. In September, SOSi added Defense Group Inc. (DGI) to their Intelligence Solutions Group. DGI provides data analytics and cybersecurity to first responders and homeland defense. The Company also develops mission-specific software. DGI is a follow-up to SOSi’s acquisition of intelligence contractor New World Solutions in 2016.
Buchanan & Edwards Inc., a technology leader creating transformative solutions for government customers, announced that it has acquired The Reports and Requirements Company (R2C) LLC, a government services provider offering national security-focused consulting services in intelligence collection, training support and data governance and analysis. With this acquisition and the addition of R2C’s advanced capabilities in front-end data governance and curation, BE’s offering will expand to include a full life cycle of analytics solutions to support government customers across the spectrum of national security including defense, diplomatic corps, homeland security, law enforcement and the Intelligence Community.
Selective Acquisitions by Larger Public Companies
Accenture has acquired more than ten companies in the past five years making them one of the most acquisitive buyers in the federal space. 2017 was no different with acquisitions of Phase One Consulting Group and a business unit of Endgame, Inc. Both companies expand Accenture’s IT capabilities; Endgame provides endpoint detection and response cybersecurity software for the government while Phase One specializes in modernization and digital transformation for federal agencies. Both companies will be merged into Accenture’s Federal Services practice which has integrated six acquisitions in the past five years alone.
After the massive strategic merger of CSC’s public sector business and SRA International in 2015, CSRA remained inactive in M&A until mid-2017. In July, the federal IT provider added NES Associates, LLC to the Company’s Defense and Intelligence Segment. NES has experience providing IT infrastructure support at over 400 DoD sites worldwide. NES has experienced rapid growth since 2012 mostly due to its access to the CIO-SP3 vehicle. Although the vehicle is small business restricted, there is still five years remaining on the IDIQ and the contract has aided NES in creating new client relationships.
Later in October, CSRA made its first acquisition in the Intelligence Community with the acquisition of Praxis Engineering Technologies. Praxis’ 350+ employees provide software and system engineering technologies. The acquisition enables CSRA’s ability to gain access to Praxis’ Technical Information Engineering Services (TIES) vehicle.
2017 Review 14 months after the announcement of the merger of CSC with Hewlett Packard’s Enterprise Services segment, and just four months after the official merger, the newly formed DXC Technology, Co. made its first acquisition. Tribridge Holdings, LLC is one of the largest independent integrators of Microsoft Dynamics 365. Tribridge’s 740 employees provide enterprise software services across North America and Europe. The acquisition expands DXC’s capabilities servicing private, public and hybrid cloud infrastructures for clients in the private and public sectors.
Not long after the Tribridge acquisition, DXC was part of another significant merger. DXC announced that a company created from its spun-off U.S. Public Sector (USPS) business will combine with two Veritas Capital portfolio companies. Vencore Holding Corp. and KeyPoint Government Solutions have provided services to the federal civilian defense markets for decades. Vencore provides information solutions, cyber security, engineering and analytics to the federal government through its 3,750+ employees. KeyPoint has over 3,500 employees that provide investigative services to a broad range of organizations in the defense, intelligence and civilian sectors. With the merger of the three companies DXC has become one of the top services providers in the federal government with a broad portfolio of service offerings. Veritas Capital will remain as an investor in DXC.
Over the past three years Mercury Systems has added three acquisitions to its Mercury Defense Systems (MDS) division, further expanding its already massive service offering in defense electronics. In April, MDS boosted its RF capabilities with the acquisition of Delta Microwave, LLC, a designer and manufacturer of high-value radio frequency (RF), microwave and millimeter wave subassemblies and components for the military, aerospace and space markets. At the end of the year, MDS made an aggressive investment into the Command, Control, Communications, Computers and Intelligence (C4I) market with the addition of Themis Computer. Themis is a designer, manufacturer and integrator of computer hardware for US and international defense programs. Both Themis and Delta Microwave provide Mercury a significantly expanded capability and customer set in a rapidly growing electronic warfare market.
Jacobs Engineering had an active summer, announcing the acquisitions of CH2M HILL and Blue Canopy in August. CH2M provides design, engineering and program management services to key infrastructure projects in the government sector. Jacob’s will leverage CH2M’s technical expertise against its global presence to provide a significantly wider array of services to both the government and private sectors. Weeks after the CH2M announcement Jacobs showed its desire to diversify with the acquisition of Blue Canopy. Blue Canopy provides custom cybersecurity, data analytics and application development to various federal agencies, including healthcare and intel. Blue Canopy’s experience in the Intelligence Community figures it as an apparent follow-up to Van Dyke Technology Group, Jacobs’ first IC acquisition in early 2016, but Blue Canopy also has an extensive foothold in the healthcare space with work at CMS among other agencies.
Mantech Corporation continues to use inorganic growth to remain on the forefront of providing services to the federal government. In September, the Company added InfoZen to its Mission Solutions and Services (MSS) division. InfoZen provides IT solutions to DHS, NASA and various other federal civilian agencies. The acquisition expands Mantech’s IT service portfolio, including a specialization in agile development. Furthermore, in late December Mantech released its growth plan via the Company’s website seeking to grow the Company’s revenues to at least $2.5B in 2020 and views M&A as a key component of the Company’s growth strategy. Kevin Phillips, Mantech’s newly appointed CEO, stated they will pursue targeted acquisitions, to build out key capabilities that help address emerging IT areas as well as key customers. In addition, Phillips believes federal civilian work will grow incrementally because “homeland security is as important as national security”.
2017 Review At the start of 2018, Chris Kubasik will take over as CEO of L3 Technologies. During the Company’s 2017 Investor Conference on December 5th, Kubasik stated the Company made six acquisitions during the past 24 months (including Adaptive Methods, Openwater Power and OceanServer in 2017) and is currently evaluating over two dozen companies worth about $2.0B in total sales. Kubasik believes with this robust pipeline, L3 Technologies is confident they will close four to six deals next year, all of which will be strategic, with the goal of “putting the pieces together
to move up the food chain”.
