Volume 1, Issue 5 December 2003

Welcome to the Federal Growth Report.

Our newsletter addresses issues of importance to leaders in the federal technology sector. These people build companies and increase equity value.


For those not directly involved in this industry, you might pass this to someone who is. Feedback and dialogue are welcome by writing me at
paulserotkin@minutemanventures.com or calling 781 750 8065. Thanks.


Regards,


Paul Serotkin
President
Minuteman Ventures LLC

 
in this issue
Are Public Federal/Defense Tech Firms Valued Fairly? - The share prices of these firms have moved sharply upward. Is it justified? We think so. Cast your vote in our survey!
New! Take Our Survey on Public Government Technology Companies - Results to be published in the next issue of the Federal Growth Report
The Federal Deal! - InfoBase, the respected industry research firm, returns with the newly launched feature, reporting a recently announced Federal M&A deal, ASSEC/EMA in this issue.
Contract Central - InfoBase analyzes key recent contract awards for the Federal Growth Report.
Recent Transactions - A quick look at Defense/Government Technology M&A transactions in recent months.
Minuteman Ventures LLC News  
The 100 Day Plan - Minuteman Advisor Gary Dunbar talks to CEOs about jump-starting their company.
 
 
About Us  
Minuteman Ventures LLC focuses on two aspects of mergers and acquisitions. We help small and mid-sized company owners sell their businesses, and assist corporate and private equity buyers in acquiring strategically aligned companies.

We specialize in companies that sell services and products to civilian government agencies and the Department of Defense.

Quick Links
Minuteman Ventures LLC
Gary Dunbar
InfoBase
NDIA
Strategic Research Institute (SRI)
Association for Corporate Growth (ACG)

 

 

 


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Are Public Federal/Defense Tech Firms Valued Fairly?


By Paul Serotkin, Minuteman Ventures LLC

Are public government technical services (GTS) firm valued fairly? We believe they are….though we’d like to hear what our colleagues in industry believe. The survey on this page gives you an opportunity to cast a vote.

While Minuteman Ventures LLC and the FGR mainly address small/mid-tier government firm issues, the valuation accorded by capital markets to this sector relates strongly to private company M&A pricing.

Out of favor for years on Wall Street, GTS firms broke through the long-time IPO barrier in 2002 when the likes Anteon, SRA, Veridian, SI International, Mantech, and MTC Technologies came to market.

As late as mid-1999, when your faithful scribe worked at AverStar Inc., we tried – and failed – to execute our IPO after nearly getting to the finish line. Riding the internet investing bubble, Wall Street was unimpressed by the stability of deep contract backlog and the importance IT would play in automating and streamlining government. Federal operations were about to be digitally transformed, with landmark changes to battlefield missions, agency operations and government-citizen interaction…….yet the capital markets yawned.

The events of September 11 and the fall from grace of internet stocks shifted interest toward GTS companies. Investors came to value their solidity – good cash flow, efficient use of invested capital and the ‘demand’ environment in which they operated.

The ride from the IPO launch point has generally been upward, overcoming uncertainty from the Iraq war and delays in supplemental defense spending and funding for the Department of Homeland Security. As of late, the stocks were trading at an average price-earnings (PE) multiple of over 24 (based on estimated 2004 net earnings).

The consensus seems to favor continued strong pricing on the whole for public GTS firms, as indicated by the following:

Flight to safety. We believe investors have (somewhat) longer memories this time around, and will opt to keep more invested capital in companies that bring strong cash flow, improving margins and broad contract backlog, i.e. GTS companies.

Cash underpins growth. Given the predictability of cash flows and the resulting buildup of excess cash, the GTS firms could complete nearly $1.5 billion in acquisitions in the next year alone without issuing additional equity. So believes Jerry Grossman, the venerable industry commentator from Houlihan Lokey Howard & Zukin, writing in the Nov. 24 Washington Technology. This ability to execute acquisitions via internal cash and affordable leverage is key to continued growth.

