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805 King Farm Boulevard, Suite 300 | Rockville, Maryland 20850 | P 301.231.6200 | F 301.231.7630 | aronsoncapitalpartners.com

Larry A. Davis Partner

(301) 231-6225

[email protected]

Philip J. McMann Partner

(301) 231-6202

[email protected]

Tim P. Schmitt Vice President (301) 222-8285

[email protected]

Q1 2016 Market Update Aerospace, Defense Technology &

Government Services

http://www.aronsonllc.com/

Q1 2016 Market Update


2

The Evolving Buyer Landscape in the Government Services Market

The relative budget stability and clarity has driven a renewed interest in government services acquisition

targets by commercially focused information technology, consulting, and engineering buyers. Meanwhile,

private equity firms have recently demonstrated confidence in this market by making new federal platform

investments and bolt-on acquisitions for their commercially focused existing platforms. These buyers were

previously on the sidelines for the past few years given the federal sector’s growth challenges and

uncertainty.

Prior to the sequestration and government shutdown period of 2012 - 2014, some of the most reputable

commercially focused strategic buyers completed acquisitions of federally focused targets to gain access

to a large, addressable federal market with moderate, single-digit growth prospects. Examples included

IBM’s acquisition of National Interest Security Company (January 2010), AECOM’s acquisition of

McNeil Technologies (August 2010), and URS Corp’s acquisition of Apptis (June 2011). Notable private

equity activity during this timeframe included KKR & General Atlantic’s acquisition of TASC from

Northrop Grumman, Ares Management’s buyout of Global Defense & Technology (April 2011) and

Providence Equity’s buyout of SRA International (July 2011). However, similar activity stalled from 2012

– mid 2015 and has only recently reemerged.

Renewed M&A Interest: Non-Traditional Strategic Acquirers

While the traditional buyers of federal government services targets (e.g., CACI, ManTech, Boeing) will

still drive the majority of the public buyer activity, a new wave of strategic buyers has emerged over the

past 12 months. Accenture has been relatively quiet in the federal sector in recent years. However, in early

2015, the Company acquired Agilex to enhance its agile delivery for the federal market, and in mid-2015,

31

112

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939193

7074

116

92

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201620152014201320122011201020092008200720062005

Foreign

New PEPlatformPE-BackedPrivate

Public

More Budget Clarity (Relatively)

PE Platform Exits and Corporate Spinoffs / Divestitures/Acquisitions

Sequestration and Shutdown

Flight to Quality Priority Market

Emphasis

Economic Uncertainty

Post-9/11 Spending Ramp Up




3

Accenture closed its acquisition of FusionX to round out its security capability. In early 2016, Ball

Aerospace and Technology Corp. acquired Wavefront Technologies to strengthen its federal market

position in systems and network engineering, software development and analytical services for

cyber/mission-focused programs. INDUS Corporation, a federal IT solutions firm focused on data

analytics, geospatial analysis, and secure infrastructure and software applications was acquired by Tetra

Tech in March 2016 to expand spatial and water information management capabilities for key clients such

as the U.S. EPA. In mid-April 2016, Jacobs announced its acquisition of the 180-person cybersecurity

firm Van Dyke Technology Group to bolster their critical infrastructure protection capabilities. Finally,

NTT Data has announced its $3.0 billion acquisition of Dell Services (formerly Perot Systems). The

combination will create an all-encompassing portfolio of IT and digital business solutions to the public

sector, and significantly increase NTT Data’s presence in North America.

Private-Equity Group (“PEG”) Participation

Historically there have been a handful of PEGs that have an unwavering commitment to investing in the

federal contracting space and made investments throughout the more challenging market conditions of

2012 – 2014. More recently however, a new wave of PEGs have signaled an interest in this space and

established new platforms or made tuck-in acquisitions of federal targets. Clearlake Capital, Marlin Equity

and Kelso & Company all made targeted acquisitions in the past twelve months. Clearlake Capital and its

commercial counterpart Tolt Solutions announced its acquisition of Pomeroy IT in order to expand its

capabilities and cross-sell its solutions to federal clients. Marlin Equity acquired Fidelis Cybersecurity

from General Dynamics in 2015 to capitalize on the advanced threat defense market, which is expected to

near $1.0 Billion in 2016. Fidelis immediately made a follow-on acquisition of Resolution 1 to build upon

its automated incident response cybersecurity capabilities and create a fully integrated, end-to-end

provider of advanced threat defense solutions. In late 2015, Kelso & Company invested in the $1.7 billion,

commercially-focused Sirius Computer Solutions, and in less than six months acquired Force 3, Inc., a

leading cyber security and networking solutions provider to the federal market. The acquisition provides

Sirius with access to both key IDIQ/GWACs and cleared engineering talent, and allows the company to

further capitalize on the government’s continued adoption of next generation technologies. Lastly,

Strategic Acquirers Date TEV Acquirer Target Transaction Rationale

Pending $3,060M

Broader portfolio of IT and digital business solutions

for public sector customers

4/12/2016 N/A

Cybersecurity solutions will boost Jacobs critical

infrastructure protection and federal breath of

capabilities

3/14/2016 N/A

INDUS’ spatial and water information management

capabilities will expand the Company’s solutions

portfolio for key clients

1/29/2016 N/A

Strengthen federal market position in systems and

network engineering, software development and

analytical services

8/4/2015 N/A

Strengthens agile delivery and security capability




4

Millstein and Company, made its first federal investment in DLT solutions in mid-2015, and Platinum

Solutions closed its acquisition of PAE in March 2016.

While sponsors new to the federal space showed confidence in the market, The Carlyle Group’s

acquisition of Novetta Solutions in Q4 2015 might have displayed the strongest signal. Carlyle is one of

longest standing Aerospace & Defense investors, and had not made a Government Services acquisition

since its investment in Booz Allen Hamilton in 2008. This transaction, coupled with Veritas Capital’s

buyout of Alion Science & Technology indicate that even the most sophisticated sector investors are once

again deploying capital to the federal contracting community. Going forward, we expect this trend to

continue as the federal market is once again viewed as a more stable target market with positive growth

prospects.