2018 Outlook 2018 M&A Outlook
Several trends are surfacing that will drive continued deal flow in 2018. Expect to see continued M&A interest in companies providing next-gen technologies (e.g., cloud, cyber, mobile, agile development, digital transformation services, artificial intelligence). Continued adoption by the government of commercialized IT will drive demand for companies with next-gen technologies and larger companies with access to capital on the balance sheet may target companies with these differentiated capabilities to move up the “food chain”. The recent announcement of Amazon Web Services (AWS) Secret Region offers the Intelligence Community a solution with Top Secret-level security and the Pentagon’s recent visit to the West Coast further solidifies the demand for these types of technologies.
2018 is also likely to see continued participation from private equity firms across the government services landscape, as they continue to get comfortable with the funding outlook and growth prospects. The emergence of this trend is seen in multiple transformational deals that have occurred in 2017 such as H.I.G. Capital’s acquisition of NCI, Inc. for $283 million, who holds many multiple-award IDIQ contracts in the services space, and the funds subsequent acquisition of Whitney, Bradley & Brown Inc. (WBB), a management consulting firm who focuses on process improvement and organizational efficiencies. These deals are anticipated to set a precedent for future deals; the private equity presence will be strong in 2018.
Strategic buyers are expected to be active in 2018, as referenced in recent conference calls from larger publicly-traded government contractors (e.g., Mantech, L3). In addition, recent changes to tax laws could potentially free up cash flow for public strategic buyers to allocate to M&A efforts. With thriving equity markets and shifts in corporate finance strategy, do not be surprised if Q1 2018 is a record quarter for M&A announcements for Tier 1 and Mid-Tier companies as they continue to acquire niche companies with differentiated capabilities that allow them to move up the value chain into a pure solutions provider.
Notable Transactions
CSRA to acquire Praxis Engineering Technologies, Inc. On October 17th, CSRA signed a definitive agreement to acquire Praxis Engineering Technologies, Inc. for $235 million. Praxis Engineering delivers practical applications of software and system engineering to the Intelligence Community. Praxis Engineering’s specialties include SOA/Enterprise application development; configuration management; embedded real-time technologies; automated testing of complex systems; database architecture; IT infrastructure and network support; and program management. Praxis president and co-founder, Bill Dunahoo, stated "Combining with CSRA will enable us to accelerate our growth, provide more opportunities for our employees and significantly increase the value we bring to our customers' most critical missions. We are very excited to become part of the CSRA family”. Leigh Palmer, CSRA’s Executive VP of Intelligence, commented “The Praxis culture exemplifies best-idea- wins and we look forward to leveraging Praxis’s creativity across the rest of the enterprise”.
ACP advises Syntronics, LLC on its strategic sale to General Atomics Aronson Capital Partners is pleased to announce the acquisition of Syntronics, LLC by General Atomics. Founded in 2004, Syntronics is headquartered in Fredericksburg, VA. ACP is proud to have served as the exclusive sell-side M&A advisor to the company on this transaction.
General Atomics is a global leader in the research, design, and manufacture of state-of-the-art electromagnetic and electric power generation systems. Syntronics prides itself on being a leading developer and manufacturer of custom electro-mechanical technologies. They specialize in projectile and missile guidance systems, in-flight and ground based shock resistant instrumentation and related software technologies. This deal will integrate Syntronics into General Atomics’ Electromagnetic Systems Group (GA-EMS).
“Their level of experience designing and manufacturing sophisticated electronics and telemetry packages that can withstand High G forces and environments has helped us make significant progress in advancing and testing our railgun weapon systems” explained Scott Forney, president of GA-EMS.
Blue Canopy Group, LLC acquired by Jacobs Engineering Group, Inc. On October 31st, Jacobs Engineering Group announced its acquisition of Blue Canopy Group, LLC. Blue Canopy, who posted $104 million in 2016 revenue, specializes in mission support, cybersecurity, agile development, cloud computing and data analytics. A winner of the 2016 GovCon Contractor of the Year award, Blue Canopy delivers critical securities solutions to the national security, civilian, and commercial sectors. Jacobs Engineering describes the acquisition as "part of ongoing investments to expand Jacobs Connected Enterprise (JCE) solutions”. Blue Canopy will support JCE’s effort to connect critical infrastructure and protect data from internal and external threats. “Combining Blue Canopy’s technology-enabled solutions with the Jacobs Connected Enterprise will accelerate client adoption around automation, analytics and innovation in commercial, civilian and national security markets” remarked Brad Schwartz, CEO of Blue Canopy.