Relative growth to other markets. From Jan, 1, 2003 through December 1st, GTS stocks (excluding outlier PEC Solutions) have improved on average 55.3% v 45.2% for the NASDAQ Composite Index. While the GTS composite share price growth is extraordinary, when compared to the NASD as whole, which was coming out of terrible doldrums, the GTS group appreciation seems reasonable and defensible.

Government IT remains strong. Federal Sources, Inc., the federal research house, estimates that federal spending on IT in FY 2004 will reach $62.5 billion, up from $59.3 billion in the President’s federal budget request.

Pipeline begets revenue. Estimable industry analyst Bill Loomis of Legg Mason Wood Walker, penning in the Nov. 10 Washington Technology, believes organic revenue growth for many of the public GTS firms will accelerate next year. This growth follows strong increases in the amount of bids outstanding by the group.

We think the trend is positive. How about you?
> Click here to take our survey
We’ll comment on the results in the next FGR.


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The Federal Deal!
 

FGR offers analysis of a recent M&A transaction involving small- to mid-tier government technology services contractors. The analysis is written by Stuart McCutchan, president and CEO of InfoBase Publishers, Inc.© and editor of the Defense Mergers & Acquisitions, a premier source for information on defense/aerospace M&A. Opinions expressed below are those of InfoBase. All rights reserved. For more on InfoBase Publishers' services, contact Bill Burton (410.820.6821, wkburton@inf obasepub.com) or click http://infobasepub.com.


AMSEC, LLC Acquires Eagan, McAllister Associates, Inc. (EMA)

AMSEC LLC signed a definitive agreement to acquire Eagan, McAllister Associates, Inc. (EMA), an information technology (IT) and engineering services firm headquartered in Lexington Park, MD.    EMA provides IT services focused on aviation and command, control, communications, computers, and intelligence (C4I) programs supporting the U.S. Navy, Marine Corps, Army, and Special Operations Command (SOCOM). This year, Washington Technology ranked EMA #77 in its Top 100 Federal Prime Contractors list, and last year Government Executive ranked EMA #49 in its Top 50 Navy Contractors list."EMA owes its success to our extraordinarily talented employees who apply their unique expertise to meet the most demanding customer requirements while keeping a focus on the ever-changing marketplace.  I feel more than blessed to be a small part of their successes," said John McAllister, EMA president and co-founder.  "AMSEC is a quality company that shares many of our core values.  We view the combination of AMSEC and EMA as a tremendous opportunity for our employees and customers."    "The combination of AMSEC and EMA joins two successful companies capable of delivering more robust, cost-effective engineering and technology solutions to the U.S. government and other customers," said Carl M. Albero, AMSEC CEO and chairman of the board.  "Like AMSEC, EMA is a company that values its employees and encourages strong customer relationships.  John McAllister is a strong community and business leader who will help unite both our management teams and all our employees as we work together to expand our services to the U.S. government and the Navy."    AMSEC LLC is a partnership between San Diego-based Science Applications International Corp. (SAIC) (San Diego, CA) and Northrop Grumman Newport News (Newport News, VA). AMSEC is a full-service supplier to the commercial and Navy maritime industry, providing naval architecture and marine engineering, combat and electronic systems engineering, naval ship systems assessments, maintenance engineering and program development, shipyard industrial engineering and complete logistics services, from technical manual development to provisioning documents, spare parts management and training.

TERMS
Terms of the deal were not disclosed. The acquisition is subject to customary conditions and is expected to be completed by the end of November 2003.    Founded in 1984, EMA has more than 1,000 employees, and reported annual sales of more than $110 million for its most recent fiscal year.    AMSEC was advised on the transaction by Houlihan Lokey Howard & Zukin (HLHZ).

