MarketView Summer 2016

MarketView Summer 2016

8000 Towers Crescent Drive Suite 1200

Tysons Corner, Virginia 22182 703.442.1400

www.kippsdesanto.com

Aerospace / Defense and

Government Technology Solutions

http://www.kippsdesanto.com/


Aerospace / Defense and Government Technology Solutions MarketView

Summer 2016

Select Recent KippsDeSanto & Co. Advised Transactions

has been acquired by

July 2015


December 2015

August 2015

has sold its H&LS and D&P

business units to

Gleason Research

Associates Employee

Stock Ownership Trust


December 2015


October 2015 September 2015


a portfolio company of

has sold a minority

interest to

Professional Project

Services, Inc. Employee

Stock Ownership Trust

August 2015

&

have been acquired by

subsidiaries of

a subsidiary of

December 2015


March 2016

a subsidiary of

Miltec Corporation

General Atomics


May 2016


an unidentified party

June 2016

has acquired

July 2016


(1) Company filings

1


Summer 2016

Operational / Funding Environment Aerospace sector performance was mixed in 2Q16. After a slow April (34 net orders), Boeing bounced back sharply in May with 113, and dropped to 12 net orders in June. Boeing was hoping to start 3Q with strong momentum from a 109 unit, $25 billion, order from Iran Air, which would mark the biggest business deal between Iran and the U.S. since 1979, but recent House actions have cast doubt on the deal’s viability. Airbus showed more consistency in April and May with 82 and 70 net orders, respectively, but also recorded few bookings in June, with 27. Somewhat paradoxically, this strong net order performance, which augments each company’s record backlog, has led to concern increased production demand will further strain the supplier base. Softening emerging market economies, particularly in China, have resulted in the lowest global passenger demand growth rate since late 2014. Similarly, the recent United Kingdom exit from the European Union (“Brexit”) is expected to slow European GDP growth which is likely to deleteriously impact France-based Airbus, and, to a lesser degree, Boeing. Affected by the combination of these factors, near-term sector outlook remains tepid despite record airline profitability, as well as aforementioned Original Equipment Manufacturers (“OEM”) performance. OEMs entered the mid-July Farnborough Air Show hoping for an uptick in bookings for the remainder of the year to mitigate the relatively weak year-to-date (“YTD”) book-to-bill performance of roughly 0.6x – 0.7x.

In the defense sector, the House and Senate have each approved versions of the 2017 National Defense Authorization Act (“NDAA”), allocating Federal funds to the base defense and war spending budgets. The House passed a $576 billion defense spending bill which proposes an $18 billion transfer from the Overseas Contingency Operations (“OCO”) budget to the base budget, while the Senate passed a $602 billion bill that proposes aggressive acquisition reforms, including replacing the Pentagon’s chief weapons buyer’s office with two new defense undersecretaries for innovation and acquisition management. In line with the Pentagon’s request, both versions of the NDAA include increased research and development spending, a portion of which will fund the Third Offset Strategy, including an effort to make high-tech artificial intelligence a key weapon in the U.S.’s future warfare arsenal (previously discussed in our spring 2016 MarketView). The primary difference between the versions lies in the treatment of acquisition reform and funding structure. The bill will now be debated in conference, finalized, and sent to the White House for approval at the end of Government Fiscal Year (“GFY”) 2016. President Obama, however, has already informed Congress that he plans to veto the bill if changes are not made to the House’s proposed diversion of funds from OCO and the Senate’s proposed acquisition reforms. Though the Bipartisan Budget Act expires in GFY2017, defense funding is expected to remain relatively consistent, leading to reduced uncertainty and a positive near-term outlook.

The recent government technology solutions operational and contracting environment has been very active, evidenced by a number of prominent multi-billion dollar information technology (“IT”) contract vehicles that were awarded thus far in 2016 or are expected to be awarded in the second half of the year. Notably, the Centers for Medicare and Medicaid Services (“CMS”) recently awarded its 10-year, $25 billion IT services contract, Strategic Partners Acquisition Readiness Contract (“SPARC”). Of the 81 companies that won spots on SPARC, 54 are classified as set-aside and 27 as unrestricted. The General Services Administration (“GSA”) and the Office of Personnel Management (“OPM”) also recently awarded an $11.5 billion Human Capital and Training Solutions (“HCaTS”) contract to 109 businesses. Both SPARC and HCaTS are currently under protest. In addition to the large contracts already awarded this year, there are a number of high-profile contracts currently in the request-for-proposals (“RFPs”) stage and scheduled for award or release later this year. Specifically, GSA’s $50 billion Alliant 2 and $50 billion Enterprise Infrastructure Solutions (“EIS”), Defense Logistics Agency’s $6 billion J6 Enterprise Technology Services, and the Army’s $15 billion IT Enterprise Solutions 3. Given the number of sizable contracts expected to be awarded this year, it is likely that many of the awardees will be some of the best positioned companies for successful growth over the next five to 10 years.

Airbus and Boeing Net Orders and Cancellations(1)

574 530

1,419

805 833

1,203

1,5031,355

1,4561,432

1,036768

183288

70 95

189

116 81

136

116

176

340

118

103

110

44

47

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2010 2011 2012 2013 2014 2015 YTD 2016

Airbus Net Orders Boeing Net Orders Cancellations


http://www.lfsnews.com/assets/clients/kippsdesanto/template/MarketView_Spring2016.pdf

http://www.lfsnews.com/assets/clients/kippsdesanto/template/MarketView_Spring2016.pdf

(1) S&P Capital IQ, company filings, and KippsDeSanto research

2


Summer 2016

Capital Markets and Public Market Valuation Trends

After finishing the first quarter down 9.7%, aerospace stocks regained some ground in the second quarter, down 5.4% YTD through June 30th. After 12 months of decline, sector valuations appear to be stabilizing at approximately 8.0x NTM EBITDA. That said, the “cautious optimism” observed across the sector last quarter continued and may be shifting more towards the “cautious” end of the spectrum. While airlines reported record profits, industry reports show airline passenger demand growth slowed to a ~15 month low and load factors slipped slightly. Bombardier was the index’s biggest winner both for the quarter (up 46.8%) and YTD (up 54.8%). Performance drivers include two significant orders for its C Series jets (up to 75 from Air Canada in February and up to 125 from Delta in late April), EASA and FAA certifications for its CS100 in June, as well as continued discussion with the Canadian government to match Quebec’s $1 billion investment. Another big mover was Zodiac Aerospace; the company battled back from a 16.0% first quarter loss after rumors of a takeover bid from Safran surfaced. Embraer’s woes continued into the second quarter, down 26.5% on the year after reporting weak profits, shuttering its China factory due to lack of demand, and the emergence of corruption and money laundering allegations

against the soon-to-be ex-CEO.

