KippsDeSanto’s DealView – Top 10 M&A Deals of the Quarter

KippsDeSanto & Co., an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies, is pleased to share its DealView – the “Top 10 M&A Deals of the Quarter” – for the quarter ended March 31st, 2021.

Of the above transactions, the following were especially noteworthy:

The aerospace and defense deal of the quarter is the pending acquisition of Cubic Corporation (NYSE: CUB) (“Cubic”) by Veritas Capital and Evergreen Coast Capital (an affiliate of activist investor Elliott Management). Headquartered in San Diego, CA, Cubic is a technology-driven, market-leading provider of integrated solutions that increase situational understanding for transportation, defense C4ISR, and training customers worldwide to decrease urban congestion and improve military effectiveness and operational readiness. Cubic has two divisions: Cubic Mission and Performance Solutions (“CMPS”) and Cubic Transportation Systems (“CTS”). Following a weeks long bidding war, Cubic announced on March 31st that it accepted Veritas and Evergreen’s proposal to buy the company at $75 per share. The contention surrounding the acquisition began on February 8th, when Cubic announced an agreement to be acquired by New York-based private equity firm Veritas Capital and California-based private equity firm Evergreen Coast Capital for $70 per share, or approximately $3.3B. The transaction, which was expected to close in 2Q21, was halted by the March 22nd announcement of Singapore Technologies Engineering’s (“ST Engineering”) (SGX: S63) bid to acquire Cubic for $76 per share, or approximately $3.6B. ST Engineering had planned to sell the CMPS business to an affiliate of Blackstone Tactical Opportunities and intended to invest in CTS and retain the “Cubic” brand. However, on March 29th, subsequent to their original response, Veritas and Evergreen submitted a revised offer of $72 per share, which ST Engineering countered the same day with an offer of $78 per share. Thereafter, Veritas and Evergreen raised their bid to $75 per share, leading to Cubic’s announcement that it would accept the proposal “based on the superior certainty and anticipated timing of closing the existing transaction with” Veritas and Evergreen.

The technology solutions deal of the quarter is the pending acquisition of Perspecta Inc. (NYSE:PRSP) (“Perspecta”) by Peraton Corporation (“Peraton”), a portfolio company of Veritas Capital (“Veritas”). Based in Herndon, VA, Perspecta provides enterprise information technology (“IT”) services to government customers in Federal, state, and local markets. The acquisition bolsters Peraton’s current solutions set as a provider of highly-differentiated space, intelligence, cyber, defense, homeland security, and communications. Once combined, the two organizations will create a leading technology provider delivering end-to-end capabilities in IT and mission support for a diverse array of U.S. government customers. As part of the $7.1 billion purchase price, Perspecta shareholders will receive $29.35 per share in cash, representing a premium of 49.7% to the Company’s unaffected closing stock price of $19.60 on November 6, 2020, the last trading day prior to media reports of a strategic review process. Veritas owned two of the three businesses that were combined to create the publicly-traded Perspecta in 2018 and at the time of the announcement owned approximately 14.5% of total shares outstanding. This acquisition not only demonstrates Veritas’ continued focus on the government technology market, but also highlights the continuation of sector consolidation. Despite the ongoing COVID-19 pandemic and associated economic challenges, M&A deal volume across the government services marketplace remains at record levels, with more than 110 and 45 deals announced in 2020 and year-to-date 2021, respectively.

KippsDeSanto & Co is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience. For more information, visit www.kippsdesanto.com.

Securities and investment banking products and services are offered through KippsDeSanto & Co., a non-banking subsidiary of Capital One, N.A., a wholly owned subsidiary of Capital One Financial Corporation. KippsDeSanto is a member of FINRA and SIPC. Products or services are Not FDIC Insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured By Any Federal Governmental Agency.

KippsDeSanto & Co. Advises The Goal, Inc. on its sale to Motion Recruitment Partners, a portfolio company of Littlejohn & Co.

KippsDeSanto & Co. Advises The Goal, Inc. on its sale to Motion Recruitment Partners, a portfolio company of Littlejohn & Co.

KippsDeSanto & Co. is pleased to announce the sale of its client, The Goal, Inc. (“The Goal” or the “Company”) to Motion Recruitment Partners, LLC (“Motion”), a portfolio company of Littlejohn & Co.

Headquartered in Reston, VA, The Goal is a leading technology talent and consulting provider that specializes in in-demand IT modernization capabilities for marquee clients in the public and private sector.

Leveraging its differentiated business model and strategic teaming partner approach, The Goal has been able to attract and retain scarce, highly-skilled technologists in the areas of application development, cloud enablement and DevOps, cybersecurity, and data management in support of long-term government contracts, commercial engagements, and other complex IT modernization programs. As an embedded partner and teammate, The Goal is well-positioned to expand its footprint within several high-growth, existing clients and capture significant new business opportunities with emerging clients in need of scalable talent solutions for complex IT modernization programs.

