INDUSTRY UPDATE | Q3 2024
Defense & Government
CCA releases quarterly updates regarding relevant market insights for the Defense and Government Contracting space. Interested in receiving the updates via email? Subscribe here.
Firm Overview
CCA provides customized investment banking and corporate advisory services to lower middle market companies in the Mid-Atlantic region. No matter where you are in your business life cycle, CCA can help you build shareholder value and achieve outcomes that best suit your goals.
$3.4Bn
Aggregate Tx Value
20 years
Average Experience
30
Transactions Closed Since 2020
84
2023 Valuations and Marketability studies
Corporate Advisory Services
- Value Creation
- Succession and Exit Planning
- Growth Plan Evaluation
- Valuations & Appraisal
- Fairness Opinion
- ESOP Feasibility Study
- Stockholder Agreement
Investment Banking Services
- Sell-Side
- Buy-Side
- Merger
- Recapitalization
- Growth Capital
- Management Buyout
Intel and Cyber News
Companies serving the Intelligence and Cyber Markets encompass a wide range of offerings with a diverse set of skills and market segments. From Artificial Intelligence and Machine Learning to Cybersecurity and support for the war fighter, the people that make up these technology companies are actively involved in national security. Along with these “pointy edge of the sword companies” are support industries in staffing, construction, finance, and legal, which serve the various needs of this community.
Warning of Russian Cyber Threats
NSA joined the FBI, CISA, and international allies in publishing the Cybersecurity Advisory (CSA) “Russian Military Cyber Actors Target U.S. and Global Critical Infrastructure” to detail malicious activity used for the purposes of espionage, sabotage, and reputational harm since at least 2020.. According to the CSA, the GRU Component is responsible for deploying the destructive WhisperGate malware against Ukrainian victim organizations.
Institute of National Security
Vanderbilt University announced the launch of its Institute of National Security, led by Paul M. Nakasone, former director of the National Security Agency, former commander of U.S. Cyber Command and retired four-star general. The Institute was created to help the government and military combat evolving threats and develop the next generation of national security leaders.
Pentagon kills Cyber Service Proposal
The Pentagon has formally requested that lawmakers shut down a legislative proposal that would mandate an independent assessment of the establishment of a separate cyber service. The idea of a separate cyber service has long been a controversial topic in the department.
Continuing Resolution Signed
The CR extends fiscal year 2025 funding for all 12 annual spending bills, including the Labor, Health and Human Services, and Education bill, through Dec. 20th. The House has passed five of 12 spending bills on party-line votes, while the Senate has advanced 11 of 12 spending bills out of committee with bipartisan support. The CR will allow the federal government to continue operating while Congress completes its work on the annual spending bills.
Total Compensation Plan
Regional Federal Contractors are scrambling to comply with a Total Compensation Plan required on future bids. This particular FAR clause directs Contractors to submit a “Total Compensation Plan” (TCP) when responding to “solicitations for negotiated contracts when the contract amount is expected to exceed $750,000 and services are to be provided which will require meaningful numbers of professional employees.”
No Such Podcast
No Such Podcast pulls back the curtain on the National Security Agency. NSA’s very existence used to be classified, leading to its nickname, “No Such Agency.” Now, they’ve got stories to tell, and they just might surprise you! Hear from everyone at NSA, from senior leaders down to new hires, talk about what it’s really like to work at one of the most secretive agencies in the government.
CCA Serves as the Exclusive Financial Advisor in Q3
SSATI Acquires DATASYNC
Sensible Solutions and Technologies, Inc. (SSATI), a custom software development and system integration leader in the U.S. national security community, announced the successful acquisition of Data Sync Technologies, Inc. (DataSync), a leader in knowledge management and data analysis. This strategic acquisition expands SSATI’s footprint within the intelligence community to new government agency customers and provides DataSync employees greater opportunity for career advancement.
VETEGRITY Recapitalized by Private Investor Group
Vetegrity, LLC, a Maryland-based provider of professional services to the Department of Defense (DoD) and Intelligence Community (IC), announced a management restructuring and recapitalization of the company. This strategic move marks a new chapter in the company’s growth and innovation. The recapitalization and new management structure underscore Vetegrity’s commitment to innovation and growth, as well as its dedication to providing exceptional value to its government clients, partners and employees.
The Intelligence Community Budget
The United States Intelligence Community is a group of separate United States government intelligence agencies and subordinate organizations that work separately yet together to conduct intelligence activities to support the foreign policy and national security of the United States.
