Big Is Better, Or So It Seems

Big Is Better, Or So It Seems<@VM>TechToon

Trish Williams

The evolving federal information technology services marketplace offers a nourishing environment for merger and acquisition activities in 2000.

The coming year will build on a busy 1999 marked by 49 federal IT deals worth more than $4 billion ? and the clock is still ticking. Industry insiders expect at least two more acquisitions to close by the end of the year.

Data compiled by investment banking firm Houlihan Lokey Howard & Zukin show that the number of federal deals vaulted from nine in 1995 to 49 in 1999, a whopping 444 percent increase.

Fast-growing systems integrators, such as Anteon Corp., SI International Inc. and Veridian Inc., are among the new crop of aggressive deal makers.

But look for established players such as Affiliated Computer Services Inc., CACI International Inc., Computer Sciences Corp., Keane Inc., Litton Industries Inc., Northrop Grumman Corp., Science Applications International Corp. and Titan Corp. to step up their deal making.

As Washington Technology Staff Writer Nick Wakeman points out in a cover story capping this year's M&A activity, these companies still have the chops for deals.

The hot properties today are companies with hard-to-get customers such as the intelligence agencies, and those with essential skills in electronic commerce, software engineering and network engineering.

For companies aspiring to be winners at the federal contracting table, even more mass will be required as agencies continue to consolidate small contracts into bigger ones and leap into outsourcing.

As companies position themselves in this dynamic marketplace, attracting and retaining top-flight talent becomes more imperative. With this issue, Washington Technology profiles pressing workplace issues such as hiring, retention, incentives and morale boosters companies are dangling before employees.

Check out this new section, which begins on page 42, and we invite you to tell us what your company is doing to stand out in the crowd.

williams@pnbi.comTech Toon

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