Defense primes showed continued strength and formidable resilience, extending the Q1 rally to finish up 15.0% YTD while posting gains throughout the Brexit-induced turmoil. Valuations in the sector also continued their ascent from 10.7x last quarter to 11.1x. Except for a brief period following 9/11, sector valuations have reached a 20 year high. This positive momentum is largely attributable to the sector’s ability to generate consistent earnings, raise guidance, and return cash to shareholders. The strongest performer in the group, both during the quarter and YTD was L-3, up 22.7% on the year. This run-up was fueled by L-3’s portfolio and balance sheet reshaping activities (e.g., NSS divestiture, redemption of $300 million of debt, various strategic M&A initiatives, heightened focus on profitability) and a significant contract award ($1.9 billion contract to provide KC/KDC-10 aerial refueling tanker aircraft logistics support to the U.S. Air Force and the Netherlandic government until 2025). Northrop Grumman also posted big gains in the quarter, up 17.7% YTD, after Congress began discussions on possibly doubling future B-21 bomber purchases.

Government technology solutions stocks showed mixed results, falling 6.6% in 2Q16, resulting in a 2.1% loss YTD. CACI shares fell 15.2% due, at least in part, to weak 2017 guidance and a denied award protest. Despite similar headwinds, industry valuations hit multi-year highs, closing out 2Q16 at 9.9x, above the 9.7x high set in 4Q15. ManTech and Vectrus reported strong earnings supported by robust bookings and increased revenue visibility. ManTech shares rose 10.6% following its earnings announcement containing its highest quarterly book-to-bill ratio since 2008. Shares ended 2Q16 up 18.1%, fueled by its first quarterly revenue growth since 2011 and 2.1% share appreciation in the week following its acquisition of the Ocean’s Edge cyber business. Vectrus shares climbed 25.2% as it continued to deliver on its announced organic growth strategy. Modifications on Europe and Middle East contracts lengthened periods of performance and increased a strong funded backlog of $1.0 billion as well as cash flow visibility.

Year-Over-Year Q1 Revenue Comparison(1)

Relative Stock Price Performance(1) For the Six Months Ended on June 30,2016

Median Quarterly EV / NTM EBITDA Multiples(1)

75%

80%

85%

90%

95%

100%

105%

110%

115%

120%

Dec2015

Jan2016

Feb2016

Mar2016

Apr2016

May2016

June2016

Defense Primes Aerospace Government Technology Solutions S&P 500

(5.4%)

(2.1%)

2.7%

15.0%

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Defense Primes Aerospace Government Technology Solutions

8.0x

9.9x

11.1x

($ in millions) 1Q2016 1Q2015 Δ%

AAR $403 $380 6.0%

Hexcel 498 472 5.5%

Esterline 490 468 4.7%

B/E Aerospace 717 690 3.9%

Triumph 1,058 1,080 (2.1%)

Spirit 1,682 1,742 (3.5%)

LMI 87 92 (5.6%)

Average $705 $704 0.2%



3


Summer 2016

M&A Trends & Activity

A total of 52 deals were announced in the aerospace, defense, and government technology solutions sectors in 2Q16, 31 fewer than in 2Q15. Of these transactions, 16 were in aerospace, 25 were in defense, and 11 were in government technology solutions.

Aerospace and defense M&A activity in 2Q16 declined from 2Q15 – 41 deals compared to 64 during the same time period last year. Aerospace acquisition volume has seen a slowdown in activity over the last six months, as weakened global economies have hurt industry performance and dampened near-term prospects. Aerospace M&A activity was slower than last year across the board. Despite continued favorable debt market conditions and robust OEM backlogs, 2016 is likely to mark the first decline in aerospace M&A transaction volume after four years of dramatic increases.

Defense electronics dominated the overall defense M&A landscape, accounting for over 60% of the sector’s 25 2Q16 transactions. Representative deals include Smiths Group Plc.’s purchase of Morpho Detection, Inc., a manufacturer of detection systems for explosives, nuclear, and other materials, and TransDigm Group’s acquisition of Data Device Corporation, a provider of power control and data bus products to the military. Divestiture activity remains core to the portfolio strategy of industry players, especially among defense firms looking to prune underperforming divisions in the face of low margins. The nine announced divestitures in 2Q16 accounted for ~25% of defense transactions, in line with last year’s tally during the same period. Notable divestitures in 2Q16 include HanWha Techwin Co., Ltd.’s acquisition of Doosan DST Co., Ltd., a provider of armored vehicles, air defense systems, and land and sea-based launchers, from Doosan Investment Portfolio Holdings and Silverfleet Capital’s acquisition of Sigma Precision Components Ltd., a manufacturer of precision components for aerospace and high technology markets, from Avingtrans PLC.

Government technology solutions deal activity through the first half of 2016 is slightly below pace from 2014 and 2015, with 35 transactions YTD. Confidence in the sector remains high, as budget and funding visibility continues to drive strong public valuations and an emphasis on strategically focused acquisitions. Industry stability has been a key driver of the transactions consummated in the sector, as evidenced by deals such as KBR’s $600 million acquisition of Wyle. M&A focus on cybersecurity and intelligence solutions remains strong, accounting for nearly 42% of transactions in 2Q16. These deals, often driven by firms’ desire to acquire strategic capabilities, include the recent acquisition of The Van Dyke Technology Group by Jacobs Engineering. Priority funding areas, such as Health IT (“HIT”), also saw sustained M&A activity, and with the recent announcement of 81 awarded companies under CMS SPARC, it is likely to see even more as buyers seek strategic customer access through established platforms with strong past performance. Furthermore, the trend of large transactions and divestitures seen in 2015 continues to shake up the industry landscape, most recently with the announcement of the merger between Hewlett Packard Enterprise (“HPE”) and CSC (CSC having recently spun off its government services side in a merger with SRA). With CSC contractually prohibited from competing against CSRA for Federal contracts, HPE’s $3 billion public sector business may be a divestiture candidate, driving continued industry consolidation.

M&A Transaction Volume(1) For the Calendar Quarters 1Q11 – 2Q16

21 18 17 18 1425

17 21 17 14 1319 18 21

12 1622

2724

2924 25

1515

2932

20

38

20

2427

26 24

28

42

51

27

32

33

37

34

40

2516

1728

2222

24

25

24

35

1414 16

21

20

19

12

28

2719

19

13

24

11

53

61

6872

58

88

61

80

5854 53

68

80

91

51

76

82 83

7782

73

52

0

10

20

30

40

50

60

70

80

90

100

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Defense Aerospace Government Technology Solutions

2014298 deals announced






(1) Company filings and Wall Street Research 4


Summer 2016

Defense Update

Potential U.S. Rocket Replacements

Senators John McCain (R-AZ) and Bill Nelson (D-FL) have reached an agreement over the heavily disputed Russian RD-180 rocket engine. The two parties compromised both in limiting the number of engines the military can use to 18 and in setting December 31, 2022 as the cutoff date for further use. McCain’s initial call for a total ban on the military’s use of Russian engines was a reflection of a broader effort to end dependence on these engines and spur competition for a home-grown solution. Earlier this year, the U.S. Air Force awarded an $804 million contract to Aerojet Rocketdyne and United Launch Alliance in order to develop domestic-made rocket-booster engines. Orbital ATK and SpaceX were also awarded contracts to develop rocket engine prototypes. Critics in the Senate were pleased with the agreement, as it assures the U.S. will still be able to launch satellites into space, and also provides time for defense contractors to develop a capable replacement.

