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, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended December 31st, 2020.
The following is our take on the most notable announced M&A transactions in the fourth quarter of 2020 — not only based on size, but also on strategic importance and / or impact.
Of the above transactions, the following were especially noteworthy:
The aerospace and defense deal of the quarter is Lockheed Martin Corporation’s (“Lockheed Martin”) pending acquisition of Aerojet Rocketdyne Holdings, Inc. (“Aerojet Rocketdyne”). Headquartered in El Segundo, CA with an expansive geographic footprint across the U.S., Aerojet Rocketdyne is a cutting-edge technology company at the forefront of defending America and expanding human and robotic presence across the solar system that provides propulsion and energetics to space, missile defense, strategic, tactical missile, and armaments customers across the globe. The $4.4 billion acquisition translates to a 33% premium of Aerojet Rocketdyne’s share price and represents the next phase of the California-based company’s evolution. Aerojet Rocketdyne contributes nearly 5,000 employees and more than $2 billion in annual revenue to Lockheed Martin. The transaction is expected to enhance Lockheed’s mission support for both U.S. and allied customers, and would make it the leading provider of hypersonic missile systems. The vertically integrated, scalable platform is expected to build on the robust, mission-focused partnership that the two companies have forged, and will combine complementary capabilities, a streamlined supply chain, and substantial human capital to deliver next generation, tip-of-the-spear warfare solutions. The deal highlights the slew of league leaders—such as Parsons in its acquisition of Braxton Science and Technology Group and Raytheon in its acquisition of Blue Canyon Technologies—that have sought to enhance the depth and breadth of their space offerings.
The technology solutions deal of the quarter is Veritas Capital’s (“Veritas”) pending acquisition of the Federal IT and Mission Support Services business unit of Northrop Grumman, which is expected to close in the first half of 2021. The business, which generated approximately $2.3 billion in revenue in 2020, provides a wide range of advanced technology solutions, including cybersecurity, data analytics, cloud, mission-critical application development, and advanced engineering to various Federal defense, intelligence, space, civil, and health agencies. Once finalized, the business is expected to be combined with Peraton, a portfolio company of Veritas, and will create a leading government mission capability integrator and IT provider focused on delivering high-end technology-enabled services. The acquisition is another example of Veritas acquiring corporate divested assets, following its purchases of various Hewlett Packard Enterprise, PricewaterhouseCoopers LLP, and Harris Corporation assets. The Northrop assets will give Peraton additional scale, new capabilities, and expanded customer relationships, particularly across Federal civil and health marketplaces. The deal also highlights continued interest in acquiring established businesses with advanced cyber and cloud capabilities.
About KippsDeSanto & Co KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, 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.
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