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

KippsDeSanto’s DealView — Top 10 Merger & Acquisition (“M&A”) Deals of the Quarter(1)

KippsDeSanto & Co., an investment banking firm focused on serving growth-oriented Aerospace / Defense, Government Services and Technology companies, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended June 30, 2020.

While the COVID-19 global pandemic has impacted M&A activity, most notably fueling a decline in  April transaction volume (particularly in the Aerospace / Defense side of the market), buyers generally remain interested in strategic acquisitions. In addition, volume appears to be rebounding with 16 and 28 announced transactions in May and June, respectively, across all three sectors.

The following is our take on the most notable announced M&A transactions in the second quarter of 2020 — not only based on size, but also on strategic importance and / or impact.

Of the above transactions, the following was especially noteworthy:

The aerospace and defense deal of the quarter is AMERGINT Technologies’ pending acquisition of Raytheon Technologies’ (NYSE: RTX) space-based precision optics business (“the Business”).  Formerly a part of Collins Aerospace, the Business provides precision electro-optical systems for national security space missions and defense survivability needs.  This transaction marks the third and final required divestiture as part of the regulatory terms laid out by the Justice Department’s Antitrust Division for the merger between United Technologies and Raytheon.  Upon completion of the transaction, the Business will become a wholly owned business unit of AMERGINT Technologies, a portfolio company of The Blackstone Group.  AMERGINT is a leading provider of software-defined technology for military, intelligence, and commercial space customers with a focus on developing NextGen solutions for capturing, processing, transporting, and exploiting mission critical data.  The acquisition of preeminent electro-optical capabilities will vertically extend AMERGINT’s product offering and allow the combined entity to target more comprehensive space opportunities and contracts.  With a renewed federal and commercial interest in the space industry, the transaction highlights an optimistic outlook of sustained growth and investment in the sector.  In addition, the acquisition highlights the presence of private equity financing in an industry dominated by venture capitalists and start-up funding.

The government technology solutions deal of the quarter is Cognosante’s acquisition of Enterprise Information Services, LLC (“EIS”).  EIS is leading provider of biometrics, cybersecurity, application development, cloud migration, and other IT services to defense and civilian government agencies, including the U.S. Army, Intelligence Community, and Department of Homeland Security.  In addition to its in-demand, NextGen IT offerings, EIS has amassed prime positions on numerous high-profile, full & open (“F&O”) contract vehicles, including Alliant II, Army RS3, and ITES-3S. Through this transaction, Cognosante bolstered its capability set, greatly expanded its DoD presence, and enhanced its contract portfolio.  This deal underscores the continued demand for NextGen IT companies and buyer interest in prime, F&O positions on best-in-class vehicles.  Additionally, despite COVID-19 related market impacts, M&A deals continue to transpire between well-positioned buyers and sellers.

About

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.

Space M&A and Financing Experience

KippsDeSanto & Co. Advises Enterprise Information Services, LLC on its sale to Cognosante, LLC

KippsDeSanto & Co. Advises Enterprise Information Services, LLC on its sale to Cognosante, LLC

KippsDeSanto & Co. is pleased to announce the sale of its client, Enterprise Information Services, LLC (“EIS” or the “Company”), to Cognosante, LLC (“Cognosante”).

Founded in 1994 and based in Vienna, VA, EIS provides cybersecurity, biometrics, application development, cloud migration, and other IT services to various U.S. Federal Defense, Intelligence, and Civilian government agencies.

In addition to its in-demand services offering, EIS has amassed prime positions on numerous high-profile full-and-open contract vehicles, including Alliant II, Army RS3, and ITES-3S.

We believe this transaction illustrates various trends in the government technology M&A environment:

  • Despite COVID-19 related market impacts, M&A deals continue to transpire between well positioned buyers and sellers
  • Full and open, prime contract positions, particularly on Best-in-Class and other in-demand vehicles, such as Alliant II, RS3, and ITES-3S, remain strong M&A drivers
  • Buyers continue to place importance on targets with prime, full and open contracts and embedded positioning within well-funded Defense and Intelligence customers

 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.

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 and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency.

Press Release

EIS is Now a Cognosante Company

Vienna, VA – May 18, 2020

Enterprise Information Services, LLC (EIS), an IT solutions company, today announced that it has been acquired by Cognosante.

Since 1994, EIS has provided cybersecurity, biometrics, application development, cloud migration, IT operations, network engineering and program management support to a host of federal government agencies including Defense, the Intelligence Community, Homeland Security, Energy, Commerce, Labor, State, and the United States Postal Service.

“This is an exciting time for both EIS and Cognosante. We are proud of the company and reputation we have built since 1994 and Cognosante is the ideal company to propel EIS to the next level. We share the same commitment in continuing to provide the high-quality customer experience to our clients and an engaging culture for our talented employees,” said Vinod Goyal, President of EIS.