The acquisition adds The Goal’s expansive Federal IT consulting business to Motion Recruitment Partners’ existing company portfolio.

We believe this transaction demonstrates several key trends in the Federal and commercial technology talent and consulting market:

  • Significant market demand for highly skilled employees and in-demand capabilities focused on technology, application, infrastructure, and operation modernization creates highly attractive acquisition opportunities;
  • Buyers continue to place significant value on firms with key Federal market presence, entrenched customer relationships, and long-term contractual engagements to augment existing client portfolio, scale, and accelerate growth; and
  • Private equity continues to deploy capital in the technology talent and consulting market, building differentiated middle market platforms through buy and build strategies

About KippsDeSanto & Co. KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity, and industry experience.  We help market leaders realize their full strategic value.  Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships.  There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Securities and investment banking products and services are offered through KippsDeSanto & Co., a non-banking subsidiary of Capital One, N.A., a wholly owned subsidiary of Capital One Financial Corporation. KippsDeSanto & Co. is a member of FINRA and SIPC. Products or services are Not FDIC Insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured By Any Federal Governmental Agency.

Press Release

Motion Recruitment Partners Expands Portfolio into Federal Tech Consulting with Acquisition of The Goal

BOSTON, March 4, 2021 /PRNewswire/ — Motion Recruitment Partners LLC (parent company to North American IT Staffing & Managed Solutions provider Motion Recruitment and Global Recruitment Process Outsourcing – RPO and Managed Services Programs – MSP provider Sevenstep) announced today that it has acquired The Goal, a nationwide leader in Technology Consulting and valued Teaming Partner to Federal clientele within the Healthcare, Civilian, and Defense sectors.

The Goal brings an additional and highly complementary set of talent solutions to the MRP portfolio of companies and will continue to operate with their current brand, leadership, staff, and structures. With this new partnership and in-house expertise, the Motion Recruitment business looks to further grow its own IT Managed Solutions consultative practice within the Commercial sector and Sevenstep will be increasing its focus on identifying RPO and MSP opportunities in the Federal space.

“The Goal’s leadership team has an incredible reputation and has built a truly impressive business. They will be taking us on an exciting new journey into Tech Consulting within the massive Federal marketplace,” said Beth Gilfeather, CEO of Motion Recruitment Partners, LLC. “With a strong focus on tech talent markets such as SAAS, Cloud, Cybersecurity, and Digital Transformation, The Goal is well positioned for the future as we see significant growth in all of these areas.”

“The timing could not have been better. The Goal is in a heavy growth phase with several new large-scale wins and the inevitability of the marketplace surge this year. We feel we have the exact right partner to help us scale in Motion with their extensive and proven organic growth story,” said Mark Simons, CEO & Founder of The Goal. “Most importantly we wanted a cultural match, and we are pleased to have found the Motion team, which shares our core values and beliefs.”

About Motion Recruitment Partners
Established in 1989, Motion Recruitment Partners LLC is parent company to a group of leading global talent solution providers. Motion Recruitment provides IT Staffing & Managed Solutions across North America for Contract and Direct Hire needs as well as organizes the ‘Tech in Motion’ tech networking and award series. Sevenstep provides Recruitment Process Outsourcing (RPO), Managed Service Provider (MSP), Talent Data Analytics, and Employment Branding solutions to large scale employers across the globe.

About The Goal
Established in 2002, The Goal is a North American leader in Tech Consulting and IT Teaming Partnerships within the Healthcare, Civilian, and Defense sectors of the Federal marketplace. Specializing in complex mission-critical projects, The Goal’s demonstrated areas of expertise include: SAAS, Cloud, Cybersecurity, Digital Transformation, and IT Modernization.

For more information, visit:
www.motionrecruitment.com
www.sevensteprpo.com
www.thegoalinc.com

National Security Experience

KippsDeSanto & Co. Advises Millennium Engineering and Integration Company on its Merger with QuantiTech LLC, a Portfolio Company of Sagewind Capital LLC

KippsDeSanto & Co. Advises Millennium Engineering and Integration Company on its Merger with QuantiTech LLC, a Portfolio Company of Sagewind Capital LLC

KippsDeSanto & Co. is pleased to announce the merger of its client, Millennium Engineering and Integration Company (“MEI” or the “Company”), with QuantiTech LLC, a portfolio company of Sagewind Capital LLC.

Headquartered in Arlington, Virginia, MEI provides advanced systems engineering and integration solutions for federal, space, defense, and intelligence agencies. For more than 20 years, MEI has supported vital space / space resiliency, missile, aircraft, cyber, and ground-based programs.