Public Company Comparables
Last 12-Month Returns
180 LTM 1/4/2018 Returns
Defense System/Electronics: 55.6% 160 Tier-1: 34.0% Aerospace: 21.7% S&P: 19.6% 140 Mid-Tier: 1.0%
120
Indexed PerformanceIndexed 100
80
60 Jan-17 May-17 Sep-17 Dec-17
Last 12-Month Enterprise Value / EBITDA
20.0x
18.0x
16.0x
14.0x
12.0x
10.0x LTM 1/4/2018 Multiples Defense System/Electronics : 19.0x 8.0x Tier-1: 15.1x Aerospace: 12.8x
Enterprise Value/LTM EBITDA EnterpriseValue/LTM 6.0x Mid-Tier: 12.6x
4.0x Jan-17 May-17 Sep-17 Dec-17 Source: Pitchbook Mid-Tier Index: BAH, LDOS, CACI, MANT, EGL, ICFI, KEYW, VSEC, NCIT Tier-1 Index: BA, LMT, GD, RTN, NOC, LLL Defense Index: COL, LLL, HRS, COB, OA, TDY, FLIR, ULE, CUB, KTOS, MRCY, AVAV Aerospace: UTX, BA, A, GD, SAF, FNC, ERJ, AM, TXT, B, CAE, PCP, TDG, COL, HO, HXL, TGI, CW, ESL, HEI, MOG.A, ULE
Public Company Comparables USD in Millions, excluding share prices EV as a Multiple of As of 1/8/2018 Enterprise LTM LTM LTM NTM EBITDA Margin Revenue Growth Company Value Rev. EBITDA Rev. EBITDA Rev. EBITDA CY16A CY17P CY16A CY17P Mid-Tier Federal Service Providers Leidos $ 12,875 $ 10,229 $ 928 1.3x 13.9x 1.2x 12.0x 7.5% 10.3% 39.1% 45.1% CSRA 7,898 4,977 850 1.6x 9.3x 1.5x 9.9x 9.2% 15.6% 4.4% 17.5% Booz Allen 7,243 6,022 560 1.2x 12.9x 1.1x 11.9x 9.5% 9.4% 2.5% 5.5% CACI International 4,506 4,367 366 1.0x 12.3x 1.0x 11.3x 8.8% 8.5% 13.0% 15.2% Science Applications International 4,271 4,352 302 1.0x 14.1x 1.0x 13.1x 6.7% 7.5% 11.1% 4.6% ManTech International 1,891 1,649 125 1.1x 15.1x 1.0x 12.9x 7.6% 7.6% 3.3% 7.1% ICF 1,229 1,198 114 1.0x 10.8x 1.0x 9.8x 9.5% 9.5% 4.7% 2.7% Keyw 553 384 (7) 1.4x NA 1.1x 12.2x 6.2% 8.6% (3.3%) 52.6% Mean 1.2x 12.6x 1.1x 11.6x 8.1% 9.6% 9.3% 18.8% Median 1.2x 12.9x 1.1x 12.0x 8.2% 9.0% 4.5% 11.2%
Tier 1 Prime Contractors Boeing $ 185,514 $ 91,310 $ 11,623 2.0x 16.0x 2.0x 15.0x 8.3% 13.0% (1.6%) (2.5%) Lockheed Martin 105,499 49,663 6,687 2.1x 15.8x 2.1x 14.7x 14.3% 14.0% 16.6% 7.1% General Dynamics 63,280 31,142 4,928 2.0x 12.8x 1.9x 12.9x 15.2% 14.9% (0.4%) (0.8%) Raytheon 58,347 24,789 3,785 2.4x 15.4x 2.2x 14.1x 15.6% 15.3% 3.5% 5.4% Northrop Grumman 58,010 25,566 3,870 2.3x 15.0x 2.1x 14.0x 15.0% 14.9% 4.2% 4.2% L3 Technologies 18,859 11,036 1,138 1.7x 16.6x 1.9x 13.9x 11.5% 13.1% 0.4% (8.9%)
Mean 2.1x 15.3x 2.0x 14.1x 13.3% 14.2% 3.8% 0.8% Median 2.1x 15.6x 2.0x 14.0x 14.7% 14.5% 2.0% 1.7%
Defense System / Electronics Firms Rockwell Collins $ 28,871 $ 6,822 $ 1,512 4.2x 19.1x 3.3x 13.9x 23.8% 23.3% 0.3% 30.5% Harris (Florida) 21,060 5,893 1,390 3.6x 15.2x 3.4x 14.3x 23.8% 24.3% 54.2% (2.0%) L3 Technologies 18,859 11,036 1,138 1.7x 16.6x 1.9x 13.9x 11.5% 13.1% 0.4% (8.9%) Alliant Techsystems 8,928 4,679 655 1.9x 13.6x 1.8x 11.7x 14.2% 15.5% 43.1% 4.5% Teledyne Technologies 7,796 2,452 399 3.2x 19.5x 2.8x 15.7x 16.4% 17.2% (6.4%) 19.4% FLIR Systems 6,866 1,780 374 3.9x 18.4x 3.6x 14.9x 21.1% 21.8% 6.7% 8.3% Cobham 5,265 2,637 $ (742) 2.0x NA 1.9x 12.5x (28.1%) 14.1% (16.7%) 3.2% Mercury Systems 2,447 427 78 5.7x 31.5x 5.0x 21.6x 15.6% 22.7% 15.0% 50.8% Cubic 1,820 1,486 69 1.2x 26.4x 1.2x 13.7x 3.3% 6.9% 2.1% 1.2% Ultra Electronics 1,662 1,066 177 1.6x 9.4x 1.5x 8.6x 16.6% 17.8% (4.0%) (2.2%) Kratos Defense & Security Solutions 1,340 732 34 1.8x 39.6x 1.7x 17.8x 0.8% 7.2% 1.8% 11.4% Aerovironment 1,049 296 41 3.5x 25.3x 3.4x 53.5x 5.0% 5.3% 1.8% (0.8%) Mean 2.9x 21.3x 2.6x 17.7x 10.3% 15.8% 8.2% 9.6% Median 2.6x 19.1x 2.4x 14.1x 14.9% 16.4% 1.8% 3.9% Source: Pitchbook EV: Enterprise Value LTM: Trailing Twelve Months NTM: Next Twelve Months
Public Company Comparables USD in Millions, excluding share prices EV as a Multiple of As of 1/8/2018 Enterprise LTM LTM LTM NTM EBITDA Margin Revenue Growth Company Value Rev. EBITDA Rev. EBITDA Rev. EBITDA CY16A CY17P CY16A CY17P Aerospace Aircraft - OEM Boeing $ 185,514 $ 91,310 $ 11,623 2.0x 16.0x 2.0x 15.0x 8.3% 13.0% (1.6%) (2.5%) United Technologies 126,613 58,816 10,447 2.2x 12.1x 2.0x 11.4x 17.7% 18.2% 2.0% 4.2% Airbus Group 82,429 73,794 4,749 1.1x 17.4x 0.9x 9.0x 5.8% 9.7% 3.0% 9.4% General Dynamics 63,280 31,142 4,928 2.0x 12.8x 1.9x 12.9x 15.2% 14.9% (0.4%) (0.8%) Textron 18,360 13,934 1,382 1.3x 13.3x NA NA 10.4% 10.4% 2.8% 4.2% Bombardier 13,928 15,883 186 0.9x 74.9x 0.8x 11.3x (0.5%) 5.9% (10.1%) (0.2%) Dassault Aviation 13,146 4,042 495 3.3x 26.6x 2.3x 23.6x 12.2% 8.7% (12.8%) 27.7% CAE 5,669 1,031 453 5.5x 12.5x 2.4x 10.7x 21.2% 22.5% (3.0%) 5.6%