Private Equity Sponsors Date TEV Sponsor Acquirer Target Transaction Rationale

3/31/2016 N/A

Strengthen engineering capabilities, expand into

federal market and access to strategic

IDIQ/GWACs

10/26/2015 N/A

Expanded scale, corporate resources, service

capabilities and financial flexibility

5/12/2015 N/A

Creation of a fully integrated, end-to-end

provider of advanced threat defense capabilities

Date TEV Sponsor Platform Investment Investment Rationale

3/15/2016 N/A

Diversified portfolio of federal customers with

strong track record for growth

10/31/2015 N/A

Innovator and early adopter of next generation

technologies in the areas of data and cyber

analytics

8/4/2015 N/A

Bullish on the continued expansion and

adoption of software IT


Selected M&A Transactions


5

Leidos to Acquire Lockheed Martin’s IT Business

On January 26, Leidos Holdings, Inc. announced it had entered into a definitive agreement to

acquire and combine with Lockheed Martin’s Information Systems & Global Solutions

(IS&GS) business. Lockheed’s IS & GS business is based in Gaithersburg, MD and provides

management, IT modernization, cyber security, health, air traffic control, biometrics, cloud

computing, and data analytics to government and commercial customers.

Roger Krone, Leidos CEO, commented, "The combination of IS&GS with Leidos creates truly

significant value for our shareholders, and brings together a $10 billion portfolio of solutions,

mission IT, and technical services." The transaction will make Leidos the largest government

services provider, ahead of Booz Allen and the newly-formed CSRA.

The transaction is valued at roughly $5.0 billion, which is the result of Lockheed Martin

shareholders gaining control of 50.5% of the combined business and Leidos making a $1.8

billion special cash payment.

Ball Aerospace Acquires Wavefront Technologies

On January 29, Ball Aerospace, a wholly-owned subsidiary of Ball Corporation, announced

that it had acquired Wavefront Technologies, Inc. Wavefront provides systems and network

engineering, software development and analytical services for cyber and other mission-

focused programs to the US government and commercial industry.

“Our collective, deep subject matter expertise provides tremendous synergies across our

defense, intelligence and information solutions business areas, as well as significant

opportunities to diversify and grow in existing and adjacent markets,” said Rob Strain,

president, Ball Aerospace.

Wavefront’s team of more than 100 employees will immediately transition to Ball Aerospace

as part of the sale. Terms of the transactions were not disclosed. ACP served as the sell-side

advisor to Wavefront Technologies.

Sirius Computer Solutions Acquires Force 3

On March 24, Sirius Computer Solutions, a Kelso & Company portfolio company, announced

the acquisition of Force 3. Based in Crofton, MD, Force 3 provides information security to

both private and public sector clients.

Force 3 is recognized across the federal sector as a leading cyber security and networking

solutions provider. With approximately 170 employees and $260 million in annual revenue,

Force 3 will strengthen Sirius’ solutions portfolio in the areas of information security, software-

defined networking, secure collaboration, enterprise networking, and data center solutions.

Mike Greaney, Force 3 CEO, remarked, “Combining forces with Sirius helps Force 3 take the

next step in accelerating our vision. Together, we will extend our geographic reach, solution

offerings and networking capabilities in an industry that is very dynamic and fast-paced.”

Terms of the deal were not disclosed. ACP served as the sell-side advisor to Force 3.

Acquirer

Target

Acquirer

Target

Acquirer

Target

IS & GS


Public Company Comparables


6

Last 12-Month Returns

Last 12-Month Enterprise Value / EBITDA

Source: CapIQ Mid-Tier Index: BAH, LDOS, CACI, MANT, EGL, ICFI, KEYW, VEC, VSEC, NCIT Tier-1 Index: BA, LMT, GD, RTN, NOC, LLL Defense Index: COL, LLL, HRS, COB, OA, TDY, FLIR, ULE, CUB, KTOS, MRCY, AVAV Aircraft - OEM: UTX, BA, A, GD, SAF, FNC, ERJ, AM, TXT, B, CAE, Aircraft - Suppliers & Aftermarket: PCP, TDG, COL, HO, HXL, TGI, CW, ESL, HEI, MOG.A, ULE

60

80

100

120

140

Apr-15 Jul-15 Nov-15 Mar-16

Inde

xed

Perf

orm

ance

LTM 3/31/2016 Returns

Tier-1: 0.1%

S&P: -0.3%

Defense System/Electronics : -0.3%

Mid-Tier: -1.6%

Aircraft - Suppliers & Aftermarket: -7.0%

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x

13.0x

Apr-15 Jul-15 Nov-15 Mar-16

Ente

rpri

se V

alue

/LTM

EBI

TDA

3/31/2016 EV/LTM EBITDA

Defense System/Electronics : 12.2x

Aircraft - Suppliers & Aftermarket: 10.7x

Aircraft - OEM: 9.0x

Tier-1: 11.3x

Mid-Tier: 9.6x




7

USD in Mi l l ions , exc luding share prices

En terprise LTM LTM

Company Value Rev. EBITDA Rev. EBITDA Rev. EBITDA CY15A CY16P CY15A CY16P

Mid-Tier Federal Service Providers

CSRA Inc. 7,273$ 3,961$ 605$ 1.8x 12.0x 1.4x 8.3x 15.3% 16.5% NA 33.2%

Booz Allen Hamilton Holding Corporation 5,932 5,324 495 1.1x 12.0x 1.1x 10.9x 9.3% 9.9% (0.1%) 2.8%

Leidos Holdings, Inc. 4,063 5,140 434 0.8x 9.4x 0.8x 9.4x 8.4% 8.3% NA 0.9%

CACI International Inc. 3,524 3,336 307 1.1x 11.5x 0.8x 9.5x 9.2% 8.6% (2.9%) 29.3%

Science Applications International Corporation 3,263 4,315 315 0.8x 10.4x 0.7x 9.8x 7.3% 7.4% 11.1% 4.6%

Engility Holdings, Inc. 1,799 2,086 182 0.9x 9.9x 0.8x 7.7x 8.7% 8.7% 52.6% 0.3%

ManTech International Corporation 1,164 1,550 116 0.8x 10.0x 0.7x 9.5x 7.5% 7.5% (12.6%) 4.8%