ANALYSIS
AMSEC is at it again, this time announcing its largest of five acquisitions in four years. But it's not the deal's size that is impressive; it's the quality.    In 1999, a struggling SAIC subsidiary known as American Systems Engineering Corp. remade itself when the former Newport New Shipbuilding (now Northrop Grumman Newport News) bought a 45% stake in the business. Since then, AMSEC LLC has acquired companies that, up until now, augmented its legacy as a Navy surface ship maintenance, engineering, and technical support provider.    AMSEC CEO Carl Albero offered a glimpse into the company's strategy at the time of its April 2000 acquisition of M. Rosenblatt & Son, Inc. (New York, NY): "The Navy continues to ask for more integrated services, and we will continue to meet its needs."    Primarily through its previous four acquisitions, the company has grown at a 21% clip since its rebirth to reach more than $225 million in annual revenues with more than 3,000 employees. And in keeping with AMSEC's strategy, its client list is exclusively comprised of Navy organizations. But all of the company's work is performed for two of the U.S. Navy's three largest buyers, the Naval Sea Systems Command (NAVSEA) and the Naval Space and Warfare Systems Command (SPAWAR).    The only piece missing from AMSEC's Navy pie was the Naval Air Systems Command (NAVAIR). The company does not possess the airborne systems qualifications needed to win NAVAIR works that is, of course, until now.    Enter EMA, which is not just a NAVAIR services contractor, but one of Pax River's rising stars. About half of the firm's $110 million in annual revenue comes from direct support of the Naval Air Warfare Center - Aircraft Div. (NAWCAD), NAVAIR's largest buyer of supplies and services. The other $55 million comes from services work for SPAWAR Systems Center - Charleston (SSC-C). Much of EMA's SPAWAR work could be considered NAVAIR-related, since services performed on SSC-C contracts frequently support C4ISR systems sponsored by NAVAIR.    Obviously, there are companies that earn more revenue from NAVAIR services contracts; BAE SYSTEMS comes to mind. But none (including BAE) come close to EMA's growth rate. In the past four years, EMA almost doubled its annual revenues, from $61 million in 1999 to $110 million in 2003. During the same time period, employment jumped from 625 to more than 1,000. We're talking organic growth here; no acquisitions to pad these figures.    The growth rate is even more impressive when considering EMA outgrew in 1996 the small business status it enjoyed during its first 12 years of operation. Most companies struggle with this transition from the world of small business set-asides to the full & open marketplace... EMA flourished.    In conclusion, AMSEC has picked the right firm with which to build its NAVAIR business base. The deal bumps AMSEC's annual revenues to more than $330 million, equally spread between NAVSEA, SPAWAR, and NAVAIR customers. If the Navy previously saw AMSEC's lack of NAVAIR experience as a risk, all parties should consider the risk "mitigated."    Incidentally, AMSEC is the second company this fall to buy its way into the NAVAIR services market. Recently, CACI International, Inc. (Arlington, VA), which previously had very little business in Pax River, finalized its acquisition of C-Cubed Corp. (Springfield, VA), a prominent NAVAIR support services contractor.

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Contract Central
 

A Review of Recently Awarded Federal Contracts


FGR is offering briefs on selected technology services contracts awarded by the U.S. government to mid-tier federal contractors during the last two months. The briefs are compiled by InfoBase Publishers, Inc.©, a leading provider of competitive intelligence for the worldwide defense/aerospace industry. All rights reserved. For more on InfoBase Publishers' services, contact Bill Burton (410.820.6821), wkburton@inf obasepub.com or click http://infobasepub.com


NAWC-TSD Inks IRML to Support Manpower, Personnel & Training Dept.

On 12/9/03, the U.S. Naval Air Warfare Center - Training Systems Div. (NAWC-TSD) (Orlando, FL) awarded Information Resources Management, Ltd. (IRML) (Lexington Park, MD) a five-year, $65 million, IDIQ contract (N61339-04-D-0003) for technical, analytical, and developmental products in support of NAVAIR’s Manpower, Personnel and Training Systems Dept. (AIR 3.4).

Under the contract, the company will provide Navy training systems plans and manpower estimate reports, training products and related services, and the weapons systems technical training needs to include fixed-wing and rotary-wing training products. Work will be performed in Patuxent River, MD.