Mean 2.3x 23.2x 1.8x 13.4x 11.3% 12.9% (2.5%) 5.9% Median 2.0x 14.6x 2.0x 11.4x 11.3% 11.7% (1.0%) 4.2%
Aircraft - Suppliers & Aftermarket Rockwell Collins $ 28,871 $ 6,822 $ 1,512 4.2x 19.1x 3.3x 13.9x 23.8% 23.3% 0.3% 30.5% TransDigm Group 25,454 3,504 1,581 7.3x 16.1x 6.9x 13.8x 43.3% 48.2% 17.2% 12.0% Thales Group 20,999 16,467 1,990 1.3x 10.6x 1.1x 8.5x 12.1% 12.1% 5.5% 13.6% Hexcel 6,484 1,945 445 3.3x 14.6x 3.0x 12.7x 22.6% 23.4% 7.7% (1.9%) Curtiss-Wright 6,006 2,225 437 2.7x 13.8x 2.6x 12.6x 19.2% 19.5% (4.4%) 6.6% Moog 3,773 2,498 306 1.5x 12.3x 1.4x 10.8x 12.7% 12.7% (4.5%) 2.2% Esterline Technologies 2,799 2,002 299 1.4x 9.4x 1.4x 9.4x 13.6% 15.4% (0.5%) 0.7% Triumph Group 2,776 3,292 143 0.8x 19.4x 0.9x 8.8x (23.5%) 12.2% (0.1%) (9.0%) Ultra Electronics 1,662 1,066 177 1.6x 9.4x 1.5x 8.6x 16.6% 17.8% (4.0%) (2.2%)
Mean 2.7x 13.8x 2.4x 11.0x 15.6% 20.5% 1.9% 5.8% Median 1.6x 13.8x 1.5x 10.8x 16.6% 17.8% (0.1%) 2.2% Source: Pitchbook LTM: Trailing Twelve Months NTM: Next Twelve Months
Recent M&A Transactions – Government Services & Defense Target Information Buyer Information EV Information /LTM Close Date Name Industry Buyer Buyer Classification $M /LTM Rev EBITDA Pending Praxis Engineering Technologies, Inc. C4ISR CSRA, Inc. Public Strategic 235.0 1.9 x N/A Pending Rocky Research Other DC Capital Partners, LLC P/E Sponsor N/A N/A N/A Pending Themis Computer C4ISR Mercury Systems, Inc. Public Strategic 180.0 3.2 x 13.7 x Pending Globecomm Systems, Inc. C4ISR HPS Investment Partners [Tennenbaum Capital Partners] P/E Backed Strategic N/A N/A N/A Pending Datapipe, Inc. IT Services Apollo Global Management, LLC [Rackspace US, Inc.] P/E Backed Strategic N/A N/A N/A Pending ImageSat International N.V. (53.6% Stake) C4ISR First Israel Mezzanine Investors Fund (FIMI) P/E Sponsor 40.0 N/A N/A Pending Vencore, Inc. & KeyPoint IT Services DXC Technology Co. Public Strategic N/A N/A N/A Pending No Magic, Inc. Other Dassault Systemes S.A. Public Strategic N/A N/A N/A Pending Exa Corporation Other Dassault Systemes S.A. Public Strategic 500.0 6.9 x N/A Pending Antkowiak Design Group, Inc. (ADG Creative) Other Chenega Corporation (MIOS) Private Strategic N/A N/A N/A 12/18/17 Janus Global Operations LLC Other DC Capital Partners, LLC P/E Sponsor N/A N/A N/A 12/15/17 CH2M Hill Companies, Ltd. Other Jacobs Engineering Group, Inc. Public Strategic 3,270.0 N/A N/A 12/06/17 GAP Solutions, Inc. Other Thomas H. Lee Partners, L.P. [System One Holdings LLC] P/E Backed Strategic N/A N/A N/A 12/01/17 Merlin International Inc. IT Services Xator Corp. Private Strategic N/A N/A N/A 11/17/17 Onvia, Inc. Other Deltek, Inc. [Roper Technologies, Inc.] Public Strategic 70.0 2.8 x 36.8 x 11/17/17 Brocade Communications Systems, Inc. C4ISR Avago Technologies U.S. Inc. Public Strategic 5,900.0 N/A N/A 11/16/17 Decision Labs LLC IT Services KKR & Co. L.P. [Accuvant, Inc.] P/E Backed Strategic N/A N/A N/A 11/14/17 Hypori, Inc. C4ISR Intelligent Waves, LLC Private Strategic N/A N/A N/A 11/14/17 Whitney, Bradley & Brown, Inc. (WBB) Other H.I.G Private Equity P/E Sponsor N/A N/A N/A 11/08/17 Liquid Robotics, Inc. C4ISR The Boeing Company Public Strategic N/A N/A N/A 11/03/17 1st American Systems and Services, LLC C4ISR ABSS Solutions, Inc. Private Strategic N/A N/A N/A 11/02/17 Morphick, Inc. IT Services Booz Allen Hamilton, Inc. Public Strategic N/A N/A N/A 11/02/17 Advanced Technical and Educational Consultants Other L2 Defense, Inc. Private Strategic N/A N/A N/A 11/02/17 Dominion Consulting, Inc. Other TeraThink Corp. Private Strategic N/A N/A N/A 11/02/17 MesoScribe Technologies, Inc. Other CVD Equipment Corporation Private Strategic N/A N/A N/A 10/25/17 JBS International, Inc. Other Blue Cross and Blue Shield of South Carolina Private Strategic N/A N/A N/A 10/24/17 BTP Systems, LLC C4ISR Serco Group PLC Public Strategic 20.0 1.0 x 6.7 x 10/20/17 Peak Democracy, Inc. IT Services OpenGov, Inc. Private Strategic N/A N/A N/A 10/17/17 Manning Service, Inc. IT Services Intelligent Decisions, Inc. Private Strategic N/A N/A N/A 10/04/17 Global Technical Services, Inc. Other Novume Solutions, Inc. Private Strategic 3.8 0.1 x N/A 10/03/17 DigitalGlobe, Inc. C4ISR