ICF International Inc. 956 1,132 109 0.8x 8.8x 0.8x 8.1x 9.6% 10.1% 7.8% 3.1%

VSE Corp. 622 534 77 1.2x 8.1x 1.2x NA 14.4% NA 25.9% NA

The KEYW Holding Corporation 364 312 (0) 1.2x NA 1.2x 11.2x (0.0%) 10.9% 7.3% (0.4%)

Vectrus, Inc. 316 1,181 47 0.3x 6.8x 0.3x 6.5x 3.9% 4.1% (1.9%) (0.9%)

NCI, Inc. 198 333 29 0.6x 6.9x 0.6x 6.7x 8.6% 8.6% 5.1% 3.2%

Mean 0.9x 9.6x 0.9x 8.9x 8.5% 9.2% 9.2% 7.4%

Median 0.9x 9.9x 0.8x 9.4x 8.7% 8.6% 6.2% 3.1%

Tier 1 Prime Contractors

The Boeing Company 82,110$ 96,114$ 9,003$ 0.9x 9.1x 0.9x 7.8x 9.4% 11.2% 5.9% (2.2%)

Lockheed Martin Corporation 81,837 46,132 6,635 1.8x 12.3x 1.6x 12.2x 0.1x 13.8% 1.2% 9.1%

General Dynamics Corporation 41,491 31,469 4,660 1.3x 8.9x 1.3x 8.8x 0.1x 14.9% 2.0% 1.1%

Northrop Grumman Corporation 40,016 23,526 3,543 1.7x 11.3x 1.7x 11.3x 0.2x 14.4% (1.9%) 1.5%

Raytheon Company 39,353 23,247 3,283 1.7x 12.0x 1.7x 10.7x 0.1x 15.2% 1.8% 4.6%

L-3 Communications Holdings Inc. 12,705 10,466 1,118 1.2x 11.4x 1.3x 10.6x 10.7% 11.9% (4.7%) (3.6%)

Mean 1.4x 10.8x 1.4x 10.2x 12.9% 13.6% 0.7% 1.7%

Median 1.5x 11.3x 1.5x 10.6x 13.9% 14.1% 1.5% 1.3%

Defense System / Electronics F irms

Rockwell Collins Inc. 14,239$ 5,187$ 1,183$ 2.7x 12.0x 2.6x 11.0x 22.7% 23.8% 0.7% 4.7%

Harris Corporation 14,222 6,376 1,459 2.2x 9.7x 1.9x 9.7x 22.9% 19.8% 28.6% 20.0%

L-3 Communications Holdings Inc. 12,705 10,466 1,118 1.2x 11.4x 1.3x 10.6x 10.7% 11.9% (4.7%) (3.6%)

Orbital ATK, Inc. 6,495 4,532 528 1.4x 12.3x 1.4x 9.2x 11.7% 15.2% 105.6% 1.9%

Cobham plc 5,260 3,056 613 1.7x 8.6x 1.8x 9.2x 20.1% 20.8% 5.9% (4.6%)

FLIR Systems, Inc. 4,418 1,557 357 2.8x 12.4x 2.7x 11.5x 22.9% 23.3% 1.7% 5.0%

Teledyne Technologies Inc. 3,735 2,298 372 1.6x 10.0x 1.6x 10.2x 16.2% 16.1% (4.0%) (0.6%)

Ultra Electronics Holdings plc 2,247 1,071 172 2.1x 13.0x 2.0x 10.7x 16.2% 18.2% (3.7%) 7.0%

Cubic Corporation 1,119 1,426 104 0.8x 10.7x 0.7x 5.6x 7.3% 12.9% 1.2% 6.1%

Kratos Defense & Security Solutions, Inc. 712 657 20 1.1x 34.9x 1.1x 15.8x 3.1% 6.9% (13.9%) 0.5%

Mercury Systems, Inc. 625 243 40 2.6x 15.5x 2.4x 12.4x 16.7% 21.1% 11.1% 14.1%

AeroVironment, Inc. 429 266 17 1.6x 25.1x 1.5x 49.1x 6.5% 3.7% 7.9% 5.3%

Mean 1.8x 14.6x 1.8x 13.8x 14.7% 16.1% 11.4% 4.7%

Median 1.7x 12.2x 1.7x 10.6x 16.2% 17.2% 1.5% 4.9%

Source: Capital IQ

EV: Enterprise Value

LTM: Trailing Twelve Months

NTM: Next Twelve Months

EV as a Mu lt iple of

LTM NTM EBITDA Margin Revenue Growth




8

Aerospace

Aircraft - OEM

United Technologies Corporation 98,715$ 56,098$ 10,472$ 1.8x 9.4x 1.7x 9.2x 18.3% 18.9% (3.1%) 1.4%

The Boeing Company 82,110 96,114 9,003 0.9x 9.1x 0.9x 7.9x 9.4% 11.1% 5.9% (2.2%)

Airbus Group SE 50,820 69,997 6,563 0.7x 7.7x 0.7x 7.0x 7.8% 9.6% (4.8%) 7.6%

General Dynamics Corporation 41,491 31,469 4,660 1.3x 8.9x 1.3x 8.8x 14.8% 14.9% 2.0% 1.1%

Safran SA 30,871 19,837 4,125 1.6x 7.5x 1.5x 8.1x 20.5% 17.9% 7.9% 3.6%

Textron Inc. 12,551 13,423 1,574 0.9x 8.0x 0.9x 7.6x 11.7% 11.8% (3.3%) 5.2%

Finmeccanica SpA 11,436 14,113 1,834 0.8x 6.2x 0.8x 5.3x 10.9% 14.6% (8.7%) 2.4%

Dassault Aviation SA 10,764 4,543 620 2.4x 17.4x 2.4x 20.7x 10.2% 11.5% 2.0% (0.7%)

Bombardier Inc. 8,887 18,172 760 0.5x 11.7x 0.5x 12.3x 3.4% 4.2% (9.6%) (6.0%)

