2012 is here, and with it comes big changes for the Federal IT industry. WashingtonExec gave local executives the opportunity to share their thoughts on where they see the government contracting industry headed.
Braun Jones, Partner at WWC Capital, told WashingtonExec what areas in government contracting he sees growing in 2012 and also evaluated the M&A market.
Braun Jones: Government contracting M&A volume will be slightly lower in 2012 than 2011 while total M&A dollar value will be about the same or higher. I expect to see lower volume because the active mid-tier contractors, in this uncertain budget and political environment, will proceed with more caution on larger deals but still be hungry for growth niches in Cybersecurity, geospatial, intelligence, and growing civilian areas such as healthcare IT and clean energy. Most desirable pure-play companies with a large focus in these growth areas are typically under $50 million in revenue. However, dollar volume may increase owing to the desire of the large defense-focused primes to add civilian agency bulk as a hedge against their concentration in defense as well as to bolster their trading multiples. The Pentagon does not want the large primes consolidating defense contracting but billion-dollar civilian add-ons should be fair game.