The contract was competitively procured through solicitation N61339-03-R-0042, which was issued on June 6, 2003, and called for competition limited to small businesses only (NAICS 541330, $23 million). Proposals were due on July 14, 2003. A total of five offers were received.

The procurement is considered a follow-on effort to a multiple-award IDIQ program awarded by NAVAIR HQ in December 1998. The incumbents were:
-- Management Analysis Group Associates (MAGA) (Lexington Park, MD) (N00019-99-D-1143).
-- Compliance Corp. (Lexington Park, MD) (N00019-99- D-1149).
-- Consulting Associates, Inc. (CAI) (Virginia Beach, VA) (N00019-99-D-1157).


NASA MSFC Inks COLSA for Huntsville Operations Support Center (HOSC)

On 12/5/03, the NASA Marshall Space Flight Center (MSFC) (Huntsville, AL) awarded COLSA Corp. (Huntsville, AL) a five-year, $125.4 million, IDIQ contract (NN-M-04-AA07-C) for the Huntsville Operations Support Center (HOSC) contract.

Under the contract, the company will provide operations and maintenance and system development services to meet the requirements of the Flight Projects Directorate, Ground Systems Dept., and the International Space Station (ISS) Payload Operations Center and its customers. Specifically, Colsa will perform program management, engineering, facility operation and maintenance (O&M), and business management in support of MSFC facilities and capabilities required for ground and flight operation.

Program Management functions include planning, controlling, data systems security, and interaction with both domestic and international customers. Engineering includes software and data systems development and maintenance and the evolution of cost-effective and state-of-the-art systems. Facility O&M includes the provision of 24x7 voice, video, and data processing services in support of HOSC and ISS payload operations customers. Business management includes financial management, property management, safety, and procurement.

COLSA’s subcontractors include:
-- CSC Federal Sector, Civil Group, NASA unit (Lanham, MD).
-- Morgan Research Corp. (Huntsville, AL).

The contract was competitively procured through NASA’s Space Mission Communications and Data Services (SMCDS) solicitation (RFP-03-HAW- 001), which was issued in April 2003, and called for bids on five separate work packages supporting NASA's MSFC, Goddard Space Flight Center (GSFC) (Greenbelt, MD), and Kennedy Space Center (KSC).

-- Kennedy Integrated Communications Services (KICS), which provides communications services for the Space Shuttle, International Space Station (ISS), and Payload Carriers and Launch Services (competition limited to small businesses only). This contract was awarded in September 2003 to InDyne, Inc. (McLean, VA).

-- GSFC Near Earth Network Services (NENS) (full & open competition). This contract was awarded in October 2003 to Honeywell Technology Solutions, Inc. (HTSI) (Columbia, MD).

-- GSFC Mission Operation & Mission Support (MOMS), which includes mission operations support for GSFC (full & open competition). This contract was awarded in October 2003 to HTSI. See separate record in this database for more details.

-- MSFC Huntsville Operations Support Center (HOSC), which involves providing voice, video, and data telemetry services in support of simulations, near real-time and real-time flight mission support (competition limited to small businesses only - 541710, 1,000 employees).

-- MSFC Unified NASA Information Technology Services (UNITeS), which involves development, implementation, and management of IT services (full & open competition). This contract has not been awarded.

NASA ARC Picks Planners Collaborative for Business Operations and Technical Services (BOATS)
On 11/26/03, the NASA Ames Research Center (ARC) (Moffett Field, CA) awarded Planners Collaborative (Boston, MA) a $41.6 million contract (NNA04CA76C) for Business Operations and Technical Services (BOATS).

Under the contract, the company will support scientific and technical information, including video, photo, publications, printing and library services; human resource (HR) management and training; acquisitions; equal opportunity and affirmative action; commercial technology; public affairs and education outreach; legal office; and related administrative programs.