CAE Inc. 3,782 1,745 367 2.2x 10.3x 1.9x 8.1x 19.4% 23.7% (7.7%) 13.0%

Mean 1.3x 9.6x 1.3x 9.5x 12.6% 13.8% (1.9%) 2.5%

Median 1.1x 9.0x 1.1x 8.1x 11.3% 13.2% (3.2%) 1.9%

Aircraft - Suppliers & Aftermarket

TransDigm Group Incorporated 19,378 2,822 1,249 6.9x 15.5x 6.0x 13.2x 44.3% 45.5% 16.1% 13.7%

Thales SA 18,067 15,273 1,645 1.2x 11.0x 1.1x 9.2x 10.3% 11.4% (2.7%) 10.1%

Rockwell Collins Inc. 14,239 5,187 1,183 2.7x 12.0x 2.6x 11.0x 22.7% 23.8% 0.7% 4.7%

Hexcel Corp. 4,584 1,861 411 2.5x 11.2x 2.3x 10.0x 22.0% 23.0% 0.3% 7.8%

HEICO Corporation 4,263 1,227 291 3.5x 14.6x 3.1x 12.9x 23.7% 23.5% 8.2% 13.1%

Curtiss-Wright Corporation 4,035 2,206 411 1.8x 9.8x 1.8x 9.7x 18.7% 19.0% (1.7%) (0.3%)

Triumph Group, Inc. 3,193 3,909 517 0.8x 6.2x 0.8x 5.1x 13.2% 16.1% 4.4% (1.2%)

Esterline Technologies Corp. 2,556 1,873 238 1.4x 10.7x 1.3x 8.9x 12.7% 14.8% (6.9%) 3.8%

Moog Inc. 2,494 2,463 324 1.0x 7.7x 1.0x 8.0x 13.2% 12.6% (6.5%) 0.4%

Ultra Electronics Holdings plc 2,247 1,071 172 2.1x 13.0x 2.0x 10.7x 16.2% 17.9% (3.7%) 7.0%

Mean 2.4x 11.2x 2.2x 9.9x 19.7% 20.7% 0.8% 5.9%

Median 2.0x 11.1x 1.9x 9.8x 17.4% 18.4% (0.7%) 5.8%

Source: Capital IQ

EV: Enterprise Value

LTM: Trailing Twelve Months

NTM: Next Twelve Months


Recent M&A Transactions – Government Services & Defense


9

Close Date Name Industry Buyer Buyer Classification $M /LTM Rev

/LTM

EBITDA

Pending Dell Services (Perot Systems) IT Services NTT DATA, Inc. Public Strategic 3,060.0 N/A N/A

Pending Lockheed Martin Corp. [Information Systems & Global Solutions (IS&GS)] IT Services Leidos Holdings, Inc. Public Strategic 5,000.0 1.0 x N/A

03/31/16 Force 3, Inc. Cyber / Intel Sirius Computer Solutions, Inc. P/E Backed N/A 0.0 x N/A

03/30/16 netAura, LLC Cyber / Intel CenturyLink, Inc. Public Strategic N/A N/A N/A

03/14/16 Advanced Scientific Concepts, Inc. (ASC) [ASCar Division] Electronics Continental AG Public Strategic N/A N/A N/A

03/14/16 INDUS Corp. IT Services Tetra Tech, Inc. Public Strategic N/A N/A N/A

03/04/16 Brimtek, Inc. C4ISR Digital Barriers plc Public Strategic 45.0 1.1 x 12.9 x

03/04/16 NAL Research Corp. Electronics Jordan Company, L.P., The [Drew Marine] P/E Sponsor N/A N/A N/A

03/03/16 Safend Ltd. Cyber / Intel SuperCom Ltd. Public Strategic 1.5 0.3 x N/A

03/01/16 Unmanned Safety Institute (USI) C4ISR ARGUS International, Inc. Private Strategic N/A N/A N/A

02/29/16 Resilient Systems, Inc. Cyber / Intel IBM Corp. Public Strategic N/A N/A N/A

02/29/16 Purple Secure Systems Ltd. IT Services CACI International, Inc. [CACI Ltd.] Public Strategic N/A N/A N/A

02/25/16 Miltec Corp. Other General Atomics Corp. Private Strategic 14.6 0.5 x N/A

02/24/16 KEYW Corp. [SETA Business] Technical Services Quantech Services, Inc. Private Strategic 12.0 N/A N/A

02/05/16 Space/Ground System Solutions Inc. (SGSS) Other O'Neil Group Company, LLC [Braxton Science & Technology Group, P/E Backed Strategic N/A N/A N/A

02/04/16 Obsidian Analysis, Inc. Technical Services Cadmus Group, Inc., The Private Strategic N/A N/A N/A

02/02/16 Invotas International Corp. Cyber / Intel FireEye, Inc. Public Strategic N/A 0.0 x N/A

02/01/16 L-3 Communications (NSS) IT Services CACI International Inc. Public Strategic 550.0 0.5 x N/A

01/29/16 Wavefront Technologies, Inc. Cyber / Intel Ball Corp. Public Strategic N/A N/A N/A

01/29/16 New World Solutions, Inc. Technical Services SOS International, LLC (SOSi) Private Strategic N/A N/A N/A

01/19/16 PAE Other Platinum Equity Holdings (PEH) P/E Sponsor N/A N/A N/A

01/15/16 Cobham plc [Surveillance Business] C4ISR Marlin Equity Partners P/E Sponsor 10.0 N/A N/A

01/15/16 Clearsoft, Inc. IT Services Battle Resource Management, Inc. (BRMi) Private Strategic N/A N/A N/A

01/14/16 Ness Technologies, Inc. [Ness TSG IT Advanced Systems Ltd.] IT Services Israel Aerospace Industries (IAI), Formula Systems (1985) Ltd. Public Strategic 50.0 N/A N/A

01/14/16 iSIGHT Partners, Inc. Cyber / Intel FireEye, Inc. Public Strategic 200.0 N/A N/A

01/13/16 Tandel Systems, Inc. Technical Services AE Industrial Partners, LLC [Belcan, LLC] P/E Backed Strategic N/A N/A N/A

01/13/16 Social Intelligence Corp. [government solutions business] Cloud / Data Analytics Altamont Capital Partners [OMNIPLEX World Services Corp.] P/E Backed Strategic N/A N/A N/A

