M&A

3 new deals and a finished fundraising round show how GovCon is closing 2020 on a hot streak

The rush is rolling on for acquirers, those wanting to be acquired and some just looking for added financial firepower before 2020 ends as evidenced by multiple transactions unveiled within the past week.

NuWave Solutions, which received private equity backing in June, has completed the company’s second acquisition since being acquired. Its latest deal picks up the government services business of ProModel Corp.

ProModel Government Services provides predictive and prescriptive analytic software tools to defense and federal civilian agencies looking to visualize complex and disparate data, synchronize operational needs, mitigate risk and optimize resources to support strategic and tactical decisions.

AE Industrial Partners acquired NuWave in June, then supported the purchase of BigBear that was announced in early December.

Investment bank Baird advised ProModel on the government business’ sale to NuWave, whose announcement came in the same week that Arlington Capital Partners-backed BlueHalo revealed two acquisitions of its own.

Akerman LLP served as legal adviser and Ernst & Young LLP served as financial adviser to NuWave. Klehr Harrison Harvey Branzburg LLP served as legal adviser to ProModel.

A second acquisition announced this week is a done deal that sees Raytheon Technologies complete its almost $350 million acquisition of small satellite maker Blue Canyon Technologies.

First announced in November, this transaction adds to Raytheon a business focused on giving the U.S. military continuous communications via a future high-speed network in low Earth orbit.

Deals where one company buys another are not the only type taking place these days. Some businesses just want additional support to keep doing what they are doing -- developing a technology that poses potential disruption to both industry and government customers.

Epirus, a Los Angeles region-headquartered startup focused on counter-drone technologies, has closed a $70 million fundraising round in an effort to faster take its products to market.

This Series B financing round announced Thursday was led by venture investment firm Bedrock Capital and notably includes one of the defense industry’s largest players in L3Harris Technologies.

L3Harris will work with and is investing in Epirus to create greater power efficiencies in some of the former’s existing systems. Epirus designed its SmartPower management technology to help electronics produce higher levels of power density without special cooling techniques required.

Epirus’ core product line also involves the use of high-powered microwave and electromagnetic pulse methods for counter-unmanned aerial systems missions and others involving radio frequencies.

Epirus has also stood up an office in Tysons Corner, Virginia as part of its defense market push.

This new fundraising round also comes six months after Epirus formed a strategic supplier agreement that gives Northrop Grumman exclusive access to the former’s flagship Leonidas system.

Northrop revealed an equity investment of its own earlier this month in Philadelpha-based wireless system startup Deepwave Digital.

Other new investors in Epirus for the Series B round include Piedmont Capital Investments, 8VC, Fathom VC and Greenspring Associates. Epirus fetched $17 million in a 2019 Series A fundraising round led by 8Vc.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also connect with him on LinkedIn.

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