M&A activity slows in second quarter

Mergers and acquisition activities in the government services market slowed in the last quarter, but there are expectations that the deal making will pick up as the year progresses.

According to a report by the investment bank KippsDeSanto, 16 acquisitions were announced during the quarter ended June 30, compared to 28 for the same quarter last year.

Some of the notable deals according to KippsDeSanto include CACI International’s acquisition of Delta Solutions, Northrop Grumman’s deal for M5 Network Security and D.C. Capital’s acquisition of Catapult Technology.

Increasing fears of cuts from sequestration is driving more companies to consider acquisitions as a way to restore revenue, the report said.

The investment bank also sees more companies focusing their portfolios and responding to the cost consciousness at government agencies. Companies are streamlining operations and are more sensitive to conflict of interest concerns.

One example, the KippsDeSanto report cited was L-3 Communications spin-off of Engility, which is focused on systems engineering and technical assistance work.

Other notable mergers and acquisitions cited in the report were Science Applications International Corp.’s acquisition of maxIT Healthcare, Unicom Systems’ acquisition of GTSI Corp., and the Jordan Co.’s purchase of the VT Group.