The National Intelligence Program (NIP) includes all programs. IC programs are funded through the: (1) NIP, which covers the programs, projects, and activities of the IC oriented toward the strategic requirements of policymakers, and (2) Military Intelligence Program (MIP), which funds defense intelligence activities intended to support tactical military requirements and operations. A program is primarily NIP if it funds an activity that supports more than one department or agency (such as satellite imagery), or provides a service of common concern for the IC (such as secure communications). The NIP funds the Central Intelligence Agency (CIA) and the Office of the Director of National Intelligence (ODNI) in their entirety, and the strategic intelligence activities associated with departmental IC elements such DOD’s National Security Agency (NSA). A program is primarily MIP if it funds an activity that addresses a unique DOD requirement. Additionally, MIP funds may be used to “sustain, enhance, or increase capacity/capability of NIP systems.” The DNI and USD (I&S) work together in a number of ways to facilitate the integration of NIP and MIP intelligence efforts. Mutually beneficial programs may receive both NIP and MIP resources.
Recent Government Technology Services Transaction Highlights
Target:
Acquiror:
- Announced: October 1, 2024
- Sector: Intel & Cyber
- Description: CACI International Inc (NYSE: CACI) announced that it has acquired Applied Insight, a Northern Virginia-based portfolio company of Acacia Group, in an all-cash transaction. In alignment with CACI’s mission to deliver distinctive expertise and differentiated technology to meet its customers’ greatest national security challenges, Applied Insight delivers proven cloud migration, adoption, and transformation capabilities, coupled with intimate customer relationships across the Department of Defense (DoD) and Intelligence Communities (IC).
Target:
Acquiror:
- Announced: September 27, 2024
- Sector: Intel & Cyber
- Description: Amentum (the “Company”), announced the completion of its merger with Jacobs Solutions Inc.’s (“Jacobs”) Critical Mission Solutions and Cyber and Intelligence businesses. The combination creates a global leader in advanced engineering and innovative technology solutions, well positioned to address its customers’ most significant and complex challenges. Amentum began regular-way trading on the New York Stock Exchange (“NYSE”) on Monday, September 30, under the ticker symbol “AMTM.” The executive team of the Company also rang the Opening Bell at NYSE the following day, Tuesday, October 1.
Target:
Acquiror:
- Announced: September 27, 2024
- Sector: Intel & Cyber
- Description: Private investment firm CM Equity Partners has completed its acquisition of Sabre Systems from its majority owner and founder for an undisclosed sum. Established in 1989, Sabre provides technology platforms in software and systems engineering, digital transformation, cybersecurity, enterprise data management and advanced communications systems to support the national security missions of the Department of Defense, military services and federal civilian agencies. James Norris, the newly appointed president of Sabre Systems, will continue to oversee the technology company, while Bill Vantine, a veteran government executive, will serve as chair of Sabre’s new board of directors.
Target:
Acquiror:
- Announced: September 9, 2024
- Sector: Intel & Cyber
- Description: GDIT, announced that it has acquired Iron EagleX, Inc. (IEX), a leading provider of artificial intelligence/machine learning, cyber, software development and cloud services for the Special Operations Forces and the intelligence community. The acquisition expands GDIT’s portfolio of differentiated technology capabilities and further strengthens its ability to support defense and intelligence missions across all warfighting domains. As part of this acquisition, hundreds of highly technical and cleared employees from 18 locations will join GDIT’s workforce of 28,000.
Target:
Acquiror:
- Announced: August 8, 2024
- Sector: Intel & Cyber
- Description: Enlightenment Capital, an Aerospace, Defense, Government & Technology (ADG&T) investment firm based in the Washington, DC area, announced it has made a strategic investment in Cryptic Vector, a provider of full spectrum offensive cyber, electronic warfare, and secure radio frequency communications solutions for the IC and DoD. “Cryptic Vector’s technology is shaping the future of information dominance and converged military operations by unifying cyber and electronic warfare operations,” said Devin Talbott, Founder and Managing Partner of Enlightenment Capital.
Target:
Acquiror:
- Announced: August 6, 2024
- Sector: Intel & Cyber
- Description: SIXGEN, a full-spectrum provider of cyber products, operations, and solutions to the U.S. national security and critical infrastructure sectors, announced its acquisition of Boldend, Inc. (“Boldend”). Boldend develops leading-edge cyber and electronic warfare solutions, empowering the U.S. Government’s operations in an evolving threat landscape. Boldend marks SIXGEN’s second acquisition since Washington Harbour Partners’ (“WHP”) investment in the company in November 2023. Boldend’s suite of software and cyber automation tools will further accelerate SIXGEN’s achievement of its strategic vision to empower the digital warfighter.
Target:
Acquiror:
- Announced: July 30, 2024
- Sector: Intel & Cyber
- Description: Parsons Corporation (NYSE:PSN) announced that it has entered into a definitive agreement to acquire BlackSignal Technologies, LLC, a Razor’s Edge portfolio company, in an accretive deal valued at $200 million. BlackSignal is a next-generation digital signal processing, electronic warfare, and cybersecurity provider built to counter near-peer threats. This acquisition will expand Parsons’ customer base across the DoD and IC and significantly strengthen Parsons’ positioning with full-spectrum cyber and electronic warfare. The transaction is consistent with Parsons’ strategy of acquiring high-growth companies with greater than 10% revenue growth and adjusted EBITDA margins.