The combination with MEI strengthens QuantiTech’s capabilities in the missile defense, space, and intelligence markets and solidifies the combined company’s position as a leading defense and space engineering and integration platform.

We believe this transaction highlights several key trends in the defense and government technology mergers and acquisitions (“M&A”) market:

  • There remains strong buyer demand for advanced engineering capabilities and access to large scale, well-funded space and defense programs
  • Buyers continue to value franchise positions within high-priority mission areas, including missile defense, space, cybersecurity, and intelligence
  • Financial sponsor interest remains elevated for well-positioned defense and government assets, particularly considering ongoing pandemic-related market uncertainty
  • Favorable market dynamics have expanded the group of well-capitalized buyers in the sector, from private equity and foreign companies to SPACs, providing sellers today with a plethora of options when considering strategic liquidity events

KippsDeSanto & Co. is an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships. There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

Investment Banking products and services are offered through KippsDeSanto & Co., a non-bank subsidiary of Capital One, N.A., a wholly-owned subsidiary of Capital One Financial Corporation, and a member of FINRA and SIPC. Products or services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

QuantiTech LLC Announces Merger with Millennium Engineering and Integration Company

HUNTSVILLE, Ala., Feb. 10, 2021 /PRNewswire/ — QuantiTech LLC (“QuantiTech”), a portfolio company of Sagewind Capital LLC (“Sagewind”), announced today that it has merged with Millennium Engineering and Integration Company (“MEI”). The combined company is an industry leader in providing engineering services and solutions for mission critical programs within key U.S. defense and civilian agencies. Financial terms of the transaction were not announced.

QuantiTech and MEI have independently developed world-class systems engineering and integration capabilities across a wide range of markets, including space, counter unmanned aircraft systems, hypersonics, defense, cyber, intelligence, aviation, and missile defense.  Both companies are trusted partners and solution providers to the U.S. Government and commercial industry solving engineering challenges on the nation’s most vital defense and civilian programs.

Patrick Murphy, who served as President and Chief Executive Officer of MEI and is an industry veteran with over 20 years of government contracting leadership experience, will serve as President and Chief Executive Officer of the combined company. Randy Cash, who served as Executive Chairman of QuantiTech, and was previously its President and CEO, will continue to serve as Executive Chairman of the Board.  Other members of the management teams and employees of both companies will continue with the combined company.

“We are extremely excited to combine MEI and QuantiTech,” said Randy Cash. “This combination brings together two companies with an extraordinary depth of talent and expertise in high-end engineering.  By strengthening our capabilities in the missile defense, space, and intel markets, we will be even better positioned to continue serving the important missions of the U.S. Government.”

“Together QuantiTech and MEI will have the agility and responsiveness at scale to rapidly adapt to the changing needs of our customers’ missions and the marketplace,” added Patrick Murphy.  “With over 2,000 employees across more than 20 locations in the US, our capacity and ability to support our current and future US Government and commercial clients is greater than ever.”

“As part of our growth plan, QuantiTech has been looking for a partner with shared values and a similar company culture that allows us to increase the scale and depth of service offerings we provide to our customers and the market,” said Darryl Wortman, President and CEO of QuantiTech.  “We are excited about joining forces with MEI and building upon our enhanced culture of innovation to drive dynamic solutions to our customers’ complex challenges.”

KippsDeSanto & Co. served as financial advisor and Miles & Stockbridge served as legal advisor to MEI on this transaction. RBC Capital Markets LLC served as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to QuantiTech.

About MEI

Millennium Engineering and Integration Company provides world-class systems engineering and integration capability in the space, defense, cyber, intelligence, and aviation. MEI is a high-end engineering services provider to the U.S. Government and commercial industry solving engineering challenges on the Nation’s most vital programs in space/space resiliency, missiles, aircraft, cyber, and ground systems. For more information please visit www.meicompany.com.

About QuantiTech

QuantiTech is a leading provider of highly technical engineering services to the Army, Air Force, NASA, and various other key defense agencies responsible for maintaining technological superiority. Its capabilities are focused on systems engineering, cybersecurity, test & evaluation and program management for key defense end-markets such as hypersonics, counter unmanned aircraft systems, and human spaceflight. QuantiTech was founded in 1991 and is headquartered in Huntsville, AL. For more information please visit www.quantitech.com.

About Sagewind Capital

Sagewind Capital LLC is a New York-based middle-market private equity firm that partners with exceptional management teams, and focuses on significant capital appreciation by helping businesses grow organically and through strategic acquisitions. Sagewind invests across several industries, including government services, aerospace & defense, software, information technology, healthcare and business services. The firm is focused on long-term capital appreciation and has the flexibility to own businesses for extended periods. For more information please visit www.sagewindcapital.com.