NAWCAD Inks Cryptek to Continue Securing JEDMICS

On 11/18/03, the U.S. Naval Air Warfare Center - Aircraft Div. (NAWCAD) (Patuxent River, MD) awarded Cryptek, Inc. (Sterling, VA) a $10.7 million, firm-fixed-price, cost-plus-fixed-fee contract (N00421-04-C-0007) for the procurement and integration of the Joint Engineering Data Management Information and Control System (JEDMICS) Web Security System with DiamondTEK technology.

Under the contract, the company will accelerate the Commercial Communication Security (COMSEC) Evaluation Program processes with the JEDMICS DiamondTEK technology in "a secured coalition wide area network" to several regional allies on behalf of the U.S. Pacific Command’s Coalition Wide Area Network (COWAN).

In addition to supplying hardware and software, Cryptek, will provide installation, engineering services, operational support, testing and capability to securely access engineering drawings and related text via the Web to enable the secure handling of classified and unclassified data within a COWAN series of systems. Work will be performed in Sterling, VA

The work is expected to be completed in July 2005. Contract funds will not expire at the end of the current fiscal year.
This contract was not competitively procured. It was awarded on a sole-source basis, as Cryptek is the only known responsible source that can provide the required products and services that:

-- meets the NSA’s B-2 level for a labeled networked system; now Evaluation Assurance Level 4 (EAL4) for Information Security Assurance.
-- conforms to NSA’s Communications Security requirements for encryption of information.
-- prevents unauthorized access to technical data at the network level.
-- has been issued a NIST FIPS 140-1 level II certificate.


NASA JSC Picks ARES for ISS Program Integration and Control (PI&C)

On 11/13/03, the NASA Johnson Space Center (JSC) (Houston, TX) awarded Applied Research and Engineering Sciences (ARES) (Burlingame, CA) a seven-year, $178 million, labor-hour, cost-plus-award-fee, IDIQ contract (NNJ04AA01C) for International Space Station (ISS) Program Integration and Control (PI&C).

Under the contract, the company will provide products and services supporting ISS program, business and configuration management. It also supports data integration, program information technology (IT), international partner elements integration management, systems analysis and integration, engineering and technical services and safety and mission assurance.

ARES’s subcontractors include:
-- Spacehab, Inc. (Webster, TX).
-- Booz-Allen & Hamilton, Inc., Worldwide Technology Business (McLean, VA).
The contract, which begins January 1, 2004, contains a 57-month base (worth $120.2 million) and two one-year options that, if exercised, would increase its cumulative value to $178 million and extend the period of performance through September 30, 2010.

The contract was competitively procured through solicitation 9-BG-44-02-77P-a, which was issued on May 2, 2003, and called for competition limited to small businesses only (NAICS 541710, 1,500 employees).
The procurement is considered a follow-on to work performed previously under several separate contracts. These are the primary contracts being consolidated (in whole or in part) by PI&C:

-- Configuration Management (NAS9-00125) performed by Johnson Engineering Corp. (Houston, TX) with primary subcontractor System Studies & Simulation, Inc. (S3) (Huntsville, AL).
-- Cost/Schedule Analysis (NAS9-01090) performed by Blackhawk Management Corp. (Houston, TX).
-- Space Station Program Office (SSPO) Phase II Engineering (NAS9-98123) performed by Muniz Engineering, Inc. (Houston, TX).
-- Space Flight Operations Contract (SFOC) (NAS9- 20000) performed by the United Space Alliance, a Boeing/Lockheed Martin joint venture.
-- Spares/Logistics (NAS9-01096) performed by Blackhawk Management Corp. (Houston, TX).
-- Information Systems Analysis and Integration Team Contract (ISAC) (NAS15-10215) performed by Barrios Technology, Inc. (Houston, TX).
-- The Probabilistic Risk Assessment (PRA) portion of the PRA & ISS Documentation Development contract (NAS9-01054).


NASA JSC Picks Barrios for International Space Station Mission Integration Contract

On 11/6/03, the NASA Johnson Space Center (JSC) (Houston, TX) awarded Barrios Technology, Inc. (Houston, TX) a seven-year, $145.1 million, cost-plus-award-fee contract (NNJ04-AA02C) to provide mission integration services in support of the International Space Station (ISS).

