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 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. 


Aggregate Tx Value

20 years

Average Experience


Transactions Closed (TTM)


valuations and marketability studies

Corporate Advisory Services

The CCA Corporate Advisory team takes a holistic approach that’s proven to help businesses create sustainable value through the right combination of strategy and execution. Our process is rooted in a structured, proprietary, data-based approach that leverages the most robust analytical tools and methodologies.

We start by assessing the value and marketability of your business—arriving at an objective business valuation that serves as the essential foundation for determining how to enhance that value through strategic initiatives.

Then we use our proprietary framework to evaluate and arrive at the optimal strategic alternatives to help you achieve your goals. If a business succession or exit is in your plans, our team will help you explore the best options to set you on the right path and ensure a smooth transition—so the business is ready when you are.

Investment Banking Services

Whether you’re buying or selling a business, looking to recapitalize, or seeking new capital to fuel your growth, CCA understands the importance of this transaction in the life of your company. You need an investment banking expert you can trust wholeheartedly to guide you through a complex process and achieve a successful outcome.

Clients have trusted CCA as their investment banking advisor for 30+ years. When you choose CCA as your investment banker, your goals become our goals. We take a comprehensive, holistic approach to achieving the most successful transactions, both domestically and across borders—from preparing you to go to market, through the process of negotiating and closing a deal that produces the optimal results.

Defense & Government Themes and Perspectives

The year was characterized by market headwinds such as inflation, higher interest rates and tightening credit markets, however Defense Technology, Defense Primes and Government Services companies were resilient and still overperformed the broader market.

Headwinds Are Stiff

Tightening credit markets, inflation, and rising interest rates remain a challenge to the broader M&A market and while the Defense, Aerospace, and Government Technology Services markets are somewhat insulated, the volatility in the overall capital markets, lingering political instability across the world and recession fears remain an ever-present theme.

Strategic Growth in Key Tech Areas

Key technology growth areas continue to emerge in our conversations with strategic and financial buyers. Areas such as Artificial Intelligence and Machine Learning with the cloud as an enabler are in demand.  Markets such as Cyber, both offensive and defensive, Space, and Ubiquitous Surveillance see continued growth and investment.

Anti-Trust Scrutiny Remains

Booz, Allen’s defense of its acquisition of Everwatch and Lockheed Martin’s termination of its agreement to acquire Aerojet Rocketdyne in the face of antitrust regulator opposition may represent a new client of DOJ oversight in the Defense, Aerospace, and Government Technology Services marketplace.

Market Trends for ADG

M&A volume has decreased over the last two quarters however there does not seem to be any meaningful decline in valuations. Government Services, remain acquisitive (especially PE-backed strategics) as the battle for labor continues and a historically slow contract award condition adds pressure on managers to meet their quarterly targets.

Private Equity’s Increased Presence

Dry powder in private equity sits at around $1 trillion as of Q4 2022, according to Pitchbook. Its current rate is down slightly from its previous record, $1.8 trillion, at the beginning of 2022. Private Equity accounts for roughly 50% of current M&S transactions. The market expects private equity to be active in 2023 through buy-and-build strategies.

GovCons Outperform the Market

Defense Technology, Defense Primes, and Government Services indices have overperformed the broader market (S&P 500) over the past year. Public companies in the ADG have demonstrated resilience driven by an increasing Defense budget and an expectation of accelerating top-line growth.

Market Segment 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 warfighter, 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 to support the infrastructure, financial, and legal needs of this community.

Clearance Changes in the NDAA

A pilot program to ease the process for “innovative technology companies” to obtain security clearances for their employees. The gov’t would sponsor employees’ clearances while the company works towards obtaining its own facility clearance. The pilot will be limited to 75 companies that are small businesses or non-traditional defense contractors.

Booz Allen Closes Everwatch Deal

In June, the DoJ sued to block Booz Allen from acquiring EverWatch. In its complaint, the government alleged the combination would imperil market competition, harm taxpayers and crimp services provided to the NSA. Booz Allen closed on the Everwatch transaction on October 14th.

Cyber Workforce Crunch

Many regional Intel and Cyber companies have been impacted by the labor shortage of Cyber professionals – often losing senior software staff to the commercial sector. According to Cyberseek, an analytics platform from the National Institute for Standards, US cyber job openings listed in November stood at 769,736.