MacDonald, Dettwiler and Associates Ltd. (MDA) Public Strategic 3,600.0 5.1 x N/A 10/02/17 InfoZen, Inc IT Services ManTech International Corp. Public Strategic 180.0 1.8 x N/A 10/02/17 Xebec Global Corporation C4ISR Arlington Capital Partners P/E Sponsor N/A N/A N/A 09/27/17 Solidyn Solutions, Inc. C4ISR Arlington Capital Partners [Polaris Alpha Holdings, LLC) P/E Backed Strategic N/A N/A N/A 09/27/17 CyberCore Technologies, LLC C4ISR Enlightenment Capital P/E Sponsor N/A N/A N/A 09/26/17 Silverback 7, Inc. Other Patriot Defense Group LLC Private Strategic N/A N/A N/A 09/25/17 Versar, Inc. Other Kingswood Capital Management, LLC P/E Sponsor 51.6 0.5 x N/A 09/25/17 Surveillance and Cyber Security Solutions, LLC IT Services Mission Solutions Group (MSG), Inc. Private Strategic N/A N/A N/A 09/25/17 CIS Secure Computing, Inc. C4ISR Acorn Growth Companies P/E Backed Strategic N/A N/A N/A 09/15/17 Ocean Aero, Inc. C4ISR Lockheed Martin Corporation Public Strategic N/A N/A N/A 09/13/17 CDI Corp. IT Services AE Industrial Partners, LLC P/E Sponsor 154.2 0.2 x N/A 09/11/17 Control Point Corp. (CPC) C4ISR Ricardo plc [Ricardo Defense Systems, LLC] Public Strategic 10.2 N/A N/A 09/11/17 Cadmus Group, Inc. Other Enlightenment Capital P/E Sponsor N/A N/A N/A 09/11/17 Defense Group, Inc. C4ISR SOS International, LLC (SOSi) Private Strategic N/A N/A N/A 09/08/17 L3 Adaptive Methods, Inc. Other L3 Technologies, Inc. Public Strategic N/A N/A N/A 08/31/17 Blue Canopy Group, LLC IT Services Jacobs Engineering Group, Inc. Public Strategic N/A N/A N/A 08/28/17 RedOwl Analytics, Inc. IT Services Raytheon Co. [Forcepoint] Public Strategic N/A N/A N/A 08/15/17 NCI, Inc. IT Services H.I.G. Capital P/E Sponsor 283.0 0.9 x 9.8 x 08/08/17 Phase One Consulting Group, LLC Other Accenture plc Public Strategic N/A N/A N/A 08/01/17 Nextnine, Inc. IT Services Honeywell International, Inc. Public Strategic N/A N/A N/A 07/31/17 Telecommunications Support Services, Inc. C4ISR Acorn Growth Companies [AGC Aerospace & Defense] P/E Backed Strategic N/A N/A N/A 07/25/17 Data Clairvoyance Group, Inc. Other Thoma Bravo, LLC [Infogix, Inc.] P/E Backed Strategic N/A N/A N/A 07/18/17 KMS Solutions, LLC IT Services Subsystems Technology, Inc. Private Strategic N/A N/A N/A 07/18/17 Deltenna Limited C4ISR Cubic Corp. Public Strategic N/A N/A N/A 07/07/17 Engle Training and Design Group, Inc. IT Services Greycells Technologies LLC Private Strategic N/A N/A N/A 07/07/17 Smiths Group plc [global explosive trace detection business] Other OSI Systems, Inc. Public Strategic 80.5 1.2 x N/A 07/06/17 Superior Resource Group, Inc. Other White Wolf Capital, LLC [NSC Technologies] P/E Backed Strategic N/A N/A N/A 07/06/17 Project Performance Company, LLC IT Services Data Systems Analysts, Inc. Private Strategic 20.0 N/A N/A
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com
Recent M&A Transactions – Government Services & Defense Target Information Buyer Information EV Information /LTM Close Date Name Industry Buyer Buyer Classification $M /LTM Rev EBITDA 07/05/17 Tribridge Holdings, LLC Other DXC Technology Co. Public Strategic N/A N/A N/A 07/05/17 NES Associates, LLC Cyber / Intel CSRA, Inc. Public Strategic 105.0 N/A N/A 06/30/17 V1 Analytical Solutions C4ISR National Technologies Associates Private Strategic N/A N/A N/A 06/30/17 CB&I Corp. [Capital Services] Other Veritas Capital Fund Management P/E Sponsor 700.0 0.3 x N/A 06/23/17 American K-9 Detection Services, LLC (AMK9) Other Apollo Global Management, LLC [Constellis Group, Inc.] P/E Backed Strategic N/A N/A N/A 06/16/17 Natoma Technologies, Inc. IT Services Red River Computer Co., Inc. Private Strategic N/A N/A N/A 06/13/17 FCi Federal, Inc. Technical Services Platinum Equity Holdings [PAE] P/E Backed Strategic N/A N/A N/A 06/05/17 SWN Communications Inc. Other Veritas Capital Fund Management [OnSolve] P/E Backed Strategic N/A N/A N/A 06/01/17 Next Digital Solutions, LLC IT Services Fila Group, LLC Private Strategic N/A N/A N/A 05/31/17 ABM Government Services, LLC Other The GC Companies, LLC [Valiant Integrated Services] P/E Backed Strategic 35.5 N/A N/A 05/22/17 Harris Corp. [Government IT Service Business] IT Services Veritas Capital Fund Management P/E Sponsor 690.0 0.6 x N/A 05/22/17 Open Water Power, Inc. Other L3 Technologies, Inc. Public