01/12/16 Tetra Concepts, LLC Cloud / Data Analytics CM Equity Partners, L.P. (CMEP) [Preferred Systems Solutions, Inc. P/E Backed Strategic N/A N/A N/A

01/12/16 Marshall Communications Corp. Other Mission Solutions Group (MSG), Inc. Private Strategic N/A N/A N/A

01/06/16 Talentscale, LLC Other SCST, Inc. Private Strategic N/A N/A N/A

12/31/15 Applied Measurement Professionals, Inc. (AMP) Technical Services PSI Services, LLC Private Strategic N/A N/A N/A

12/23/15 Ability Computers & Software Industries Ltd. Other Cambridge Capital Acquisition Corporation Public Strategic 192.0 3.9 x 9.6 x

12/21/15 Airbus Group SE [commercial satellite business] Other Apax Partners S.A. P/E Sponsor N/A N/A N/A

12/21/15 TeraLogics, LLC IT Services Cubic Corp. Public Strategic 39.0 N/A N/A

12/21/15 GATR Technologies, Inc. C4ISR Cubic Corp. Public Strategic 232.5 N/A N/A

12/18/15 Alta IT Services LLC IT Services System One Holdings, LLC Private Strategic N/A N/A N/A

12/18/15 TeraLogics, LLC C4ISR Cubic Corp. Public Strategic 39.0 N/A N/A

12/16/15 Lewis Innovative Technologies, Inc. Cyber / Intel Mercury Systems, Inc. Public Strategic N/A N/A N/A

12/11/15 Cyveillance, Inc. Cyber / Intel LookingGlass Cyber Solutions, Inc. P/E Backed Strategic N/A N/A N/A

11/30/15 SRA International IT Services Computer Sciences Government Services Inc. Public Strategic N/A N/A N/A

11/23/15 STG. Inc Cyber / Intel Global Defense & National Security Systems, Inc. Public Strategic 165.0 0.8 x 9.0 x

11/19/15 ATC Associates, Inc. Other Bernhard Capital Partners P/E Sponsor 64.0 N/A N/A

11/16/15 Data Networks Corp. IT Services ASRC Federal Holding Co. Private Strategic N/A N/A N/A

11/03/15 MAR, Inc. Cyber / Intel Oasis Systems LLC P/E Backed Strategic N/A N/A N/A

11/03/15 GSM Consulting, Inc. IT Services Preferred Systems Solutions (PSS) (CM Equity) P/E Backed Strategic N/A N/A N/A

11/02/15 The Protective Group, Inc. Other Point Blank Enterprises, Inc. (Sun Capital Partners) P/E Backed Strategic N/A N/A N/A

11/02/15 SPARC, LLC IT Services Booz Allen Hamilton Public Strategic 50.0 N/A N/A

10/31/15 Novetta Solutions, LLC Cyber / Intel The Carlyle Group LP P/E Sponsor N/A N/A N/A

10/30/15 PROSOFT (Assets of the Alliant Business Unit) IT Services Tribalco, LLC Private Strategic N/A N/A N/A

10/26/15 Pomeroy IT Solutions, Inc. (Platinum Equity) IT Services Clearlake Capital Group, L.P. P/E Sponsor N/A N/A N/A

10/05/15 Foreground Security Cyber / Intel Raytheon Co. Public Strategic N/A N/A N/A

09/30/15 Johnson Controls Security Systems, LLC Other Versar, Inc. Public Strategic 20.0 0.6 x N/A

09/15/15 CRGT, Inc. IT Services Salient Federal Solutions P/E Backed Strategic N/A N/A N/A

08/31/15 Information Management Consultants, Inc. (IMC) - Health & Public Sector Group Healthcare IT CALIBRE Systems, Inc. Private Strategic N/A N/A N/A

08/24/15 Kratos (Electronic Products Division) C4ISR Ultra Electronics Public Strategic 265.0 1.2 x 12.0 x

08/21/15 Alion Science and Technology (AST) Other Veritas Capital P/E Sponsor N/A N/A N/A

08/20/15 BOSH Global Services Other Momentum Aerospace Group (MAG) P/E Backed Strategic N/A N/A N/A

08/17/15 EM Business Holdings, Inc. IT Services AMERICAN SYSTEMS Corp Private Strategic N/A N/A N/A

07/31/15 Eagleview Technologies, Inc. Cloud / Data Analytics Vista Equity Partners P/E Sponsor N/A N/A N/A

07/15/15 ManTech Cyber Solutions International (MSCI) Cyber / Intel CounterTack, Inc. P/E Backed Strategic N/A N/A N/A

07/01/15 Development & Training Services, Inc. (dTS) Other The Palladium Group P/E Sponsor N/A N/A N/A

Target Information Buyer Information EV Information

*Brimtek EV includes $20 million earnout based on 2017 performance


Recent M&A Transactions – Government Services & Defense


10


/LTM

EBITDA

06/30/15 EMRISE Electronics Ltd. Other Behrman Capital [Data Device Corp.] P/E Backed Strategic 22.0 N/A N/A

06/30/15 Information Technology Engineering Corporation IT Services Fahrenheit IT, Inc. P/E Backed Strategic N/A N/A N/A

06/30/15 Optimum Technology, Inc. IT Services Appriss Inc. Private Strategic N/A N/A N/A

06/19/15 Knowledge Consulting Group, Inc. Cyber / Intel ManTech International Corporation Public Strategic N/A N/A N/A

06/15/15 Emergency Communications Network, LLC Other Veritas Capital Capital Fund L.P. P/E Sponsor N/A N/A N/A

06/09/15 Eclipse Electronic Systems C4ISR BAE Systems Public Strategic 28.0 N/A N/A

05/29/15 Exelis Inc. C4ISR Harris Corporation Public Strategic 4,750.0 1.4 x 9.2 x

05/29/15 Websense, Inc. Cyber / Intel Raytheon Co. Public Strategic 1,570.0 N/A N/A

05/26/15 Blue Coat Systems, Inc. Cyber / Intel Bain Capital, LLC P/E Sponsor 2,400.0 5.1 x N/A

05/12/15 Resolution1 Security Cyber / Intel Marlin Equity Partners [Fidelis Cybersecurity Solutions, Inc.] P/E Backed Strategic N/A N/A N/A