“EIS is a highly respected, well-positioned business providing comprehensive, technology services to its customers.  The addition of EIS is part of Cognosante’s growth strategy that will continue to bring new and enhanced capabilities to our existing customers while entering new customer segments,” said Michele Kang, Founder and Chief Executive Officer of Cognosante.

Effective immediately, EIS becomes a wholly owned subsidiary of Cognosante. EIS founder and CEO, Vinod Goyal will report directly to Cognosante CEO, Michele Kang. To ensure minimal disruption to customers and employees, the EIS name will remain and all EIS leadership will continue to lead daily operations. KippsDeSanto acted as the exclusive financial advisor to EIS as part of this transaction.

 

Getting Deals Done

KippsDeSanto & Co. Advises Continental Mapping Consultants, Inc. on its investment by Bluestone Investment Partners

KippsDeSanto & Co. Advises Continental Mapping Consultants, Inc. on its investment by Bluestone Investment Partners

 KippsDeSanto & Co. is pleased to announce that Continental Mapping Consultants, Inc. (“Continental” or the “Company”) has received an investment by Bluestone Investment Partners.

Founded in 1999 and headquartered in Sun Prairie, Wisconsin, Continental is a rapidly growing geospatial data analytics and mapping solutions provider to defense, intelligence, federal and state government agencies, and commercial customers.  The Company combines remote sensing technologies, proprietary technology, automation tools, commercial cloud services, and artificial intelligence capabilities to deliver products and solutions to its clients.  The Company’s geospatial expertise has evolved to allow for the integration and mission application of vast amounts of data from an ever-increasing number of sensors across all markets.  Continental fuses professional talent and technology (proprietary and commercial off-the-shelf) to curate, consolidate, validate, and disseminate geospatial solutions.  The Company maintains over 100 active production improvement tools, utilizes advanced artificial intelligence capabilities, and employs 165 highly credentialed professionals.  This deal closed on March 2, 2020.

At that date, we believe this investment demonstrated several key trends in the defense, and government and commercial technology M&A environment:

  • Strong market demand existed for growth oriented, intelligence, and national security focused mid-market companies.
  • Private equity continued to deploy capital for new platforms in the government technology market, especially in attractive markets for consolidation and value creation through scale.
  • Strategic buyers and investors recognized the value of highly differentiated solutions that leverage proprietary tools and technologies.

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.

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 and services are Not FDIC insured, Not Bank Guaranteed, May Lose Value, Not a Deposit, and Not Insured by Any Federal Government Agency. 

Press Release

Continental Mapping marks Bluestone’s seventh investment in the Defense, Government, and National Security Market

MCLEAN, Va., March 10, 2020 /PRNewswire/ — Bluestone Investment Partners, LLC (“Bluestone”), a McLean, Virginia-based private equity firm, is pleased to announce the completion of an investment in Continental Mapping Consultants, LLC (“Continental Mapping” or the “Company”). Based in Sun Prairie, Wisconsin, Continental Mapping is a rapidly growing geospatial data analytics and mapping solutions provider to Defense, intelligence, federal and state government agencies, and commercial customers. The Company combines remote sensing technologies, proprietary technology, automation tools, commercial cloud services, and artificial intelligence capabilities to deliver products and solutions to its clients.

John Allen, co-founder and Managing Partner of Bluestone said, “We are excited about our partnership with Continental Mapping. The Company has a 20-year track record of successful delivery of complicated solutions, a great leadership team, a talented and technically differentiated workforce, and attractive clients. We look forward to helping the Company accelerate its growth and expand its capabilities.”

“Our management team and 170 employees are energized about the next phase of growth for Continental Mapping. We look forward to leveraging the experience of Bluestone’s principals to build our business through organic expansion and acquisitions,” said Dave Hart, Chief Executive Officer of Continental Mapping.

Founded in 1999 by Chris Gross, President, and Dave Hart, Chief Executive Officer, Continental Mapping initially provided photogrammetric solutions to local clients in Wisconsin. Through investment in people, technologies, and capabilities, the Company grew to support operations for multiple government and commercial clients around the world. Today, the company maintains over 125 active production improvement tools, utilizes advanced artificial intelligence capabilities, and employs a highly credentialed employee base in Sun Prairie, St. Louis, MO, San Antonio, TX, and Northern Virginia.

Holland and Knight LLP acted as Bluestone’s legal adviser in the transaction. Dixon Hughes Goodman LLP provided quality of earnings services for Bluestone. Morrison and Foerster LLP served as legal adviser to Continental Mapping. KippsDeSanto & Co. served as the investment banking adviser to Continental Mapping. Senior financing for the transaction was provided by EagleBank.

