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‒ The highly favorable budgetary environment
continues to drive an extremely acquisitive
Defense and Government Services market.
‒ The FY2019 Defense Budgetary Cap of $674
billion represents an increase of 3% for military
spending.
‒ 63 Transactions in the Defense and Government
Services sector were completed in Q3 2018.
‒ Acquirers continue to search for acquisition
partners whose capabilities align with federal
spending priorities, specifically: Cyber Security,
IT Modernization, and Cloud Computing.
‒ Private equity buyers continued to play an
influential role in the market and accounted for
33 of the 63 transactions in Q3 2018. Private
equity firms such as Veritas Capital, AE Industrial
Partners, Arlington Capital, and NewSpring
Capital all completed acquisitions in the
government services sector in Q3 2018.
‒ Transactions among large primes, such as SAIC’s
purchase of Engility, continue to drive M&A
activity by forcing middle-market consolidation
in order to remain competitive.
Defense and Government Services M&A Transactions
M&A Activity Summary
3
Public Companies
Private Equity
Q3 2018 TMG DGS Transactions
Acquired By
Acquired By
Systems Engineering Business
44
54
60
56
57
62
63
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Acquired By
Acquired By
Acquired By
Acquired By
DGS TRANSACTION ACTIVITY