Target:
Acquiror:
- Announced: July 2, 2024
- Sector: Intel & Cyber
- Description: SIXGEN, a full-spectrum solutions provider of cybersecurity products, announced its acquisition of Secure Enterprise Engineering, Inc. (“Secure-EE”). Secure-EE is a leading provider of bespoke cybersecurity products and services across various domains, and marks SIXGEN’s first acquisition following Washington Harbour Partners’ (“WHP”) investment in the company in November 2023. This acquisition brings unique capabilities, software products, tier I engineers and longstanding customer relationships, accelerating SIXGEN’s strategic vision to empower the digital warfighter.
EV/EBITDA Public Valuation Multiples
As we monitor the Government Contracting Industry, we have classified some of the largest government contractors into three main industry sub sectors defined below.
Multi-Platform Defense Primes
Companies typically involved in the interdisciplinary fields of engineering and engineering management in the delivery of defense related products and services. This includes, but is not limited to weaponry, munitions, electronics and cyber related products and services. 
Government Services
Government contractors focused on the delivery of professional services. These services typically augment or support engineering, IT and software development, cyber security project-based initiatives or bolster the Government’s ability to provide for the national defense.
Defense Technology
Defense prime contractors specialize in the design, construction and support of defense-based products and services. Their work with the Federal Government is typically in a prime contracting relationship as they manage their supply chains and furnish services, supplies or construction to the Government. 
Public Market Data
Multi-Platform Defense Primes
Government Services
Defense Technology
Source: S&P Capital IQ Data as of 06/28/2024
CCA Government Services Indices Stock Performance
- The government services and defense sectors are likely to see continued growth due to geopolitical tensions worldwide, technology innovation, and commercial air activity.
- In September 2024, the S&P 500 recorded its best performance in 11 years. Notably, companies reported strong earnings, and the Federal Reserve cut interest rates for the first time since 2020.
How CCA Helps Government Contractors
Chesapeake Corporate Advisors provides a framework for business owners to focus on building sustainable value and to explore their succession and exit alternatives. We use our proprietary tools and methodologies to assess the market and maximize value through strategy.
CCA is a leading investment bank with extensive expertise in mergers, acquisitions, divestitures, and corporate advisory. We use a comprehensive approach to assist clients develop and execute a buy-side, sell-side or recapitalization strategy domestically and in cross-border transactions.
At CCA, understanding shareholder value is at the center of everything that we do. Our analysis considers the feasibility of mergers, acquisitions, divestitures, ESOPs, management buy-outs and recapitalizations. We provide an objective, assessment of value that is deeply rooted in qualitative and quantitative analysis using our proprietary methodologies.
CCA’s Government Contracting team is a blend of Corporate Advisory, Investment Banking, and Government Contracting Executives. We have worked with dozens of companies in projects ranging from Sell Side Investment Banking, to Ownership Alternatives, to Valuations to Boards of Directors.
The CCA Government Contracting Team
Charlie Maskell
Managing Partner
Charlie leads the CCA teams dedicated in assisting businesses enhance shareholder value and position themselves to sell to a strategic buyer, recapitalize with a private equity investor transition through an internal transaction.
Martin O'Neill
Managing Director
CCA clients appreciate that Marty has walked a mile in their shoes, having spent 30 years as a business leader in companies of various industries and sizes before joining CCA as an advisor to middle market businesses. Learn more:
Michael Zuidema
Managing Director
In leading corporate advisory engagements for our clients, Mike draws on his track record of serving middle-market and privately-held businesses. Mike Zuidema takes an approach that’s proven to achieve results.
Tim Brasel
Managing Director
Tim leads the day-to-day management and execution of many of the deals CCA transacts for its clients. He’s helped lead and guide the sale and acquisition of numerous middle market companies. Learn more:
Katie Kieran
Vice President
Katie has advised many middle market business owners on how to create value and optimize the outcome when they’re ready to sell, drawing on her strong analytics, strategic, and financial modeling skills. Learn more:
Andy Spears
Vice President
From assisting high-growth market leaders through sale processes to advising companies struggling with cash flow issues, Andy has helped a breadth of companies realize their strategic goals for more than a decade.
Kevin Afriyie
Associate
Kevin plays a pivotal role in executing transactions for our esteemed clients, working closely with CCA’s senior bankers. His proficiency in technical skills is evident.
Frank Ihle
Analyst
Frank supports the CCA corporate advisory team in developing business valuations and conducting strategic assessments that help companies determine how to get where they want to go.
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