KippsDeSanto & Co., a leading aerospace / defense and government technology solutions investment bank, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended
June 30, 2018. The following table is our take on the most notable announced M&A transactions — not only based on size, but also on strategic importance and / or impact.

Click here to download the table above 

Of the above transactions, the following were especially noteworthy:

The aerospace / defense deal of the quarter is Boeing Co.’s acquisition of KLX, Inc. (NASDAQ:KLXI). KLX primarily provides aerospace fasteners, consumables, and logistics services worldwide through its
Aerospace Solutions Group, which generated 90% of total sales in its most recent fiscal year. KLX’s Energy Services Group made up the remaining 10% of revenue, and Boeing plans to divest the business unit
before closing the deal. The transaction values the Aerospace Solutions Group at a multiple of 15.7x LTM.

(1) KippsDeSanto & Company is not affiliated with any other company mentioned herein
(2) Source: KLX Press Release on May 1, 2018

EBITDA(2) for FY2017 and values the entire business at $4.2 billion, representing 14.7x LTM EBITDA. KLX will operate as part of Boeing’s expanding aircraft services business, Boeing Global Services, and will be
fully integrated with Boeing’s parts subsidiary, Aviall. The acquisition continues Boeing’s strategic push into the highly profitable aftermarket and MRO sector, as Boeing continues to make acquisitions along its
vertical supply chain. The transaction is expected to generate $70 million in cost-savings by 2021, and Boeing plans to finance the acquisition through a combination of cash on hand and $1.0 billion of net
debt.

The government technology solutions deal of the quarter is SOS International’s (“SOSi”) acquisition of STG Inc. The approximately $83 million all cash transaction closed on April 11th. The deal took place
approximately one year after STG’s failed transaction with Preferred Systems Solutions, and nearly five months after STG’s parent company, STG Group, was taken over by creditors. This marks the third and
largest acquisition in three years for SOSi, the Reston-based government services integrator, which also acquired Defense Group Inc., in September 2017, and New World Solutions, in January 2016. STG expands
SOSi’s capabilities across mission-critical technology, cyber, and data solutions. SOSi, with the addition of STG, now has 1,300 employees worldwide. STG also holds the Alliant 2 and Eagle II contracts, among
others, that provide SOSi with an ability to expand its customer base and pursue previously unavailable opportunities. This transaction highlights continued consolidation and capability expansion strategies
amongst mid-tier firms. Moreover, SOSi showcased deal ingenuity in its ability to navigate the complicated ownership and creditor dynamics of STG. As a result of this deal, the SOSi / STG combination
establishes a highly formidable mid-sized IT player with enhanced IT capabilities and footprint.

Click here to access KippsDeSanto’s 2018 Aerospace/Defense & Government Services M&A Survey

About KippsDeSanto & Co.: KippsDeSanto & Co. is an investment bank focused on delivering exceptional results for leading, growth-oriented aerospace / defense and technology companies. We leverage our
creativity and industry experience to provide M&A, private financing and strategic consulting. Capitalizing on real-time industry trends and in-depth technical and strategic analysis, our solutions-driven approach
is highly structured and uniquely tailored to each client. KippsDeSanto is recognized for its market insight and broad industry relationships. We help market leaders realize their full strategic value. KippsDeSanto,
member FINRA/SIPC, is not affiliated with other companies mentioned herein. For more information, visit www.kippsdesanto.com.

 KippsDeSanto & Co., a leading aerospace / defense and government technology solutions investment bank, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended March 31, 2018.  The following table is our take on the most notable announced M&A transactions — not only based on size, but also on strategic importance and / or impact.

Click here to download the table above

Of the above transactions, the following were especially noteworthy:

The aerospace / defense deal of the quarter is TransDigm Group’s acquisition of Extant Aerospace.  The proposed acquisition is worth $525 million, or more than 6x fiscal year 2018E pro-forma revenue.  Aircraft aftermarket sales are expected to drive 80% of Extant’s 2018E revenue, with a majority of revenue derived from the military end-market.  The company licenses or acquires aftermarket products form aerospace and defense original equipment manufacturers, and then provides maintenance and support for these products throughout the rest of its useful life.  Extant support various military aircraft platforms such as the F-16, AH064, F-18, F-15, and C-130.  Its commercial platforms include the King Air series, MD 900 / 902, B747, B757, and B777 as well as various business jets.  TransDigm expects the acquisition to provide significant opportunities for growth and believes that Extant’s unique business model will be a natural fit within its aftermarket-focused value generation strategy.  TransDigm plans to finance the acquisition through a combination of cash on hand and its existing revolving credit facility.

The government technology solutions deal of the quarter is General Dynamics’ (“GD”) announced acquisition of CSRA.  The proposed transaction is worth approximately $9.9 billion, or 11.7x LTM EBITDA.  Recently, GD increased its original February 12^th offer of $40.75 per share to $41.25 after CACI made a counter bid on March 18^th for $44 per share in cash and stock.  GD ultimately prevailed in the bidding war because its offer was all cash, unlike that of CACI’s, which consisted of cash and stock.  CACI’s stock traded down approximately 7% the week after their counter-offer was made public, making its offer less compelling given the stock component.  The deal highlights sector buyers’ continued focus on increasing scale and next-generation IT (“NGIT”) capabilities via M&A.  Following the acquisition, GD’s federal IT business will generate nearly $10 billion per year in revenue.  This will make GD the second largest government contractor, slightly behind $10.6 billion Leidos, which became the largest government IT and services contractor through its merger with the former Lockheed Martin IT business in 2016.  General Dynamics and CSRA have received clearance from anti-trust officials, and the deal is expected to close in the first half of this year.

(1)       KippsDeSanto & Company is not affiliated with any other company mentioned herein