About Bluestone Investment Partners

Bluestone is a private equity firm investing exclusively in lower middle-market companies primarily in the defense and government services arena. Bluestone’s principals have a long and successful track record owning, operating, investing in, and advising companies in the defense and government services sector.  Additionally, many of Bluestone’s investors are industry luminaries who have successfully built, grown, and sold businesses to leading strategic buyers and private equity investors in the sector. Bluestone aims to leverage the industry expertise of its partners and investors to support both organic and acquisition-oriented growth strategies. Few private equity firms offer the combination of industry-focused intellectual and investment capital that Bluestone has assembled.
www.bluestoneinv.com.

About Continental Mapping Consultants, LLC

Established in 1999, Continental Mapping provides geospatial analytics to intelligence community, defense, federal government, state agencies, and commercial clients. The Company has provided products and solutions involving over 180 countries and on all seven continents. The Company was recently recognized for the second year in a row by Inc. magazine as one of the nation’s fastest growing companies. The Company is headquartered in Sun Prairie (Madison area), Wisconsin. www.continentalmapping.com

 

Washington Business Journal Features Robert D. Kipps

When it comes to business advice, Bob Kipps goes ‘Godfather’

Generally, Bob Kipps is the guy who’s going to tell you where there’s a good merger or acquisition deal to be had.

As the managing director and co-founder of Tysons-based investment bank KippsDeSanto & Co., Kipps has advised companies on more than $17 billion worth of M&A deals since opening the firm in 2007. But he found himself on the other end of a megadeal in August, when Capital One Financial Corp. acquired his firm to open a new avenue of investment banking that the larger financial giant, also based in Tysons, had yet to pursue. Terms of the 2019 deal were not disclosed.

Months into the new marriage, Kipps said he is already feeling the benefits of being part of a major business enterprise. We sat down with him to talk about what the M&A market looks like in 2020 for government contracting and where he feels at home, when away from the boardroom.

Read More

KippsDeSanto & Co. advises BEI Precision Systems & Space Company on its acquisition of Wenzel Associates, Inc.

KippsDeSanto & Co. advises BEI Precision Systems & Space Company on its acquisition of Wenzel Associates, Inc.

KippsDeSanto & Co. is pleased to announce the acquisition of Wenzel Associates, Inc., by our client, BEI Precision Systems & Space Company, Inc. (“BEI Precision”), a portfolio company of J.F. Lehman & Company (“JFLCO”).

Headquartered in Austin, Texas, Wenzel is at the forefront in the design and manufacture of crystal oscillators, fixed frequency systems, integrated microwave assemblies, and synthesizers for military, space, and commercial applications.  This marks the second acquisition BEI Precision has made since it was acquired by JFLCO in April 2017, and further solidifies BEI Precision’s robust portfolio of high-end positioning sensor solutions.

Similar to BEI Precision, Wenzel products are differentiated via their ability to provide the highest performance (e.g., lowest phase noise) reliably in extreme environments. Wenzel’s oscillators are key components on numerous military and space platforms, typically on a sole source basis. Notable examples of Wenzel’s past work include providing space-flight hardware for the Lunar Reconnaissance Orbiter for NASA, as well as oscillators for the Mars Pathfinder Lander and the National Polar-orbiting Operational Environmental Satellite System (“NPOESS”).  Currently, Wenzel is engaged to supply oscillators for numerous radar and electronic warfare systems found on high-profile aviation, land and naval platforms. BEI Precision intends to leverage Wenzel’s position on these noteworthy programs to further penetrate existing and tangential customer opportunities.  The acquisition of Wenzel further deepens BEI Precision’s existing base of high-end engineering talent, along with offering additional manufacturing and testing capabilities in Austin.

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.

Press Release

BEI Precision Announces Acquisition of Wenzel Associates, Inc.

October 23, 2019

NEW YORK – BEI Precision Systems & Space Company, Inc. (“BEI Precision”), a portfolio company of investment affiliates of J.F. Lehman & Company (“JFLCO”), announced today the recent acquisition of Wenzel Associates, Inc. (“Wenzel”).

Headquartered in Austin, Texas, Wenzel is a leading designer and manufacturer of crystal oscillators, fixed frequency systems, integrated microwave assemblies and synthesizers for military, space and commercial markets. Since 1978, Wenzel has defined the state-of-the-art in ultra-low phase noise crystal oscillators, manufacturing products that are capable of highly reliable and precise performance in extreme environments. Wenzel is supported by its Croven Crystals division in Whitby, Ontario, which supplies precision quartz resonators with extremely low noise and low sensitivity to vibration. Wenzel is the second add-on acquisition completed by BEI Precision under JFLCO’s sponsorship.