The Satellite Revolution

Behind the leadership of American entrepreneur Greg Wyler and Airbus Group SE, the satellite industry could be on the brink of revolution. While satellite manufacturing has long been costly and bogged down due to its dependence on highly customized, by-hand production, Wyler and Airbus hope to reverse this trend through their joint venture, OneWeb. The joint venture plans to open an automated microsatellite manufacturing facility next to Florida’s Kennedy Space Center launch facility in order to construct hundreds of 300 pound satellites per year. OneWeb’s satellites will utilize far fewer electrical connections between subsystems than typical contemporary satellites, which will allow significantly reduced production costs. The initial production of 648 satellites, with the potential to grow to 900, is planned to be completed and launched into low-earth orbit by 2018. In partnership with Airbus, OneWeb aims to provide affordable, global internet coverage.

Boeing Defense – Revenue by Segment(1)

($ in billions)

As orders for its F-15 and F/A-18 fighter jets have dwindled, some are beginning to question Boeing’s ability to remain a leading military jet fighter manufacturer. In a recent report, Leanne Caret, head of Boeing Defense, noted the company’s production of fighter aircraft is unlikely to last beyond the early 2020s. However, while Boeing has begun exploring other business opportunities, such as unmanned systems, satellites, and space travel, company leadership remains optimistic about its long term position in the combat aircraft industry. CEO Dennis Muilenburg has reasserted Boeing’s intention to remain a key market player for years to come, as the company will look towards more maintenance and upgrade work in order to support F-15s and F/A-18s.

$15.4 $15.3 $13.5 $13.5 $12.5 $13.1 $13.2 $13.5

$7.9 $8.5$8.0 $7.8

$7.3 $7.8 $8.5 $8.1

$9.3 $9.4$9.4 $9.2

$9.5 $9.0 $8.7 $8.6

$0

$5

$10

$15

$20

$25

$30

$35

2012 2013 2014 2015 2016E 2017P 2018P 2019P

Military Aircraft Network and Space Global Services and Support

COMPROMISE ON RUSSIAN ROCKETS

CHANGING THE PARADIGM OF THE SATELLITE

INDUSTRY

BOEING’S FUTURE FOR FIGHTER JETS

Global low earth

orbit constellation

Low-cost, high

volume, automated

manufacturing

Internet coverage

for the entire world

Modular satellite design can be

configured to support a variety of

configurations

Smaller models feature many of

the same navigation features as

traditional satellites

Aims to reshape

production for

military and

scientific programs

Offers reliability of

large traditional

satellites

AWARDED ~$47 MILLION CONTRACT TO DEVELOP

ITS VULCAN BE-4, BOOSTER STAGE ENGINE,

AND ITS ADVANCED CRYOGENIC EVOLVED

STAGE (“ACES”) UPPER ENGINE


THE RAPTOR ROCKET ENGINE PROTOTYPE FOR

THE COMPANY’S FALCON 9 AND FALCON HEAVY

LAUNCH VEHICLES

AWARDED ~$115 MILLION CONTRACT TO

DEVELOP A PROTOTYPE OF ITS LIQUID OXYGEN /

KEROSENE-FUELED AR-1 BOOSTER ENGINE


THREE ROCKET PROPULSION SYSTEM

PROTOTYPES FOR USE ON THE COMPANY’S

NEXT-GENERATION LAUNCH VEHICLE


(1) Boeing Current Aircraft Finance Market Outlook 2016 (2) Deloitte 2016 Global Aerospace and Defense Sector Outlook

5


Summer 2016

Aerospace Update

C Series Timeline of Events

Canada-based Bombardier’s C Series aircraft has been through many highs and lows since the program was announced in 2004. Before receiving a $1 billion commitment from the Quebec Government in October 2015, the program had difficulty receiving orders, struggled with delays, and had substantial write-downs. Since then, the program has built momentum, receiving major orders from Delta Airlines and Air Canada this year for up to 125 and 75 aircraft, respectively. Although the program has had positive traction recently, the Premier of Quebec, Philippe Couillard, believes it still needs additional financial support to reach full potential. As a result, he is urging Canada’s Federal Government, which is in negotiations with Bombardier, to provide its own $1 billion investment. Couillard believes the program is currently the country’s largest and most important innovation project.

Commercial Aviation Funding Growth(1)

Due to strong industry performance and robust demand for new, fuel efficient aircraft, commercial aviation financing is expected to grow significantly from $127 billion this year to $172 billion by 2020(1). This growth is also underpinned by the access to cheap credit for lessors and airlines. From a lessor perspective, low interest rates and a narrow risk spreads, coupled with an inflow of new lenders, has increased competition and reduced financing costs. As a result, much of the funding from the historically-cheap credit markets is expected to flow to lessors, as they are estimated to support roughly 40% of new aircraft deliveries this year(1). From the airlines’ perspectives, access to cheap credit coupled with low oil prices has improved profitability and driven aging fleet replacements. Overall, strength in funding is expected to continue in the near term, with both lessors and airlines benefiting from advantageous market conditions.

OEMs Ramping up Production Rates

By 2025, commercial aircraft annual production levels are expected to increase an estimated 30%(2). A large driving force of this growth is the ramp up in production from large OEMs such as Boeing and Airbus, which have maintained fairly consistent production rates over the past three years. For example, Boeing’s 737 and Airbus’ A320 are expected to increase monthly production rates from the current 42 and 46 aircraft, to 57 and 60 aircraft, respectively, by 2019. This rapid growth is creating strains on the supply chain as suppliers are required to drastically increase the production of systems, components, and services to meet the increased demand. As a result, further consolidation of the aerospace supply chain is expected to occur, as smaller companies find it more difficult to compete and larger companies look to gain greater economies of scale.