Strategic N/A N/A N/A 05/08/17 Schafer Corp. IT Services AE Industrial Partners, LLC [Belcan, LLC] P/E Backed Strategic N/A N/A N/A 05/03/17 Advatech Pacific, Inc. C4ISR General Dynamics Corp. Public Strategic N/A N/A N/A 05/01/17 Peraton Corp. IT Services Veritas Capital Fund Management P/E Sponsor 690.0 0.6 x N/A 04/21/17 Centerra Group Other Apollo Global Management, LLC [Constellis Holdings, LLC] P/E Backed Strategic N/A N/A N/A 04/18/17 InfoReliance Corp. Cyber / Intel Lindsay Goldberg [ECS-Federal] P/E Backed Strategic N/A N/A N/A 04/11/17 The Reports and Requirements Company, LLC (R2C) C4ISR Buchanan & Edwards, Inc. Private Strategic N/A N/A N/A 04/11/17 Human Solutions, Inc. (HSI) Technical Services The GF Fund [Oasis Systems, LLC] P/E Backed Strategic N/A N/A N/A 04/04/17 Sotera Defense Solutions, Inc. Cyber / Intel KeyW Corp. Public Strategic 235.0 1.0 x 9.8 x 04/03/17 Delta Microwave, LLC Other Mercury Systems, Inc. Public Strategic 40.5 3.2 x N/A 03/31/17 Endgame, Inc. [U.S. federal government services business] Cyber / Intel Accenture Plc Public Strategic N/A N/A N/A 03/31/17 Hewlett Packard Enterprise [Enterprise Services] IT Services CSC Public Strategic 8,500.0 0.5 x N/A 03/27/17 Day1 Solutions, Inc. IT Services Deloitte Touche Tohmatsu (UK) Private Strategic N/A N/A N/A 03/17/17 OceanServer Technology, Inc. Other L3 Technologies, Inc. Public Strategic N/A N/A N/A 02/21/17 Telos Corp [2.5%] Cyber / Intel Enlightenment Capital P/E Sponsor N/A N/A N/A 02/21/17 IAP Research, Inc. Other BAE Systems plc (UK) Public Strategic N/A N/A N/A 02/20/17 1901 Group, Inc. IT Services Enlightenment Capital P/E Sponsor N/A N/A N/A 02/20/17 The Woods Hole Group, Inc. Other CLS (France) P/E Backed Strategic N/A N/A N/A 02/01/17 Optiv Security, Inc. Cyber / Intel KKR & Co. L.P. Public Strategic N/A N/A N/A 02/01/17 Owl Computing Technologies, Inc. Cyber / Intel DC Capital Partners, LLC [Acuity Technologies Holding Co.] P/E Backed Strategic N/A N/A N/A
Target Industry Buyer Classification P/E Sponsor Cloud / Data Cyber / Intel Other 13% Analytics 9% 35% 7% Public P/E Backed Strategic Strategic 40% Technical 24% Services 3% IT Services C4ISR 27% Private 18% Strategic 23%
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com
Recent M&A Transactions – Aerospace
Target Information Buyer Information EV Information /LTM Close Date Name Industry Buyer Buyer Classification $M /LTM Rev EBITDA Pending Rockwell Collins, Inc. Electronics United Technologies Public Strategic 22,750.0 2.8 x N/A Pending CPI International, Inc. Electronics Odyssey Investment Partners, LLC P/E Sponsor 800.0 1.6 x N/A Pending Anaren, Inc. Electronics TTM Technologies, Inc. Public Strategic 775.0 3.5 x 14.2 x Pending Sparton Corp. Engineering Ultra Electronics Holdings Plc Public Strategic 234.8 0.6 x N/A Pending Anodyne Electronics Manufacturing Corp. Electronics Structural Monitoring Systems Plc (SMS) Public Strategic 7.9 N/A N/A Pending Infotech Aerospace Services, Inc. (IASI) Engineering United Technologies [Pratt & Whitney] Public Strategic 10.9 N/A N/A Pending Sigma Bravo Pty Ltd Other KBR Inc. Public Strategic N/A N/A N/A Pending Bombardier, Inc. [C Series Aircraft Limited Partnership] Other Airbus Group SE Public Strategic N/A N/A N/A Pending WestWind Technologies, Inc. (WTI) MRO Strata-G Solutions, Inc. Private Strategic N/A N/A N/A Pending Asian Compressor Technology Services Ltd. (ACTS) MRO Blackstone Group L.P. [MB Aerospace Limited] P/E Backed Strategic 60.0 N/A N/A Pending B&F Design, Inc. MRO Cyient Limited Public Strategic N/A N/A N/A Pending Metals Testing Co Inc MRO Bridgepoint Capital Ltd. [Element Materials Technology] P/E Backed Strategic N/A N/A N/A 12/22/17 Encore Composite Holdings, Inc. MRO AE Industrial Partners P/E Backed Strategic N/A N/A N/A 12/15/17 Oxford Performance Materials, Inc. (OPM) Structures & Components Hexcel Corp. Public Strategic N/A N/A N/A 12/15/17 Wright Tool Company Structures & Components Federal Resource Supply Company Private Strategic N/A N/A N/A 12/12/17 Automated Dynamics Structures & Components Trelleborg AB [Trelleborg Sealing Solutions] Public Strategic N/A N/A N/A 12/12/17 Colfax Corp. [Fluid Handling Business] Structures & Components CIRCOR Intl Inc. Public Strategic 855.0 N/A N/A 12/11/17 CDI Aerospace & Industrial