BEI Precision is a leader in high-accuracy positioning sensor technologies, providing advanced design, manufacturing and testing for reliable and resilient products and systems. BEI Precision’s core product lines, which are used primarily in mission-critical defense and space applications, include optical encoder-based and resolver-based positioning systems, scanners for situational awareness requirements and precision accelerometers. BEI Precision is headquartered in Maumelle, Arkansas with an operating subsidiary in Edinburgh, Scotland, and has a longstanding track record of technological innovation, with corporate roots dating back to 1862.

Mark Mirelez, Chief Executive Officer of BEI Precision, commented, “Our partnership with Wenzel will further strengthen both organizations’ abilities to meet the unique and evolving requirements of our customers, particularly in the space and military markets.”

“The Wenzel acquisition further enhances BEI Precision’s reputation as a provider of the highest-performance advanced sensing and positioning solutions for critical applications,” said Steve Brooks, Partner at JFLCO. “We are excited to welcome Wenzel and its strong engineering-focused culture to the BEI Precision platform,” added Will Hanenberg, Principal at JFLCO.

KippsDeSanto & Co. served as financial advisor to BEI Precision and JFLCO, and Jones Day (lead counsel) and Baker Hostetler (international trade, government contracts and defense security compliance matters) provided legal counsel. Sperry, Mitchell & Company served as financial advisor to Wenzel while McGinnis Lockridge were Wenzel’s legal representatives for the transaction.

KippsDeSanto & Co. advises CWPS on its Sale to Red River

KippsDeSanto & Co. advises CWPS on its Sale to Red River

KippsDeSanto & Co. is pleased to announce the sale of its client, Computer Word Processing Systems, Inc. (“CWPS” or the “Company”), to Red River Technology, LLC (“Red River”).

Headquartered in Chantilly, VA, CWPS is a leading technology solutions provider specializing in managed services ranging from complex network, collaboration, data center, cloud management and security through Tier 1 service desk capabilities.  The Company was a first-mover toward building an expertise in managed cloud services, shifting over time from unified communications to services in major cloud platforms including Microsoft Azure, Office 365, and Amazon Web Services (“AWS”).

This acquisition strengthens Red River’s position as a cloud services provider, expands and enhances its geographic managed services portfolio footprint within the Mid-Atlantic and Southeast regions, and provides Red River an additional 24×7 Network Operations Center (“NOC”).

We believe this investment demonstrates several key trends in the managed services market:

  • Strong demand for technology-driven, next-generation managed and cloud service companies;
  • Continued focus on high-growth oriented firms with proven scale and past performance, and sustainable, recurring revenue and profitability; and
  • Significant value attributed to deeply-embedded customer relationships and market know-how

 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.

Red River Acquires CWPS

The Acquisition Adds Depth, Breadth and Maturity to Red River’s Managed Services Portfolio

September 06, 2019 12:20 PM Eastern Daylight Time

CLAREMONT, N.H. & WASHINGTON–(BUSINESS WIRE)–Red River, a technology transformation company, announced today that it has acquired Washington D.C.-based CWPS. The acquisition adds depth, breadth and maturity to Red River’s managed services portfolio and infuses the company with more than 150 talented, innovative people. The acquisition also enhances Red River’s geographic footprint within the Mid-Atlantic and Southeast regions and strengthens the company’s position as a leading cloud services provider by adding scale and scope in major cloud environments including Microsoft Azure, Office 365 and AWS.

CWPS is a technology solutions provider specializing in managed services ranging from complex network, collaboration, data center, cloud management and security through Tier 1 service desk. This expertise enhances Red River’s ability to better serve its customers across the full spectrum of technology – from designing, selling and integrating technology infrastructure to full-lifecycle services, application development and support.

“CWPS has successfully navigated every growth cycle in our business without having to take outside investment,” said Jason Waldrop, CEO of CWPS. “To accelerate our future growth, CWPS needed to find a partner with substance. By joining with Red River and leveraging its scale, resources and mature operating framework, we can provide greater opportunities for our employees and have greater impact on our customers’ technology and business outcomes.”

Red River now has two 24 x7 Network Operations Centers (NOC) and a geographic footprint that features major office locations in New Hampshire, Virginia, Texas and California with engineering and sales resources in over 25 states. CWPS will fold into Red River’s Managed Services organization with Jason Waldrop serving as the division’s President.

About Red River

Red River brings together the ideal combination of talent, partners and products to disrupt the status quo in technology and drive success for business and government in ways previously unattainable. Red River serves organizations well beyond traditional technology integration, bringing more than 20 years of experience and mission-critical expertise in security, networking, analytics, collaboration, mobility and cloud solutions. Learn more at redriver.com.