The M&A word is out

Steve LeSueur

It's no secret that mergers and acquisitions are on the rise. In the government IT market, the number of M&As rose from 47 in 2001 to 64 in 2002 to 73 in 2003. And the aggregate value of those deals jumped from $3.8 billion in 2002 to $5.9 billion last year.

Investment bankers said that a hot government IT market and investors eager to put their money someplace other than ice-cold commercial IT companies are driving the M&A surge. That's evident at the investment conferences that serve the government M&A community, where attendance has doubled in the last several years.

Senior Editor Nick Wakeman talked to executives from some of the newer players in the government M&A market -- midsized companies such as DigitalNet, Perot Systems and Stanley Associates -- to find out what kinds of companies they are targeting for purchase.

Executives from six companies came together at the Tower Club in Vienna, Va., for our front-page photo. "There was a lot of joking among them, especially about buying each other," Nick said. "One said, 'I'll take the companies you don't want.' "

Nick was surprised at how openly these executives talked about the types of companies they want to buy and what they are trying to achieve. Read what they told him in the feature story that begins on page 33.

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