July 15, 2016 - M&A

M&A for Q2 2016—Mergers and More

small-businessThis quarter, the M&A roundup picks up a little more than usual: rather than just the ongoing government contractor acquisition activity, this quarter also brings a report on a company that has been turning away suitors. That’s more than usually hits the deal wires.

First, the “More”:

On June 15, Bloomberg reported that FireEye had recently turned down acquisition offers from at least two potential buyers. The report added that FireEye had been running a sale process with Morgan Stanley, but that the process was said to be no longer active. One of the potential buyers was Symantec, which announced an agreement to acquire Blue Coat Systems, Inc., a few days before news broke on FireEye.

Second, the M&A:

Let’s take a look by industry—cybersecurity, health care, and engineering and research—at a handful of the highlights from this quarter.

Cybersecurity: On April 12, Jacobs Engineering Group, Inc. (NYSE: JEC) announced that it acquired The Van Dyke Technology Group, Inc. Van Dyke focuses on supporting the U.S. Intelligence Community in identity and access management, threat mitigation, and other cybersecurity solutions. The terms of the acquisition were not disclosed. (More here.)

Prime Solutions, LLC, which provides computer network operations services in the U.S. Intelligence Community, was acquired by Altamira Technologies Corporation during May. The announcement was made on May 9, with no mention of price or other terms. (More here.)

Health care: On May 3, DLH Holdings Corp. (NASDAQ: DLHC) announced the acquisition of Danya International. DLHC provides health care and medical logistics services and solutions to federal agencies. Danya provides technology-enabled program management, consulting, and digital communications solutions. The combination was heralded as supporting DLHC’s growth strategy and combining two complementary businesses. (More on that here.) Danya was acquired for $38.75 million, of which $2.5 million was restricted common stock, with the balance being cash.

Engineering and Research: Admittedly, this field is something of a catch-all. But it’s hard to quantify all the industries Wyle, Inc. works in: life science research, space medical operations, and testing and evaluation of aircraft, advanced systems, and networks all make the list. That breadth of experience is expected to join KBR, Inc. (NYSE: KBR) in Q3 upon closing the transaction announced on May 23. The stated purchase price is $570 million, subject to adjustments, with funding from KBR’s existing line of credit and approximately $200 million in cash. (More here from KBR.)

EOIR Technologies, Inc., also provides a wide variety of technology solutions, including cloud computing, big data analytics, advanced visualization, C4ISR, spectrum-related information dominance, smart sensing, training and simulation, and rapid prototyping. The acquisition of EOIR by Arlington Capital Partners was announced on June 24, but the terms of the transaction were not disclosed. (More here.)

From a flat no on up through $570 million, Q2 saw a variety of deals in a variety of industries. Good luck to the integration teams, and we’ll continue watching Q3 with interest.