2004

Announced

the C Series

program will

replace the

cancelled

BRJX

program

2015

C Series Gaining Momentum

2006

Canceled the

C Series

program due

to lack of

orders

2016

2015

C Series Experiencing Setbacks

2007

Announced

the C Series

program will

continue to

run

Completed its

first flight test

2013

2012

C Series

program

delayed

Bombardier

experiences a

$4 billion write

down largely

attributed to

the C Series

program

Quebec

government

announced a

$1 billion

investment

Received large

orders from Delta

Air Lines and Air

Canada; In

negotiations with

Canada’s federal

government for

additional

investment

Air Canada

threatening to walk

away from C Series

deal if not given

more flexibility for

maintenance work

2016

$122 $127 $130 $142

$161 $172

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2015 2016E 2017P 2018P 2019P 2020P

Commercial Aviation Total Funding ($ in billions)

CANADA’S SUPPORT FOR BOMBARDIER’S C SERIES

AIRCRAFT PROGRAM

STRONG FINANCING MARKETS FOR COMMERCIAL

AVIATION

AIRCRAFT PRODUCTION RAMP UP CREATING

STRAINS ON THE INDUSTRY’S SUPPLY CHAIN

Boeing 737 Growth Over Period: 36% Airbus A320 Growth Over Period: 43%

42 42

47

52

57

42

46

50 50

60

0

10

20

30

40

50

60

70

2015 2016E 2017P 2018P 2019P

Boeing 737 Airbus A320


(1) S&P Capital IQ, and company filings

6


Summer 2016

Government Technology Solutions Update

Government Technology Solutions Earnings(1)

Despite mixed stock performance in 2Q16, government technology solutions companies reported generally positive earnings, marked by strong organic growth and ongoing portfolio shaping, to include high-profile divestitures. On average, companies beat estimates by 7.5% and improved quarterly Earnings-per-Share (“EPS”) by 22.8%. Of note, CACI and SAIC beat EPS projections by 7.4% and 7.5%, respectively, after posting strong year-over-year growth. SAIC’s growth was organic, driven by awards at GSA and the U.S. Navy worth over $1.2 billion combined. Additionally, CACI’s capability expansion through its February acquisition of L-3’s services business has led to key contract wins, including a $445 million satellite control network operations contract with the U.S. Air Force.

SPARC vs. ESD Comparison

CMS recently announced the list of 81 awardees to its 10-year, $25 billion IT services contract. The large number of awardees is much expanded from CMS’s predecessor $4 billion Enterprise Systems Development (“ESD”) contract, which was awarded to 16 companies in September of 2007, with eight classified as large business and eight classified as set-aside. Both contracts were created to help modernize CMS’ services through strategic technical and program management support; however, SPARC marks a meaningful shift in the competitive contracting landscape at CMS. While SPARC boasts a $25 billion value, the broader contractor pool may likely increase the overall competitiveness for task orders amongst awardees. Despite the uncertainty in SPARC’s value as an M&A catalyst compared to ESD, HIT capabilities and customer access remain priority focus areas for acquirers in the marketplace.

18F Timeline

GSA Agile 18F has seen significant growth since its launch in January 2015. The program has grown to over 180 government personnel, and has initiated 115 projects with 25 different agencies over the past 12 months. 18F recently awarded True Tandem the first agile task order under the BPA, a $150,000 award to build a dashboard for FedRAMP. However, this rapid growth has not occurred without road blocks. The Government Accountability Administration (“GAO”) found that despite rapid revenue growth, 18F’s expenses are heavily outpacing income, leading to a $15 million shortfall. Further, recent Federal reports cited security concerns involving 18F projects within their systems. While resolving these issues is essential to maintain 18F’s long-term viability, government officials remain optimistic, as GAO surveys reveal satisfaction with 18F project performance.

EPS (Latest Quarter Releases) EPS Growth Government Est. Actual Beat / (Miss) Y/Y

4Q16: 05/18/16$0.41 $0.41 (0.0%) 36.7%

3Q16: 04/28/161.28 1.38 7.4% 16.9%

1Q16: 05/05/160.20 0.24 20.0% (40.0%)

1Q16: 05/05/160.60 0.60 0.7% 46.3%

1Q16: 05/10/16(0.02) 0.03 (14.3%) NM

1Q17: 04/27/160.69 0.66 (4.8%) (8.3%)

1Q16: 04/27/160.31 0.35 13.1% 12.9%

1Q16: 04/27/160.22 0.24 11.1% 28.6%

1Q17: 06/13/150.74 0.80 7.5% 21.2%

1Q16: 05/11/160.55 0.61 10.4% 29.8%

COMPANIES CONTINUE TO ADAPT TO AN EVOLVING

FEDERAL MARKETPLACE

LARGE NUMBER OF COMPANIES AWARDED

SPARC POSITIONS

GSA 18F SEES RAPID GROWTH WHILE HITTING

OBSTACLES

SPARC

$25 Billion ceiling value

Period of Performance: 10 Years

81Awardees

27

54

Large Business

Small Business

ESD

$4 Billion ceiling value

Period of Performance: September 2007 – September 2016

16Awardees

8

8



7


Summer 2016

Public Company Trading Analysis (1)

($ in millions, except per share amounts)

Stock Price % of 52 Market Enterprise CY2016E CY2017P EV / CY2016E EV / CY2017P

Defense Primes 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Boeing $129.87 86.2% $82,729 $84,442 $93,830 $10,359 11.0% $96,023 $10,749 11.2% 0.90x 8.2x 0.88x 7.9x

Lockheed Martin 248.17 99.8% 75,555 89,379 50,537 7,032 13.9% 50,545 7,516 14.9% 1.77x 12.7x 1.77x 11.9x

General Dynamics 139.24 90.6% 42,558 44,051 31,686 4,739 15.0% 32,270 4,816 14.9% 1.39x 9.3x 1.37x 9.1x

Raytheon 135.95 99.0% 40,374 43,577 24,449 3,661 15.0% 25,325 3,993 15.8% 1.78x 11.9x 1.72x 10.9x

Northrop Grumman 222.28 99.6% 40,111 45,221 23,791 3,417 14.4% 24,753 3,722 15.0% 1.90x 13.2x 1.83x 12.1x

BAE Systems 6.97 97.8% 22,101 24,220 24,172 2,836 11.7% 25,121 2,982 11.9% 1.00x 8.5x 0.96x 8.1x

Median 98.4% $41,466 $44,636 $28,068 $4,200 14.1% $28,797 $4,404 14.9% 1.58x 10.6x 1.54x 10.0x


Defense Systems 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Safran $67.66 84.1% $28,167 $29,807 $20,068 $3,612 18.0% $20,796 $3,704 17.8% 1.49x 8.3x 1.43x 8.0x

L-3 Communications 146.69 99.1% 11,288 14,463 10,115 1,215 12.0% 10,313 1,287 12.5% 1.43x 11.9x 1.40x 11.2x

Rockwell Collins 85.14 89.5% 11,085 13,294 5,418 1,289 23.8% 5,640 1,379 24.5% 2.45x 10.3x 2.36x 9.6x