05/07/15 A-T Solutions, Inc. IT Services PAE P/E Backed Strategic N/A N/A N/A

05/05/15 Scitor Corporation Cyber / Intel SAIC Corporation Public Strategic 790.0 1.3 x 12.4 x

05/04/15 General Dynamics Fidelis Cybersecurity Solutions, Inc. Cyber / Intel Marlin Equity Partners P/E Sponsor N/A N/A N/A

04/28/15 Welkin Associates, Ltd. C4ISR ManTech International Corp. Public Strategic 34.0 N/A N/A

04/28/15 Linxx Global Solutions, Inc. Other Mosaic Capital Partners P/E Sponsor N/A N/A N/A

04/23/15 Kutta Technologies, Inc. C4ISR Sierra Nevada Corp. Private Strategic N/A N/A N/A

04/21/15 Triad Technology Partners' ServiceNow Professional Services Organization IT Services KPMG Private Strategic N/A N/A N/A

04/20/15 Tri Star Engineering, Inc. Other G/Force, Inc. Private Strategic N/A N/A N/A

04/16/15 Qbase (Business Assets) IT Services SRA International P/E Backed Strategic N/A N/A N/A

04/10/15 2d3 Sensing, Inc. C4ISR Boeing Co. Public Strategic N/A N/A N/A

04/07/15 Critical Intelligence, Inc. Cyber / Intel iSIGHT Partners, Inc. Private Strategic N/A N/A N/A

04/06/15 Acentia, LLC Healthcare IT Maximus, Inc. (Federal Service, Inc.) Public Strategic 300.7 1.4 x N/A

04/02/15 LTC Engineering Associates C4ISR CACI International Inc. Public Strategic N/A N/A N/A

04/01/15 Public Engines, Inc. IT Services Motorola Solutions, Inc. Public Strategic N/A N/A N/A

04/01/15 MegaPath (Managed Services Business) IT Services GTT Communications Private Strategic 152.3 N/A N/A

03/31/15 immixGroup Technical Services Arrow Electronics Public Strategic N/A N/A N/A

03/26/15 Agilex Technologies, Inc. IT Services Accenture Federal Services LLC Public Strategic N/A N/A N/A

03/13/15 Ponte Technologies, LLC Cyber / Intel KEYW Holding Corp. Public Strategic N/A N/A N/A

03/05/15 Urban Robotics, Inc. C4ISR OGSystems, Inc. Private Strategic N/A N/A N/A

02/26/15 TASC C4ISR Engility Holdings, Inc. Public Strategic 1,100.0 1.0 x 12.2 x

02/24/15 iNapogee Information Systems (Mercury Systems) Cyber / Intel iNovex Information Systems Private Strategic N/A N/A N/A

02/23/15 Washington Management Group (Deltek) Other Aronson Private Strategic N/A N/A N/A

02/19/15 Autonomic Resources Cloud / Data Analytics CSC Public Strategic N/A N/A N/A

02/02/15 DLT Solutions IT Services Millstein & Co. P/E Backed Strategic N/A N/A N/A

01/28/15 Killick Aerospace Group Other VSE Corp. Public Strategic 184.0 N/A N/A

01/26/15 Sensintel, Inc. Technical Services Raytheon Missile Systems Company Public Strategic NA N/A N/A


Cloud / Data

Analytics

23%

Cyber / Intel

19%

Other

25%

IT Services

13%

C4ISR

8%

Healthcare IT

10%

Technical

Services

2%

Target Industry

Public

Strategic

41%

Private

Strategic

24%

P/E Backed

Strategic

19%

P/E Sponsor

16%

Buyer Classification


Recent M&A Transactions – Aerospace


11


/LTM

EBITDA

Pending TeleCommunication Systems, Inc. Other Comtech Telecommunications Corp. Public Strategic 430.8 1.2 x 10.7 x

Pending Rockwell Collins [Customer Specified Avionics product line] Electronics E.M. Warburg Pincus & Co. [Extant Components Group Holdings] P/E Backed Strategic N/A N/A N/A

Pending Rostock System-Technik GmbH Engineering Ferchau Engineering GmbH Public Strategic N/A N/A N/A

04/05/16 ESNA, Elastic Stop Nut Corporation of America Structures & Components Rosewood Private Investment [Novaria Group} P/E Backed Strategic 0.0 N/A N/A

04/05/16 Sky-Tec Partners, Ltd. [product line] Other Tailwind Technologies, Inc. [Hartzell Engine Technologies, LLC] P/E Backed Strategic 0.0 N/A N/A

04/04/16 Centrax Turbine Components Other Blackstone Group, L.P., The [MB Aerospace Holdings Ltd] P/E Sponsor 0.0 N/A N/A

03/30/16 Landmark Aviation [six FBOs] MRO KSL Capital Partners, LLC P/E Sponsor 190.0 N/A 11.8 x

03/23/16 Forming Technology, Inc. (FTI) Structures & Components Hexagon AB Public Strategic 0.0 N/A N/A

03/23/16 Ferco Aerospace Structures & Components Rosewood Private Investments / Tailwind Advisors [Novaria Group] P/E Backed Strategic 0.0 N/A N/A

03/21/16 Jackson Flexible Products, Inc. Structures & Components Tillerman & Co. P/E Sponsor 0.0 N/A N/A

03/18/16 Airbus Group SE [Defense Electronics] Other KKR & Co. P/E Sponsor 1,200.0 1.1 x N/A

03/15/16 Aurora Flight Sciences Corp. [equity stake] Manufacturer Enlightenment Capital P/E Sponsor 0.0 N/A N/A

03/08/16 Airbus DS SatCom Other Satcom Direct Communications, Inc. Private Strategic N/A N/A N/A

03/01/16 Unmanned Safety Institute (USI) Other ARGUS International, Inc. Private Strategic 0.0 N/A N/A

02/26/16 Harris Corp. [Aerostructures] Structures & Components Albany International Corp. Public Strategic 210.0 2.7 x 15.0 x

02/23/16 Mettis Aerospace Ltd Structures & Components Stirling Square Capital Partners P/E Sponsor 0.0 N/A N/A