Under the ISS Mission Integration Contract (MIC), the company will provide products and services that support mission planning, mission integration, mission operations, international partner integration, and Russian language and logistics services. The effort is part of the restructuring of the ISS program’s contracts to consolidate work, increase efficiency and accountability, and transition the work from development of space hardware to orbital operations.

TechTrans International, Inc. (Houston, TX), experts in Russian-English translation, interpretation, and logistics, is the principal subcontractor leading the international integration services. Other subcontractors include Lockheed Martin Space Operations Co. (LMSO) (Houston, TX) and Futron Corp. (Bethesda, MD).

The work will be performed at JSC, Kennedy Space Center (KSC) (Cape Canaveral, FL), and other CONUS and OCONUS locations.


DEA Picks McDonald Bradley to Support Concorde Project

On 10/20/03, the U.S. Drug Enforcement Agency (DEA) (Washington, DC) awarded McDonald Bradley, Inc. (MBI) (Herndon, VA) a five- year, $11.2 million, IDIQ contract to help connect multiple mission-critical systems.

Under the contract, the company will provide testing, configuration, and change management services for DEA’s Concorde Project, which will allow agents, analysts, and administrative personnel to tap into the DEA’s legacy M204 corporate database system.

"This contract win underscores DEA’s acknowledgment of our expertise in independent verification and validation (IV&V) services, Web development, systems integration, and data visualization capabilities," said Kenneth Bartee, CEO of McDonald Bradley.


SPAWAR’s SSC-SD Selects SYS for Systems Security Support Services

On 10/23/03, the U.S. Naval SPAWAR Systems Center San Diego (SSC-SD) (San Diego, CA) awarded SYS, Inc. (dba SYS Technologies, Inc.) (San Diego, CA) a three-year, $10 million, cost-plus-fixed-fee, IDIQ contract (N66001-04-D-0001) for information systems security engineering and technical services.

Under the contract, which has an estimated total level of effort (LOE) of 126,720 labor-hours, the company will support SSC- SD’s Information Assurance & Engineering Div. (Code 287) during the analysis, design, development, implementation, and maintenance phases of a variety of information systems, as well as support information assurance (IA) activities designed to ascertain the network and information security (INFOSEC) capabilities of these systems.


DISA’s DITCO Selects Arrowhead to Provide Sattelite Space Segment for FAA’s ANICS

On 10/13/03, the U.S. Defense Information Technology Contracting Organization - Alaska (DITCO) (DTA) (Elmendorf AFB, AK) awarded Arrowhead Global Solutions, Inc. (McLean, VA) a 10-year, $30.7 million, firm- fixed-price, IDIQ contract (DCA500-03-D-0002) provide transponder services for the FAA’s Alaska National Airspace System Interfacility Communications System (ANICS), which provides satellite communication covering all of Alaska, plus Seattle, WA.

Under the contract, the company will provide C-band satellite space segment for ANICS, a SATCOM-based air traffic control (ATC) network comprised of two satellites with minimum of four-degree spacing, non- preemptible service. This is an existing network currently utilizing one full transponder on each satellite. The service will be available in increments of both a full transponder and increments less than a full transponder, with potential for growth. Footprint includes the Aleutian Islands.

The contract contains a two-year base and eight one- year options that, if exercised, would increase its cumulative value to $30.7 million and extend the period of performance through October 2013 (estimate).

USACE Huntsville Picks Future Research Corp. for P2 Maintenance and Support
On 9/29/03, the U.S. Army Corps of Engineers (USACE) (Huntsville, AL) awarded Future Research Corp. (Huntsville, AL) a five-year, $10.5 million, IDIQ contract (DACA87-03-D-0034) for Program and Project Management Information System 2 (P2) maintenance and support.