Huntington Ingalls Industries 168.03 100.0% 7,901 8,383 7,096 945 13.3% 7,079 962 13.6% 1.18x 8.9x 1.18x 8.7x

Orbital ATK, Inc. 85.14 89.7% 4,986 6,519 4,592 694 15.1% 4,823 749 15.5% 1.42x 9.4x 1.35x 8.7x

FLIR 30.95 90.8% 4,260 4,105 1,645 376 22.9% 1,718 407 23.7% 2.50x 10.9x 2.39x 10.1x

Cobham 2.09 50.9% 3,543 5,327 2,635 532 20.2% 2,714 564 20.8% 2.02x 10.0x 1.96x 9.4x

Kongsberg Gruppen 14.63 83.9% 1,738 1,682 2,017 194 9.6% 2,027 227 11.2% 0.83x 8.6x 0.83x 7.4x

Cubic 40.16 80.7% 1,083 1,352 1,547 144 9.3% 1,577 169 10.7% 0.87x 9.4x 0.86x 8.0x

AeroVironment 27.80 85.7% 638 411 255 13 5.1% 305 19 6.4% 1.61x NM 1.35x NM

Median 87.6% $4,623 $5,923 $3,614 $613 14.2% $3,769 $657 14.6% 1.46x 9.4x 1.38x 8.7x


Defense Electronics / Comm. 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Harris $83.44 92.9% $10,407 $14,880 $7,473 $1,440 19.3% $7,618 $1,684 22.1% 1.99x 10.3x 1.95x 8.8x

ViaSat 71.40 90.2% 3,494 4,412 1,505 343 22.8% 1,594 373 23.4% 2.93x 12.9x 2.77x 11.8x

Teledyne 99.05 88.6% 3,417 4,053 2,237 351 15.7% 2,332 402 17.2% 1.81x 11.6x 1.74x 10.1x

Ultra Electronics 23.13 85.1% 1,621 2,057 1,050 196 18.7% 1,083 205 18.9% 1.96x 10.5x 1.90x 10.0x

Mercury Systems 24.86 100.0% 995 911 307 66 21.6% 380 89 23.5% 2.96x 13.7x 2.40x 10.2x

Comtech Telecommunications 12.84 41.5% 299 581 614 61 10.0% NA NA NA 0.95x 9.5x NA NA

Kratos Defense & Security Solutions 4.10 64.0% 245 669 649 40 6.2% 672 60 8.9% 1.03x 16.6x 1.00x 11.2x

Median 88.6% $1,621 $2,057 $1,050 $196 18.7% $1,339 $289 20.5% 1.96x 11.6x 1.93x 10.1x


Homeland Security 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Smiths Group $15.33 92.8% $6,057 $7,468 $3,851 $714 18.6% $4,000 $749 18.7% 1.94x 10.5x 1.87x 10.0x

MSA Safety Incorporated 52.53 96.0% 1,967 2,338 1,189 206 17.4% 1,239 220 17.8% 1.97x 11.3x 1.89x 10.6x

Smith & Wesson 27.18 89.3% 1,522 1,505 764 215 28.1% 773 208 26.9% 1.97x 7.0x 1.95x 7.2x

OSI Systems, Inc. 58.13 60.1% 1,098 1,135 846 131 15.5% 920 158 17.2% 1.34x 8.7x 1.23x 7.2x

Analogic 79.44 87.6% 983 855 529 88 16.6% 565 103 18.1% 1.62x 9.7x 1.51x 8.3x

Median 89.3% $1,522 $1,505 $846 $206 17.4% $920 $208 18.1% 1.94x 9.7x 1.87x 8.3x



8


Summer 2016

Public Company Trading Analysis, cont. (1)

($ in millions, except per share amounts)


Aerospace Systems 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

TransDigm $263.69 98.4% $13,970 $21,778 $3,318 $1,513 45.6% $3,619 $1,652 45.7% 6.56x 14.4x 6.02x 13.2x

Zodiac Aerospace 23.44 72.3% 6,494 8,257 5,610 521 9.3% 5,932 688 11.6% 1.47x 15.8x 1.39x 12.0x

B/E Aerospace 46.18 82.7% 4,719 6,674 2,832 607 21.4% 3,025 649 21.5% 2.36x 11.0x 2.21x 10.3x

Meggitt 5.40 79.0% 4,173 5,726 2,458 599 24.4% 2,577 630 24.4% 2.33x 9.6x 2.22x 9.1x

HEICO 66.81 98.3% 3,953 4,654 1,401 331 23.6% 1,501 354 23.6% 3.32x 14.1x 3.10x 13.2x

Esterline 62.04 64.3% 1,821 2,493 1,964 288 14.7% 2,016 329 16.3% 1.27x 8.7x 1.24x 7.6x

Triumph Group 35.50 53.0% 1,758 3,154 3,771 525 13.9% 3,682 594 16.1% 0.84x 6.0x 0.86x 5.3x

Astronics 33.26 45.4% 848 1,005 679 114 16.8% 724 127 17.6% 1.48x 8.8x 1.39x 7.9x

AAR 23.34 71.2% 811 921 1,736 150 8.6% 1,898 203 10.7% 0.53x 6.2x 0.49x 4.5x

Median 72.3% $3,953 $4,654 $2,458 $521 16.8% $2,577 $594 17.6% 1.48x 9.6x 1.39x 9.1x


Aerospace Structures 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Spirit AeroSystems $43.00 74.2% $5,122 $5,426 $6,678 $1,114 16.7% $6,932 $1,131 16.3% 0.81x 4.9x 0.78x 4.8x

Hexcel 41.64 76.1% 3,869 4,533 2,004 454 22.6% 2,196 514 23.4% 2.26x 10.0x 2.06x 8.8x

Senior 2.73 67.9% 1,146 1,433 1,155 174 15.1% 1,212 180 14.8% 1.24x 8.2x 1.18x 8.0x

LMI Aerospace 8.04 65.6% 106 355 370 46 12.5% 396 53 13.4% 0.96x 7.7x 0.90x 6.7x

Median 71.0% $2,507 $2,983 $1,580 $314 15.9% $1,704 $347 15.6% 1.10x 7.9x 1.04x 7.3x


Government Technology Solutions 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Booz Allen Hamilton $29.64 94.6% $4,392 $5,801 $5,568 $527 9.5% $5,790 $572 9.9% 1.04x 11.0x 1.00x 10.1x

CSRA Inc. 23.43 70.1% 3,829 6,660 5,089 871 17.1% 5,194 902 17.4% 1.31x 7.7x 1.28x 7.4x

Leidos Holdings 47.87 80.4% 3,479 3,961 5,179 441 8.5% 5,977 449 7.5% 0.76x 9.0x 0.66x 8.8x