02/22/16 New England Airfoil Products, Inc. Other Pietro Rosa TBM S.R.L. Private Strategic 0.0 N/A N/A

02/03/16 AIM Aerospace, Inc. Structures & Components Liberty Hall Capital Partners P/E Sponsor 220.0 N/A N/A

01/29/16 Precision Castparts Corp. Structures & Components Berkshire Hathaway, Inc. P/E Sponsor 37,200.0 3.7 x 13.1 x

01/27/16 General Ecology, Inc. Other JLL Partners [Loar Group, Inc.] P/E Backed Strategic 0.0 N/A N/A

01/19/16 PAE MRO Platinum Equity Holdings (PEH) P/E Sponsor N/A N/A N/A

01/07/16 Silverado Cable Co. Structures & Components Phoenix Logistics, Inc. Private Strategic 0.0 N/A N/A

01/06/16 Able Aerospace, Inc., Able Engineering and Component Services, Inc. MRO Textron, Inc. Public Strategic N/A N/A N/A

01/05/16 Gemcor II, LLC Structures & Components American Industrial Partners [AIP Aerospace] P/E Backed Strategic 14.0 N/A N/A

01/05/16 All Metals Processing of Orange County, Inc. Structures & Components Watson Family Investments, LLC P/E Sponsor 0.0 N/A N/A

01/04/16 Ascending Technologies GmbH Other Intel Corp. P/E Sponsor 0.0 N/A N/A

12/31/15 Pipavav Defence and Offshore Engineering Ltd MRO Reliance Defence Systems Private Limited Public Strategic N/A N/A N/A

12/21/15 Robertson Fuel Systems, LLC Other HEICO Corp. Public Strategic 255.0 N/A N/A

12/16/15 MB Aerospace Holdings Ltd. Structures & Components Blackstone Group, L.P. P/E Sponsor N/A N/A N/A

12/07/15 Abaco Systems, Inc [GE Intelligent Platforms Embedded Systems, Inc.] Electronics Veritas Capital Fund L.P. P/E Sponsor N/A N/A N/A

12/02/15 N2 Imaging Systems, LLC Other UTC Aerospace Systems Public Strategic N/A N/A N/A

11/30/15 GRW Bearing GmbH Structures & Components Kaman Corp. Public Strategic 142.8 2.8 x N/A

11/25/15 Cobham plc [Advanced Composites Business] Structures & Components Meggitt plc Public Strategic 200.0 2.5 x 10.0 x

11/19/15 Breeze-Eastern Corp. Structures & Components TransDigm Group, Inc. Public Strategic 206.0 2.3 x N/A

11/13/15 Secure Communication Systems, Inc. Electronics Benchmark Electronics, Inc. Public Strategic 230.0 N/A N/A

11/05/15 Tri-State Care Flight, LLC Other Air Methods Corp. Public Strategic 222.5 2.7 x N/A

10/28/15 OM Group, Inc. [businesses] Structures & Components Apollo Global Management, LLC P/E Sponsor N/A N/A N/A

10/06/15 The Byran Company, Inc. Structures & Components M Line Holdings, Inc. Public Strategic 5.1 N/A N/A

10/01/15 Bombardier, Inc. [Military Aviation Training Unit] Other CAE, Inc. Public Strategic 15.9 N/A N/A

09/28/15 Corvid Technologies Engineering Chickasaw Nation Industries, Inc. (CNI) Private Strategic N/A N/A N/A

09/23/15 Landmark Aviation MRO BBA Aviation plc Public Strategic 2,065.0 N/A 12.8 x

09/17/15 Aviaso Other Honeywell, Inc. Public Strategic N/A N/A N/A

09/08/15 Compac Development Corporation Electronics Air Industries Group, Inc. Public Strategic 1.2 N/A N/A

08/28/15 Electroservices Enterprises Ltd. Electronics Keysight Technologies, Inc. Public Strategic N/A N/A N/A

08/24/15 Astroseal Products Manufacturing Corp. Structures & Components HEICO Corp. Public Strategic N/A N/A N/A

08/19/15 PneuDraulics, Inc. Structures & Components TransDigm Group, Inc. Public Strategic 325.0 N/A N/A

08/19/15 Baines Simmons Americas, LLC Other Air Partner, Inc. Public Strategic 9.4 N/A N/A

08/19/15 Aerospace & Commercial Technologies, Inc. (ACT) Structures & Components HEICO Corp. Public Strategic N/A N/A N/A

08/14/15 Tempus Applied Solutions, LLC Other Chart Acquisition Corp. Public Strategic 100.0 N/A N/A

07/23/15 RTI International Metals, Inc. Other Alcoa, Inc. Public Strategic 1,500.0 1.9 x 13.0 x

07/20/15 HITCO Carbon Composites, Inc. [Aerostructures division] Structures & Components Avcorp Industries, Inc. Public Strategic N/A N/A N/A

07/08/15 StandardAero MRO Veritas Capital Fund L.P. P/E Sponsor N/A N/A N/A

07/02/15 Educational Services, Inc. Other IMPAQ International, LLC Private Strategic N/A N/A N/A

07/01/15 Cuming Microwave Corp. Structures & Components PPG Industries, Inc. Public Strategic N/A N/A N/A

07/01/15 Safe Air Limited MRO Airbus Group Australia Pacific Limited Public Strategic N/A N/A N/A

06/29/15 Samsung Techwin Co. Other Hanwha Group Public Strategic 1,720.0 N/A N/A

06/22/15 Discovery Air Technical Services MRO Premier Aviation Overhaul Centre, Inc. P/E Backed Strategic N/A N/A N/A

06/22/15 EMC Aerospace, Inc. MRO Velocity Aerospace Group, Inc. P/E Backed Strategic N/A N/A N/A

06/09/15 Sky Manufacturing, Inc. Structures & Components Novaria Group P/E Backed Strategic N/A N/A N/A

06/08/15 Rel-Tech Electronics, Inc. Other RF Industries, Ltd. Public Strategic 3.1 0.4 x N/A

05/28/15 Shimtech Industries Limited Structures & Components Auctus Industries Limited P/E Backed Strategic 215.4 3.0 x N/A

