The market for merger and acquisition transactions in the government contracting market seems poised for a strong finish in 2010, writes John Hagan at BB&T Capital Markets/Windsor Group.
Although budget cuts and insourcing are devouring certain segments of the government services market, there are many segments of the market in which growth opportunities continue to abound, says John Hagan of BB&T Capital Markets/Windsor Group.
Tax, budget and conflict of interest policies will drive more merger and acquisition activity throughout 2010 as the impact of these policies is felt in the government services market.
Although financial buyers can be outstanding choices for sellers of government contracting businesses, they present unique challenges when compared to the strategic buyer alternative, says John Hagan, co-head of the defense and government services group at BB&T Capital Markets/Windsor Group.
The top-performing companies are positioning themselves through targeted acquisitions in faster growing segments of the market, often with proprietary technologies.
Gradual improvements in the nation's economy will produce an increasingly favorable environment in the coming months for mergers and acquisitions in the defense and government services markets.
As large prime contractors seek to replace business lost from potential budget cuts, they look to the universe of publicly held midtier companies as targets.