Equipment Engineering AE Industrial Partners [Belcan LLC] P/E Backed Strategic N/A N/A N/A 12/04/17 Laser Depth Dynamics, Inc. (LDD) Other IPG Photonics Corp. Public Strategic N/A N/A N/A 12/04/17 Excelitas Technologies Corp. Other AEA Investors L.P. P/E Backed Strategic 847.0 N/A N/A 12/01/17 Telefonix, Inc. Other Astronics Corp. Public Strategic 104.0 1.5 x N/A 11/30/17 True Position Technologies, Inc. Structures & Components HBD Industries Inc. Private Strategic N/A N/A N/A 11/29/17 GEM City Engineering Co. Other CapitalWorks LLC P/E Sponsor N/A N/A N/A 11/17/17 Chassis Plans, LLC Other Aeronautics, Ltd. Public Strategic 6.0 N/A N/A 11/15/17 Cadence Aerospace, LLC Structures & Components Arlington Capital Partners P/E Sponsor N/A N/A N/A 11/14/17 Hydrix Group Pty Ltd. Other Panorama Synergy Limited Public Strategic 1.5 N/A N/A 11/13/17 Surrey Satellite Technology US, LLC [an Airbus Company] MRO General Atomics Corp. Private Strategic N/A N/A N/A 11/09/17 Avenge, Inc. Other MAG DS Corp. Private Strategic 45.0 N/A N/A 11/08/17 Aurora Flight Sciences Corp. Structures & Components Boeing Co. Public Strategic N/A N/A N/A 11/08/17 Tex Tech Industries, Inc. Structures & Components Arlington Capital Partners P/E Backed Strategic N/A N/A N/A 11/07/17 Tecnologie Industriali e Aeronautiche Structures & Components Elettronica Aster S.p.A. Private Strategic N/A N/A N/A 11/06/17 Mistral Solutions Other AXISCADES Engineering Technologies Ltd Public Strategic N/A N/A N/A 11/03/17 Vector Aerospace Corp. MRO Veritas Capital Fund Management, LLC [StandardAero Aviation Holdings, Inc.] P/E Backed Strategic N/A N/A N/A 11/02/17 MesoScribe Technologies, Inc. Electronics CVD Equipment Corporation Private Strategic N/A N/A N/A 11/01/17 Applied Composites Engineering, Inc. Structures & Components AE Industrial Partners, LLC (AEI) [AC&A, LLC] P/E Backed Strategic N/A N/A N/A 11/01/17 F.M.I., Inc Structures & Components AE Industrial Partners, LLC (AEI) P/E Sponsor N/A N/A N/A 11/01/17 UltiSat, Inc. Structures & Components TA Associates Management, L.P. [SpeedCast Ltd] P/E Backed Strategic N/A N/A N/A 10/31/17 Butterfield Industries (BI) Structures & Components Acorn Growth Company [Raisbeck Engineering, Inc.] P/E Backed Strategic N/A N/A N/A 10/31/17 SKTRAC Systems Ltd Electronics Jordan Company L.P. [Drew Marine USA Inc.] P/E Backed Strategic N/A N/A N/A 10/23/17 Connecticut Coining, Inc. Structures & Components MavenHill Capital P/E Sponsor N/A N/A N/A 10/18/17 Scott Instrument Co. MRO Sunvair Aerospace Group [Aviation Avionics and Instruments Inc.] Private Strategic N/A N/A N/A 10/13/17 Sepang Aircraft Engineering Sdn Bhd MRO Airbus Group SE [Airbus SAS] Public Strategic N/A N/A N/A 10/12/17 Fortner Engineering & Manufacturing MRO Warburg Pincus, LLC Private Strategic N/A N/A N/A 10/04/17 Luciad N.V. Electronics Hexagon AB Public Strategic N/A N/A N/A 10/03/17 MW Industries, Inc. Structures & Components American Securities LLC P/E Sponsor N/A N/A N/A 10/02/17 Syntronics, LLC Other General Atomics Corp. Private Strategic N/A N/A N/A 10/02/17 Structil S.A. Structures & Components Hexcel Corp. Public Strategic N/A N/A N/A 09/18/17 Triumph Processing -- Embee Division, Inc. Structures & Components Watson Family Investments, LLC P/E Sponsor N/A N/A N/A 09/15/17 AeroAntenna Technologies, Inc. (AAT) Electronics HEICO Corp. Public Strategic 316.5 N/A N/A 09/12/17 Doss Aviation MRO L3 Technologies, Inc. Public Strategic N/A N/A N/A 09/11/17 Lightning Diversion Systems, Inc. Structures & Components Ducommun Inc. Public Strategic 60.0 N/A N/A 09/05/17 Aroma Structures & Components Activa Capital [Mecadaq] P/E Backed Strategic 21.7 N/A N/A 08/31/17 Pattonair MRO Platinum Equity Holdings (PEH) P/E Sponsor N/A N/A N/A 08/11/17 Bandy Machining Inc. Structures & Components JW Hill, LLC P/E Sponsor N/A N/A N/A 07/05/17 Richland Technologies, LLC (RTL) Electronics Mercury Mission Systems International (MMSI) Private Strategic N/A N/A N/A 06/27/17 Fuller Road Management Corp. [STC-MEMS Wafer Manufacturing Facility and Electronics Akoustis Technologies, Inc. Public Strategic 2.8 N/A N/A 06/27/17 Jet Edge, Inc. Structures & Components Spell Capital Partners, LLC P/E Sponsor N/A N/A N/A 06/27/17 Vortex Aviation, Inc. MRO AE Industrial Partners, LLC [Kellstrom Aerospace] P/E Backed Strategic N/A N/A N/A