05/27/15 CTC Aviation Group Ltd. Other L-3 Communications Corp. [L-3 Communications Precision Engagement Public Strategic 220.0 2.6 x N/A

05/22/15 CyPhy Works, Inc. Other Draper Nexus P/E Sponsor N/A N/A N/A

05/18/15 Euravia Engineering & Supply Co. Ltd. MRO Magellan Aerospace Corp. Public Strategic 56.5 2.2 x N/A

05/14/15 Pexco LLC Structures & Components TransDigm Group, Inc. Public Strategic 496.0 N/A N/A



Recent M&A Transactions – Aerospace


12


/LTM

EBITDA

05/12/15 Precision Aero Corp. Structures & Components Riverside Company, The [H-D Advanced Manufacturing Co.] P/E Backed Strategic N/A N/A N/A

05/08/15 Global Tubes Structures & Components AMETEK, Inc. Public Strategic 200.0 1.7 x N/A

05/08/15 AeroGroup, Inc. Other AGD Systems Corp. Private Strategic N/A N/A N/A

05/06/15 Alu-Forge, Inc. Structures & Components Precision Castparts Corp. Public Strategic N/A N/A N/A

05/05/15 Volartec MRO Seabury Group [Seabury Enterprise Solutions, LLC] P/E Backed Strategic N/A N/A N/A

05/01/15 Era FBO, LLC MRO Carlyle Group, The [Landmark Aviation] P/E Backed Strategic N/A N/A N/A

05/01/15 Voyageur Airways Limited MRO Chorus Aviation, Inc. Public Strategic 65.7 N/A 4.7 x

04/30/15 Optech, Inc. Electronics Teledyne Technologies, Inc. Public Strategic 46.8 0.9 x N/A

04/28/15 C&C Manufacturing Corp. Structures & Components Special Aerospace Services Private Strategic N/A N/A N/A

04/24/15 Sargent Aerospace & Defense Business MRO RBC Bearings, Inc. Public Strategic 500.0 2.6 x N/A

04/16/15 Boyd Corp. Structures & Components Genstar Capital P/E Sponsor N/A N/A N/A

04/14/15 Aerospheres (UK) Ltd MRO Acorn Growth Companies [AGC Aerospace & Defense] P/E Sponsor N/A N/A N/A

04/13/15 Kellstrom Commercial Aerospace, Inc. (Kellstrom Materials) Other AE Industrial Partners, LLC P/E Sponsor N/A N/A N/A

04/13/15 RioTech Corp. Electronics IXI Technology Private Strategic N/A N/A N/A

04/06/15 Luchner Tool Engineering Structures & Components Aerospace Precision, Inc. Private Strategic N/A N/A N/A

04/06/15 PHS/MWA Aviation Services MRO E.M. Warburg Pincus & Co. [Wencor Group, LLC] P/E Backed Strategic N/A N/A N/A

04/02/15 Hartzell Aerospace Structures & Components ITT Corp. Public Strategic N/A N/A N/A

03/31/15 Franke Aquarotter GmbH Other TransDigm Group, Inc. Public Strategic 75.0 N/A N/A

03/27/15 DutchAero Services MRO Dubai Aerospace Enterprise [StandardAero] Private Strategic N/A N/A N/A

03/26/15 AAR Corp. [Telair Cargo Group] Structures & Components TransDigm Group, Inc. Public Strategic 725.0 2.4 x N/A

03/20/15 Pacific Avionics Pty. Limited Other Rockwell Collins, Inc. Public Strategic 24.0 N/A N/A

03/16/15 Bolt's Metallizing, Inc. Structures & Components Curtiss-Wright Corp. Public Strategic 13.2 2.2 x N/A

03/16/15 CyPhy Works, Inc. Other Motorola Solutions, Inc. [Venture Capital] Public Strategic N/A N/A N/A

03/12/15 Survitec Group Ltd Other Onex Corp. Public Strategic 680.0 1.8 x N/A

03/11/15 The Sterling Engineering Corp. Structures & Components Air Industries Group, Inc. Public Strategic N/A N/A N/A

03/10/15 ARINC Aerospace Systems Engineering and Support MRO Field Aerospace Private Strategic N/A N/A N/A

03/09/15 Western Metrology, Inc. Structures & Components Blue Point Capital Partners [Selmet, Inc.] P/E Backed Strategic N/A N/A N/A

03/03/15 TITAL GmbH Other Alcoa, Inc. Public Strategic N/A N/A N/A

02/27/15 328 Support Services GmbH Engineering Sierra Nevada Corp. Private Strategic N/A N/A N/A

02/09/15 Alliant Techsystems, Inc. Structures & Components Orbital Sciences Corp. Public Strategic 5,000.0 1.1 x 8.7 x

02/03/15 ADS Aerospace Technical Standards Manufacturers SAE International Industry Technologies Consortia Private Strategic N/A N/A N/A

02/03/15 Newmerical Technologies International Structures & Components ANSYS, Inc. Public Strategic N/A N/A N/A

02/02/15 Barco N.V. [aerospace and defense display businesses] Electronics Esterline Corp. Public Strategic 175.0 0.9 x N/A


Structures &

Components

39%

MRO

20%

Electronics

9%

Engineering

2%

Other

30%

Target Industry

Public

Strategic

48%

Private

Strategic

12%

P/E Backed

Strategic

17%

P/E Sponsor

23%

Buyer Classification


Representative ACP Transactions


13

WHO IS ARONSON CAPITAL PARTNERS?

Aronson Capital Partners is a leading financial advisor to government services and technology firms. We exercise our special

domain expertise in the Defense, Intelligence, and Federal Civilian markets to achieve exceptional results for our clients. In

addition to completing more than 100 transactions in the federal sector, our principals have decades of executive level, hands-on

experience in the industry – a key differentiator that leads to success.

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Mergers & Acquisitions

• Sell & Buy-Side M&A

• Private Equity Investments

• Management Buyouts

• Divestitures

• Asset Sales

Corporate Finance

• Recapitalizations & Restructurings

• Common & Preferred Equity

• Debt Capital Raises

• Minority Equity Investments

Financial Advisory

• Internal Capital Transaction Advisory

• Independent Corporate Valuations

• Fairness Opinions

• Strategic Alternatives Assessments


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