Science Applications International Corp. 58.35 94.2% 2,616 3,534 4,567 342 7.5% 4,632 351 7.6% 0.77x 10.3x 0.76x 10.1x

CACI International 90.41 81.4% 2,199 3,666 4,124 350 8.5% 4,240 382 9.0% 0.89x 10.5x 0.86x 9.6x

ManTech International 37.82 96.6% 1,426 1,366 1,624 123 7.6% 1,679 129 7.7% 0.84x 11.1x 0.81x 10.6x

ICF International 40.90 95.6% 778 1,106 1,171 117 10.0% 1,221 128 10.4% 0.94x 9.4x 0.91x 8.7x

Engility Holdings 21.12 58.8% 776 1,845 2,097 183 8.7% 2,143 193 9.0% 0.88x 10.1x 0.86x 9.5x

KEYW 9.94 96.6% 387 483 299 35 11.7% 320 39 12.4% 1.61x NM 1.51x 12.2x

VSE Corp. 66.80 92.8% 361 604 NA NA NA NA NA NA NA NA NA NA

Vectrus, Inc. 28.49 98.3% 304 374 1,187 47 4.0% 1,134 47 4.1% 0.32x 7.9x 0.33x 8.0x

NCI 14.05 81.8% 190 210 343 30 8.9% 355 31 8.8% 0.61x 6.9x 0.59x 6.7x

Median 93.5% $1,102 $1,605 $2,097 $183 8.7% $2,143 $193 9.0% 0.88x 9.8x 0.86x 9.5x


Engineering & Construction 06/30/16 Week High Cap Value Rev. EBITDA Margin Rev. EBITDA Margin Rev. EBITDA Rev. EBITDA

Babcock International $12.02 81.1% $6,076 $8,046 $6,602 $859 13.0% $7,165 $928 12.9% 1.22x 9.4x 1.12x 8.7x

Jacobs Engineering 49.81 93.4% 6,073 6,109 11,310 661 5.8% 11,497 699 6.1% 0.54x 9.2x 0.53x 8.7x

AECOM 31.77 93.3% 4,872 8,881 18,112 1,068 5.9% 18,934 1,167 6.2% 0.49x 8.3x 0.47x 7.6x

Tetra Tech 30.75 96.9% 1,781 2,030 1,967 220 11.2% 2,059 240 11.6% 1.03x 9.2x 0.99x 8.5x

Median 93.4% $5,473 $7,078 $8,956 $760 8.5% $9,331 $813 8.9% 0.79x 9.2x 0.76x 8.6x


(1) S&P Capital IQ, company filings, and KippsDeSanto research (2) Based on 2016E Revenue

9


Summer 2016

Select Recent Aerospace / Defense M&A(1)

($ in millions)

Announce EBITDA EV / LTM

Date Buyer / Investor Target Target Description EV Revenue EBITDA Margin Rev. EBITDA

06/28/16 FLIR Systems, Inc. Armasight, Inc. Provides thermal imaging, visible-light imaging systems, locater

systems, measurement and diagnostic systems, and threat-detection

solutions

$41.0 NA NA NA NA NA

06/23/16 Survitec Group Ltd. Wilhelmsen Maritime

Services AS, Marine Safety

Business

Provides safety products and services to the marine industry NA NA NA NA NA NA

06/21/16 Spaceflight Industries, Inc. OpenWhere, Inc. Provides design, deployment, operations, and maintenance of cloud

based machine to machine systems

NA NA NA NA NA NA

06/21/16 Accurus Aerospace

Corporation

J&M Machine, LLC Provides precision machined metallic parts and assemblies for the

global aerospace industry

NA NA NA NA NA NA

06/21/16 OSI Systems, Inc. American Science and

Engineering, Inc.

Provides, manufactures, markets, and sells X-ray inspection and other

detection products for homeland security, force protection, public safety,

and other critical defense and security applications

187.0 $103.0 $4.1 4.0% 1.82x NM

06/17/16 Centum Electronics Ltd. Adetel Group [51% stake] Designs, develops, and industrializes embedded electronic systems for

aerospace, defense, and other sectors

NA NA NA NA NA NA

06/17/16 HGH Infrared Systems, Inc. Electro Optical Industries,

LLC

Provides optronic and infrared systems for security, industrial, and civil

applications

NA NA NA NA NA NA

06/16/16 Alpha Sintered Metals Precision Made Products,

LLC

Provides metal injection moldings, serving the medical, aerospace, and

firearms markets

NA NA NA NA NA NA

06/10/16 Carlisle Interconnect

Technologies, Inc.

Micro-Coax, Inc. Provides Radio Frequency ("RF") and microwave solutions for defense,

satellite, test and measurement, and other industrial customers

NA NA NA NA NA NA

06/09/16 Astro Park Corporation Chemko Technical Services Provides precision cleaning, testing, and fabrication services to both

NASA and the private sector in all applications of the aerospace

industry

NA NA NA NA NA NA

06/08/16 Heptagon Micro Optics Pte

Ltd

RF Digital Corporation Provides RF modules such as wireless RF transmitter, receiver, and

transceiver modules

NA NA NA NA NA NA

06/01/16 Aerostar Aerospace

Manufacturing, LLC

Warmelin Precision Products Provides highly complex precision components for the global aerospace

industry

NA NA NA NA NA NA

05/31/16 United Flexible, Inc. Kreisler Manufacturing

Corporation

Provides precision metal components and assemblies primarily for use

in military and commercial aircraft engines and industrial gas turbines in

the U.S.

34.6 32.3 3.4 10.6% 1.07x 10.1x

05/31/16 Genstar Capital, LLC Infinite RF Holdings, Inc. Provides engineering grade RF technology components to the

aerospace, defense, industrial, government, consumer electronics,

instrumentation, and telecommunications markets

NA NA NA NA NA NA

05/30/16 Saint Gobain Performance

Plastics Corporation

MIPNET Industries Provides composite parts designed with the RT2iTM weaving

technology to the aerospace industry

NA NA NA NA NA NA

05/24/16 TransDigm Group, Inc. ILC Holdings, Inc. (Data

Device Corporation)

Provides power control and databus products to the global military and

commercial aerospace markets

1,000.0 200.0(2) NA NA 5.00x NA

05/23/16 D.C. Capital Partners QRC Technologies Provides RF Test and Measurement products, especially for cellular

communications

NA NA NA NA NA NA

05/19/16 AE Industrial Partners, LLC AC&A, LLC Provides composites, metallic parts, and tooling for aerospace, defense,

space, and other markets

NA NA NA NA NA NA

05/19/16 Advanced Logistics for

Aerospace (ALA) SpA

STAG Group Provides distribution and supply chain services for the aerospace

industry

NA NA NA NA NA NA

05/17/16 KLX, Inc. Herndon Aerospace &

Defense Company

Provides commercial and defense supply chain management solutions

to the U.S. Government and domestic and international companies

210.0 132.5 20.3 15.3% 1.58x 10.3x

05/16/16 National Technical Systems,

Inc.