Under the contract, the company will provide services that include deployment, implementation and maintenance of Phase I Version and future phases of P2, a tool designed to effectively manage projects in the U. S. Army Corps of Engineers (USACE) three core mission areas: Military, Civil Works, and Environmental including support services.

P2 will provide structure and support to enhance project management business process, support the Regional Business Concept, provide for decision support capability using a single database, utilize on-line analytical processing (OLAP) tools to generate customized reports, and maximize the use of the Internet.

Army Picks RCI to Provide Desktop Support for HQDA IMCEN
On 9/30/03, the U.S. Defense Contracting Command - Washington (DCC-W) (Washington, DC) awarded Resource Consultants, Inc. (RCI) (Vienna, VA) a seven-year, $202.8 million, time-and-materials, fixed-price, IDIQ contract for desktop support services for the Headquarters Dept. of the Army’s (HQDA) Information Management Support Center (IMCEN).

Under the contract, the company will support HQDA and its almost 90 agencies as well as several DoD and Joint activities by providing enterprise services such as systems analysis and architecture, information assurance, systems administration, e-mail services, server and web- server management, service desk support, installation services, configuration management, and technical logistics services.

The award affords RCI the unique opportunity to support IMCEN in its Desktop Realignment Initiative that will streamline service contracting to achieve standardization, enhanced mission support, timely upgrades of technology, improved end-user productivity, and incorporate best commercial practices.

USAF AAC Funds TYBRIN for FY04 Software Engineering Services (SES)
On 9/30/03, the U.S. Air Force Air Armament Center (AAC) (Eglin AFB, FL) awarded TYBRIN Corp. (Ft. Walton Beach, FL) an $18.1 million, cost-plus-award-fee, cost-reimbursement, no-fee modification (P00006) to a previously awarded contract (F08635-02-C-0034) for software engineering services (SES).

The modification exercises an option for support from October 1, 2003, through September 30, 2004 (FY04). It represents the first of nine one-year options on the 10-year contract, under which TYBRIN provides support of guided weapons systems evaluation, simulations and other services supporting research and development (R&D) for the principals and customers of AAC. Total funds have been obligated.

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Recent Transactions
 

Selected Defense/Government Technology M&A Transactions
Closing/Annc. date Buyer Seller Purchase Price Seller Revenue
Ent.Value/
Revenue
November 3, 2003
Alion Science and Technology Corp.
Innovative Technology Solutions, Inc. N/A
60 employees
 
October 27, 2003 CIBER SCB Computer Technology, Inc. $62.35m $90.5m
99%
October 24, 2003
MTC Technologies, Inc. Vitronics 8.75m+.75m earnout
$16m 55%
October 17, 2003
Rockwell Collins NLX Corp. $125m
$125m
100%
October 16, 2003 AMSEC LLC Eagan, McAllister Associates N/D $110m  
October 13, 2003 Titan Advent Systems N/D $18m  
October 9, 2003 Dyntek Mormar Technology, Inc. N/A N/A  

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Minuteman Ventures LLC News
 

Minuteman Ventures President Paul Serotkin has joined the New England Chapter Board of the National Defense Industrial Association (NDIA). For more, click here….. New client activity….. We recently accepted a ‘buy-side’ engagement with a $160 million government contractor seeking to make acquisitions in the federal IT space. The firm is strong in IT, policy, regulatory support and government strategic communications, serving various markets: environment, energy, healthcare and transportation, with an eye toward strengthening its defense/intel penetration. Interested parties should contact us at 781 750 8065.…Events of interest…..The Association for Corporate Growth (ACG), National Capital Chapter, serving the greater Washington, D.C. area, is hosting its annual M&A conference on May 26. For more, click here….The Strategic Research Institute (SRI) will again offer its 4th Annual Defense & Aerospace Investor & Corporate Development Conference in Reston, Va. this March 9th and 10th. Paul Serotkin will address the group on the mid-tier M&A market in the defense market. Minuteman Advisor Bahar Uttam will also speak on the sale of his company, Synetics, Inc. to ACS Defense. Click here for more.