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com
Recent M&A Transactions – Aerospace Target Information Buyer Information EV Information /LTM Close Date Name Industry Buyer Buyer Classification $M /LTM Rev EBITDA 06/22/17 ISEI Electronics Safran S.A. Public Strategic N/A N/A N/A 06/20/17 Carbon by Design Structures & Components HEICO Corp. Public Strategic N/A N/A N/A 06/20/17 Space-Lok, Inc. Structures & Components Rosewood Private Investments [Novaria Group] P/E Backed Strategic N/A N/A N/A 06/19/17 Applied Poleramic Inc (API) Structures & Components Kaneka Corp. [Kaneka Americas Holding, Inc.] Public Strategic 15.0 N/A N/A 06/15/17 Dunlop Aircraft Tyres Ltd. Structures & Components Liberty Hall Capital Partners P/E Sponsor 135.0 N/A N/A 06/14/17 Putnam RF Filters, Inc. Electronics KleinPartners Capital Corp. [Epec, LLC] P/E Backed Strategic N/A N/A N/A 06/13/17 DST Computer Services S.A. MRO Hexagon PPM Public Strategic N/A N/A N/A 06/13/17 Isselnord SRL MRO Fincantieri - Cantieri Navali Italiani S.p.A. Public Strategic N/A N/A N/A 06/13/17 OC Robotics Ltd MRO General Electric Co. Public Strategic N/A N/A N/A 06/12/17 Gardner Aerospace Ltd. Structures & Components Shaanxi Ligeance Mineral Resources (SLMR) [Chengdu Aerospace Superalloy Public Strategic 405.0 2.4 x N/A 06/06/17 Fore Machine Company, Inc. [Aero Components, Inc.] Structures & Components P4G Capital Management, LLC P/E Sponsor N/A N/A N/A 06/06/17 HALO Industries, Inc. Structures & Components Elite Aerospace Group, Inc. (EAG) Private Startegic N/A N/A N/A 06/05/17 CM Equity Partners, L.P. (CMEP) [Graco Supply & Integrated Services, Inc.] Structures & Components American Securities LLC [Royal Adhesives & Sealants LLC] P/E Backed Strategic N/A N/A N/A 06/01/17 BerrieHill Research Corp. (BRC) Electronics Applied Research Associates, Inc. (ARA) Private Startegic N/A N/A N/A 06/01/17 Qualiseal Technology Structures & Components EnPro Industries, Inc. Public Strategic N/A N/A N/A 05/30/17 Naval Shipyard SA - Stocznia Marynarki Wojennej SA (SMW) MRO Polish Armaments Group (Polska Grupa Zbrojeniowa - PGZ) Public Strategic 60.1 N/A N/A 05/16/17 Noliac A/S Electronics CTS Corp. Public Strategic N/A N/A N/A 05/12/17 Cletronics, Inc. Electronics TT Electronics plc Public Strategic 1.2 N/A N/A 05/12/17 EuroAvionics GmbH Electronics Kohlberg Kravis Roberts & Co. (KKR) [Hensoldt Sensors GmbH] P/E Backed Strategic N/A N/A N/A 05/11/17 Apollo Video Technology, LLC Electronics Audax Group [Luminator Technology Group, LLC] P/E Backed Strategic N/A N/A N/A 05/09/17 Camtech Technologies Electronics American Standard Circuits, Inc. Private Strategic N/A N/A N/A 05/03/17 Microphase Corp. [50.2%] Electronics Digital Power Corp. Public Strategic 2.0 0.3 x N/A 05/02/17 Radio Waves, Inc. Electronics Genstar Capital, LLC [Infinite Electronics, Inc.] P/E Backed Strategic N/A N/A N/A 04/21/17 International Transducer Corp. (ITC) Electronics Gavial Holdings, Inc. P/E Sponsor N/A N/A N/A 04/21/17 Puritan Products, Inc. Electronics New Mountain Capital, LLC [Avantor Performance Materials, LLC] P/E Backed Strategic N/A N/A N/A 04/19/17 Pho-Tronics, Inc. Electronics H&T Global Circuits Private Strategic N/A N/A N/A 04/13/17 Lynn Electronics, Inc. Electronics NewSpring Capital P/E Sponsor 14.3 N/A N/A 04/13/17 Quintus Technologies AB Structures & Components Kobe Steel Ltd Public Strategic 115.0 N/A N/A 04/10/17 Accessory Technologies Corp. (ATC) MRO Wencor Group, LLC P/E Sponsor N/A N/A N/A
Target Industry Buyer Type
Other P/E Sponsor 9% 18% Structures & Public Components Electronics Strategic 40% P/E Backed 45% 32% Strategic 19%
MRO Private 19% Strategic 18%
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com
Aronson Capital Partners
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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 Corporate Finance Financial Advisory • Sell & Buy-Side M&A • Recapitalizations & Restructurings • Internal Capital Transaction Advisory • Private Equity Investments • Common & Preferred Equity • Independent Corporate Valuations • Management Buyouts • Debt Capital Raises • Fairness Opinions • Divestitures • Minority Equity Investments • Strategic Alternatives Assessments • Asset Sales
805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com