Chesapeake Testing

Services, Inc.

Provides ballistic experimentation, non-destructive, sports,

environmental simulation, ammunition / firearm, and X-ray computed

tomography scanning testing services

NA NA NA NA NA NA

05/11/16 SolAero Technologies

Corporation

Vanguard Space

Technologies, Inc.

Provides, engineers, manufactures, assembles, and tests aerospace

structures including antenna reflectors, spacecraft structures, and

instrument structures

NA NA NA NA NA NA

05/05/16 FTG Circuits, Inc. Printed Circuit Technology

Business of Teledyne

Technologies

Provides rigid-flex printed circuit boards and assemblies 9.3 NA NA NA NA NA

05/05/16 UES International Pty Ltd Panther Engineering, Inc. Provides design, engineering, and production of high precision

Computer Numeric Control ("CNC") parts, tooling, dyes, and molds

NA NA NA NA NA NA



10


Summer 2016

Select Recent Aerospace / Defense M&A, cont.(1) ($ in millions)



05/04/16 Silverfleet Capital Sigma Precision

Components Ltd

Provides precision components for aerospace and high technology

markets

$91.2 $51.1 $4.8 9.4% 1.78x 19.1x

05/03/16 PEI-Genesis, Inc. Filconn, Inc. Provides precision filtered, Electro Magnetic Pulse ("EMP")

suppression, and custom configuration connectors

NA NA NA NA NA NA

05/02/16 Fortem Technologies Detect and Avoid Radar

Technology Line of IMSAR

Provides collision avoidance radar for Unmanned Aircraft Systems

("UAS")

NA NA NA NA NA NA

05/02/16 Convergint Technologies Total Recall Corporation Provides sophisticated citywide surveillance networks NA NA NA NA NA NA

04/21/16 Smiths Group plc Morpho Detection, Inc. Provides detection systems for explosives, narcotics, and chemical,

biological, and nuclear material for governments, militaries, airports, first

responders, and others

710.0 320.0 70.0 21.9% 2.22x 10.1x

04/20/16 Reiser Simulation and

Training GmbH (RST)

Innovative Control Systems,

Inc. (ICS)

Provides a wide range of production-proven avionics, test systems, and

custom engineering services for the aerospace industry

NA NA NA NA NA NA

04/14/16 EnerSys Enser Corporation Provides thermal batteries used in powering a multitude of electronics,

guidance, and other electrical loads on many advance weapon systems

NA NA NA NA NA NA

04/13/16 Teledyne LeCroy, Inc. Quantum Data, Inc. Provides video test generators for video display testing applications NA NA NA NA NA NA

04/12/16 Data Device Corporation Microelectronics Business of

Maxwell Technologies, Inc.

Provides radiation-hardened single board computers and components 21.0 NA NA NA NA NA

04/08/16 Hanwha Techwin Co., Ltd. Doosan DST Co., Ltd. Provides armored vehicles, air defense systems, land-based launcher

systems, and naval launchers

608.7 700.0 NA NA 0.87x NA

04/07/16 Teledyne LeCroy, Inc. Frontline Test Equipment,

Inc.

Provides electronic test and measurement instrumentation and wireless

protocol analysis test tools

NA NA NA NA NA NA

04/07/16 Molex, Inc. Interconnect Systems, Inc. Provides high density silicon packaging with advanced interconnect

technologies for OEMs

NA NA NA NA NA NA

04/05/16 Aero Precision, Inc. Fall Machining Company,

Inc.

Provides precision machined products for the aerospace,

telecommunications, automotive and medical markets

NA NA NA NA NA NA

04/05/16 Hartzell Engine

Technologies, LLC

Sky-Tec Partners, Aircraft

Starters and Solenoids

Product Line

Provides a complete line of starters for Lycoming and Continental

engines

NA NA NA NA NA NA

04/05/16 Novaria Holdings, LLC Elastic Stop Nut Corporation

of America

Provides nylon inserts and metal fasteners to the commercial

aerospace, military ground, and navy nuclear markets

NA NA NA NA NA NA

04/04/16 MB Aerospace Holdings Ltd. Centrax Turbine Components

Ltd.

Provides compressor and turbine aerofoil, discs, shafts, and casings NA NA NA NA NA NA

04/01/16 Transcat, Inc. Excalibur Engineering, Inc. Provider of calibration and compliance services and value-added

distributer of testing equipment

7.4 8.0 NA NA 0.92x NA

03/31/16 Textron, Inc. Airborne Tactical Advantage

Co., LLC

Trains military pilots, ship crews, and ground support forces in fighter

tactics, carrier strike group defense and air-to-ground strike control

NA NA NA NA NA NA

03/31/16 J.F. Lehman & Company American Scaffold, Inc. Provides scaffolding systems for the MRO of U.S. government vessels NA NA NA NA NA NA

03/31/16 Vishay Precision Group, Inc. Pacific Instruments Provides high-performance data acquisition systems for the aerospace,

commercial aviation, and defense markets

11.0 9.0 2.8 31.1% 1.22x 3.9x

03/29/16 Argosy Capital Ranger AirShop Holdings,

Inc.

Provides unit load devices and other cargo control products NA NA NA NA NA NA

03/23/16 Mercury Systems Microsemi Corp. - RF

Integrated Solutions

Provides high-frequency components and subsystem solutions for

defense electronics, homeland security, and other government end-use

applications

300.0 100.0 28.0 28.0% 3.00x 10.7x

03/23/16 Novaria Group, Inc. Ferco Aerospace Provides engine manufacturers with high-strength and temperature

resistant brackets, tube assemblies, and other exotic metal fabrications

NA NA NA NA NA NA

03/21/16 FTG Aerospace Airco Industries, Inc. Provides displays and control panels for military and commercial

airborne and ground communications and navigation systems

NA NA NA NA NA NA


(1) S&P Capital IQ, company filings, and KippsDeSanto research (2) Adjusted based on 338(h)10 election or other equivalent tax benefits (3) Excludes additional contingent earn-out payments (4) KippsDeSanto & Co. served as financial advisor

11


Summer 2016

Select Recent Government Technology Solutions M&A(1) ($ in millions)



06/24/16 Arlington Capital Partners EOIR Technologies, Inc. Provides big data, visualization, capabilities, command, control,

communications, computers, intelligence, surveillance, and

reconnaissance, ("C4ISR") solutions, and training and simulation

NA NA NA NA NA NA

06/14/16 ManTech International

Corporation

Oceans Edge Inc., Cyber

Business

Provides cybersecurity solutions, including internal R&D, protocol

analysis, penetration testing, and vulnerability analysis

NA NA NA NA NA NA

06/13/16 Xator Corporation TSM Corporation Provides training, engineering, and logistics to special operations,

defense, and law enforcement

NA NA NA NA NA NA

05/24/16 Federal Data Systems Intelligent Decisions'

