Author Archive

Jerry Grossman

Jerry Grossman is managing director at Houlihan Lokey Howard and Zukin.

Federal market retains strong investment appeal

Although forecasting the federal market has become more complicated and more uncertain, the relative stability of both large and small contractors and their growth potential makes for sound investment.

Federal contractors need the right stuff for success

Federal contractors must have strong attributes and depth to succeed amid slowing discretionary federal spending.


Opinion: How to trust your instincts in a troubled economy

Industry executives and investors are reassessing their acquisition strategies in the face of severe economic distress and are walking away from potential deals involving companies with contract-transition barriers and undistinguished capabilities.

Aligning portfolios with spending priorities

Management teams are rethinking their business strategies and making adjustments to their portfolios to ensure success in a turbulent economy.

Jerry Grossman | Disciplined acquisition strategy required

Forecasting business and market performance is much harder these days. Federal information technology executives and investors seeking to set strategies and expectations have many more considerations than usual.

The safe haven in an economic storm

Recent turmoil in debt and equity markets highlights the contrast between federally oriented businesses and companies serving private-sector customers. It reminds us of the attractive, fundamental characteristics of the government services industry: stability, visibility, predictable cash flows and modest capital requirements.

The rise of the hybrid government contractor

The slowing of federal budget growth increases the competitive challenge for government contractors, especially for the companies that no longer qualify as small businesses. In this tough environment, a company's distinguishing characteristics become even more important.

Don't rock the boat on small businesses

Recent Small Business Administration actions aimed at substantial increases in contract awards to small businesses are colliding with market realities and, in manyinstances, are counterproductive to the government getting its work done efficiently and cost effectively.

Recertification: One year later

SBA implemented a rule that became effective June 30, 2007, and requires companies that have been acquired to recertify their small-company status within 30 days of the deal closing. This rule has significantly altered transaction structures and valuations in the government services mergers and acquisitions market.

Prices hold firm for government M&A deals

Since 2004, the price-to-performance multiples of publiclytraded government technology services companies havetrended downward, while the valuations of mergers andacquisitions have held their ground. Is this rational,sustainable and likely to continue through this year and the next?

Rethinking the pure-play mandate

Most prospective buyers in the government services markets are seeking pure-play, federal-oriented targets. These acquirers are either already focused on thefederal segment and want to expand there or they are seeking to enter the federal arena. This approach essentially involves sticking to the market you know.

Welcome to the bipolar M&A market

The government services mergers and acquisition market has been consistently active since 2001. But today it's more of a bipolar M&A market driven by the small-business recertification requirements that took effect July 1.

Federal security market reaches maturity

Slowing growth in government spending has intensified contractors' search for othergrowth areas, particularly those with high priority, within the budgets at all levels of government.

Jerry Grossman | Acquisition path under major construction

We can expect to see larger merger-and-acquisition transactions in the federal market during the next year or two. The aggregate dollar volume of deals is likely to increase while the number of transactions may decline.

Jerry Grossman | To win in federal services, look forward

Many industry analysts and investors have expressed concern about the outlook for federal services companies. They seem to believe that the industry's best years are in the rearview mirror.

More oversight takes market back two steps

Congress should be increasing funding for improvements in the federal acquisition workforce.

Pure-play and services firms stick to knitting

Do what you do best to succeed in the public-sector market.

Keeping an eye on returns in a sluggish market

Merger and acquisition activity in the federal IT and government services markets has been strong for five years, coinciding with federal spending increases exceeding longer-term norms.

In the current climate, some gain a clear edge

A select group of companies will attract strong buyer interest this year.

Jerry Grossman | New SBA size further stratifies small business

Arguably, the Small Business Administration's final rule, announced Nov. 15, regarding small-business size recertification under long-term federal contracts has few beneficiaries in the long term, except, perhaps, unsuccessful small businesses.