National Cyber Director to Step Down

Chris Inglis reportedly plans to step down from his post and retire after serving as the president’s top adviser on cybersecurity issues since July 2021. Inglis served as the first national cyber director since the office was established. Under Inglis, the office of the national cyber director, or ONCD, has served as a critical source for guidance amid multiple significant national cyber incidents

SDVOSB Certification Changes

The SBA issued a ruling in line with the 2021 National Defense Authorization Act (NDAA), which transferred authority for certification of SDVOSBs and VOSBs from the VA to the SBA as of January 1, 2023. There a number of nuances to the ruling but one that could impact the M&A market is the duty to notify SBA within 30 days of a change in ownership of an SDVOSB.

Inflationary Relief for Some

Section 822 authorizes a novel authority for defense contractors to obtain inflationary relief on fixed-price contracts. While this is welcome news to defense contractors struggling with increased costs due to inflation, many questions remain on how this authority will be implemented, including to what extent Congress is willing to fund this initiative. Source: (Piliero Mazza)

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 Transaction Highlights



  • Announced: Dec 7, 2022
  • Sector: Digital Services
  • Description: Octo Consulting Group, a provider of digital services to the federal government with expertise in AI, DevSecOps, analytics and cyber, was acquired by IBM.   Octo was a portfolio company of Arlington Capital Partners with 1,500 employees who will now join IBM Consulting’s US Public and Federal Markets organization.  The acquisition of Octo enhances  IBM’s ability to support federal agencies with a flexible, modern approach to digital transformation and their public and federal market organization of 4,200 highly-skilled employees.



  • Announced: Nov 30, 2022
  • Sector: Intel & Cyber
  • Description:

    iNovex, a provider of technology services to defend against cyber threats was acquired by Enlightenment Capital.  The partnership provides iNovex with the financial and strategic resources needed to build a mid-tier Intelligence Community-focused platform with a mission to support critical National Security programs.  Enlightenment plans to continue to invest in the platform and drive growth – both organic and through acquisitions.  iNovex acquired Aurora, CO-based Mercury Systems in 2014



  • Announced: Nov 23, 2022
  • Sector: Cyber & Analytics
  • Description: QinetiQ, Inc., a subsidiary of QinetiQ plc (LSE: QQ.L), completed its acquisition of Avantus Federal, LLC, a portfolio company of NewSpring Capital.  Avantus generated revenues of $300M.  The transaction price was a reported $590M. The combination of QinetiQ US and Avantus creates a unique platform to offer comprehensive mission-led innovation for the most sensitive and complex challenges intelligence, defense, homeland, civilian, and other government customers face today.



  • Announced: Nov 15, 2022
  • Sector: Cyber & Software
  • Description: VT Services (VTG), a portfolio company of The Jordan Company L.P. acquire 100% of Next Rev Technologies.  Nex Rev, a Davidsonville, MD-based company is a provider of cloud security, multi-cloud, enterprise software development, and data analytics solutions for private sector information technology and intelligence markets. Next Rev adds differentiated digital, software, and cyber expertise to VTG’s growing suite of technical capabilities, and greater depth in data science and advanced analytics.



  • Announced: Oct 24, 2022
  • Sector: Intel & Cyber
  • Description: SilverEdge Government Solutions, a portfolio company of Godspeed Capital has acquired 100% of Counter Threat Solutions. CTS  is a provider of all source and counterintelligence analysis, identity intelligence, and enterprise IT for private sector and U.S. federal government intelligence markets. CTS employs more than 100 technical and mission support specialists, nearly 100% of whom hold high-level security clearances. The company will continue to operate with its current leadership under the SilverEdge platform.




  • Announced: Oct 14, 2022
  • Sector: Intel & Cyber
  • Description: Booz Allen Hamilton announced it had completed its acquisition of EverWatch Corp., a portfolio company of Enlightenment Capital for an enterprise value of approximately $440 million. Terms of the transaction were not disclosed. On September 23, 2022, Booz Allen revealed in a court filing that the company values Everwatch Corp. at $440 million. With the closing of the transaction, EverWatch will operate as a wholly owned subsidiary of Booz Allen, working closely with the firm’s National Security Sector.

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 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 12/30/2022

CCA Government Services Indices Stock Performance

  • Government Services, Multi-Platform Defense Primes, and Defense Technology indices have rallied during the recent months, significantly outperforming the S&P 500.
  • While the war in Ukraine persists, countries worldwide are increasing or have committed to increasing defense spending.

How CCA Helps Government Contractors

Strategy &
Corporate Advisory

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.

Investment Banking

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.

Business Valuations &
Financial Opinions

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

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