Intelligence and

Counterintelligence Units

Provides Federal IT solutions in the areas of cybersecurity, cloud, and

simulation and training for the civilian, defense, and IC markets

NA NA NA NA NA NA

05/23/16 KBR, Inc. Wyle, Inc. Provides specialized engineering, as well as professional, scientific, and

technical services primarily to the U.S. Federal Government$600.0

(2) $836.0 NA NA 0.72x NA

05/16/16 Magellan Health, Inc.(4) Armed Forces Services

Corporation (AFSC)

Provides behavioral health and specialty services, such as business

strategy, management consulting, and HR solutions, to various

agencies of the Federal Government

127.5(3) NA NA NA NA NA

05/10/16 ALATEC, Inc. USi Provides IT solutions, systems and software engineering, and business

solutions for educational and government clients

NA NA NA NA NA NA

05/06/16 Altamira Technologies

Corporation

Prime Solutions, LLC Provides engineering and IT services, including software engineering,

embedded development, database design and management, system

integration, and enterprise solutions

NA NA NA NA NA NA

05/03/16 DLH Holdings Corp. Danya International, Inc.(4) Provides evidence-based health, education, and food security

technology-enabled solutions in U.S. and international markets

38.8 NA NA NA NA NA

04/13/16 OpenGov, Inc. Ontodia Provides solutions for unlocking the potential of open data for

governments of various sizes and sectors that utilize open data

NA NA NA NA NA NA

04/12/16 Jacobs Engineering The Van Dyke Technology

Group, Inc.

Provides information-sharing solutions for the Federal Government,

focusing on cybersecurity

NA NA NA NA NA NA

03/30/16 Century Link, Inc. netAura, LLC Provides IT engineering and data analytics solutions focused on

cybersecurity, as well as event and vulnerability management

NA NA NA NA NA NA

03/28/16 NTT Data, Inc. Dell, Inc.'s Services business Provides IT products and services including systems and information

management, security software, infrastructure, cloud, application, and

business process services

3,055.0 2,826.0 NA NA 1.08x NA

03/24/16 Sirius Computer Solutions,

Inc.

Force 3, Inc. Provides infrastructure services to design, deploy, support, and maintain

technology needs through security, next generation networking, and IT

support solutions for federal agencies

NA 260.0 NA NA NA NA

03/18/16 IBM Corporation Optevia Provides SaaS CRM solutions within the public sector, primarily to local

and Federal government, health, and social housing customers

NA NA NA NA NA NA

03/14/16 Tetra Tech, Inc. INDUS Corporation Provides IT solutions focused on data analytics, geospatial analysis,

secure infrastructure, and software applications for U.S. Federal

customers

NA NA NA NA NA NA

03/09/16 Lake Family Trust Information Management

Services (IMS)

Provides clinical data management and analysis, application

development, and cloud computing and hosting support to organizations

engaged in biomedical research

NA NA NA NA NA NA

03/01/16 Maximus Health Services,

Inc.

Ascend Management

Innovations LLC

Provides independent, specialized health assessments and data

management tools to government agencies in the U.S.

NA 13.0 NA NA NA NA

02/29/16 CACI International, Inc. Purple Secure Systems Ltd. Provides high quality and agile systems and software for national

security, defense, and government organizations

NA NA NA NA NA NA

02/25/16 General Atomics Miltec Corporation(4) Provides design, development, integration, and testing services of

missile and aerospace systems

14.6 NA NA NA NA NA

02/24/16 Rhone Capital Garda World Security

Corporation (45% Minority

Stake)

Provides business solutions and security services worldwide through

two operating segments, Cash Services and Protective Services

NA 1,989.9 NA NA NA NA

02/24/16 Quantech Services, Inc. KeyW Systems Engineering

and Technical Assistance

Business

Provides systems engineering and technical assistance services for

defense agencies

12.0 12.0 2.0 16.7% 1.00x 6.0x

02/18/16 IBM Watson Health Truven Holding Corporation Provides analytic solutions and services for the healthcare industry 2,600.0 NA NA NA NA NA

02/09/16 Assured Enterprises, Inc. Nova Defense & Aerospace

International

Provides IT solutions and business strategy consulting services for

aerospace, security, and acquisition

NA NA NA NA NA NA


`

About KippsDeSanto & Co.

KippsDeSanto is an investment banking firm focused on delivering M&A and financing expertise. Our solutions are focused on the sectors we know – aerospace / defense and government technology solutions. We are recognized for our depth of industry experience, knowledge of sector-specific transaction drivers, and long-standing relationships with industry participants.

We welcome the opportunity to have a more detailed discussion of developments in our focus industries. For more information, please contact us:

Robert D. Kipps Managing Director [email protected]

Michael J. Misantone Managing Director [email protected]

Marc B. Marlin Managing Director [email protected]

G. Toby [email protected]

Jamie L. Graham Director [email protected]

Brian T. Tunney Vice President [email protected]

Alex M. Zawatsky Associate [email protected]

Kevin P. DeSanto Managing Director [email protected]

Karl M. Schmidt Managing Director [email protected]

Jon Yim Director [email protected]

Kate Troendle Director [email protected]

Robert G. Dowling Vice President [email protected]

Stephen M. Jonas Associate [email protected]

Alexia N. Marchetta Associate [email protected]

Connect with KippsDeSanto:

The information and opinions in this newsletter were prepared by KippsDeSanto & Co. and the information herein is believed to be reliable and has been obtained from and based upon public sources believed to be reliable. KippsDeSanto & Co. makes no representation as to the accuracy or completeness of such information. Opinions, estimates, and analyses in this newsletter constitute the current judgment of the author as of the date of this newsletter. They do not necessarily reflect the opinions of KippsDeSanto & Co. and are subject to change without notice. This newsletter is meant to impart general knowledge about a sector or industry and is not expected to provide reasonably sufficient information upon which to make any investment decisions.

KippsDeSanto & Co. is not affiliated with any of the companies identified in this newsletter. Unless otherwise described, the companies identified are also not affiliated with one another.

This newsletter may contain information obtained from third parties. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. Third party content providers give no express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use. Third party content providers shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs or losses caused by negligence) in connection with any use of their

content, including ratings.

8000 Towers Crescent Drive Suite 1200

Tysons Corner, Virginia 22182 703.442.1400

www.kippsdesanto.com

mailto:[email protected]




https://twitter.com/kippsdesanto

https://www.facebook.com/KippsDeSantoCo/

https://www.linkedin.com/company/1717017

MarketView Summer 2016

Documents

Transcript of MarketView Summer 2016