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The 100 Day Plan
 

by Gary A. Dunbar

Are you frustrated by good strategies that produce disappointment? Consider the 100 Day Plan – a highly focused approach designed to achieve outstanding results.

While simple on paper, the 100 Day Plan prompts managers to act with a sense of urgency that may otherwise be lacking. Specifically, the 100 Day Plan:
·Creates momentum toward change
·Achieves measurable results
·Focuses on short time frames
·Identifies performance shortfalls quickly and is easy to adjust and correct
·Facilitates linking investment to accomplishment

This approach can be very different from traditional strategic plans that focus on: 1) Studies and research; 2) Detailed documented plans; 3) Processes for review and approval; and 4) Investments that require long periods before rewards are evident. Some situations demand traditional strategic plans, but many companies and business situations are better served by the dynamics and flexibility of the 100 Day Plan.

Importantly, the 100 Day Plan works well for mature companies looking for a lift, skyrocketing firms needing to backfill infrastructure, and newer companies deciding how to grow.

10 Simple Steps to Outstanding Strategy Execution.

Consider these steps in launching your 100 Day plan

1.Define your current condition
2.Define where you want to be in two years
3.Define specifically what must be accomplished to get to where you want to be in two years
4.Brainstorm actions to achieve those accomplishments (identify at least 200 actions)
5.Sort your brainstormed ideas in four groups:
         a.Low impact and difficult to achieve
         b.High impact and difficult to achieve
         c.Low impact and easy to achieve
         d.High impact and easy to achieve
6.Sort all the actions in group d into categories
7.Develop a 100 Day Action Plan for each category
8.Assign specific responsibilities and due dates or milestones for all actions
9.Assign responsibility for tracking and reporting progress
10. At the end of 100 Days, repeat process!

Getting Started
This process is most effective as a team effort. A leadership team composed of 8 to 16 people seems to work best. I like to conduct steps 1, 2, and 3 first as individual efforts and then use the information in a group workshop. In the individual effort, I interview individual members of the leadership team and obtain their thoughts. When the workshop convenes, we share the individual thoughts, analyze them, and develop a consensus.

Why two years? You are more likely to achieve strategic objectives that are within a foreseeable future.

Steps 4 to 9 are performed best in an intense 8 hour workshop. The workshop environment gives the 100 Day Plan more depth and effectiveness as well as aligning the leadership team.


Brainstorming Actions

There are two keys to success in this step. First, brainstorm ideas for actions – do not discuss, debate, argue, or advocate ideas. The objective is to drain all of the ideas out of the participants. Aim for a minimum of two hundred action ideas.

Second, make sure your ideas are actions and not platitudes. An action has a starting and ending point, can be assigned to a specific person, has a recognizable output or result and often can be budgeted or cost estimated. If a participant offers the idea “Do high quality work,” that action idea is not acceptable. However, if the participant suggests, “Hire a quality assurance manager,” that action idea is acceptable.


Value Analysis of Action Ideas

As a group, sort each of the more than 200 action ideas into these four quadrants or groups.


Obviously, ideas that have a significant or high impact on achieving your objectives and are easy to complete are high value actions. These are the actions best suited for your 100 Day Plan.

We do not discard the ideas in the other three groups or quadrants. Since those ideas often require money, time and/or effort, we refer all of these to the highest ranked participant with financial authority. It is that person’s responsibility to decide which ideas merit significant expenditure.

The 100 Day Action Plan
Look at all of your high value actions and assemble them into categories of related or similar ideas. Break your total leadership team into planning teams of 2 to 5 people and assign one to three categories to each planning team. The planning teams develop 100 Day Plans for each one of their assigned categories.

The key characteristics of the 100 Day plan are clearly defined actions, established start and complete dates, responsibility for each action, and expected results are clear.

One person should be assigned the responsibility for tracking the progress of the 100 Day Plan and reporting to the entire group what is being accomplished and what is falling behind. This person should also be responsible for calling for corrective action when necessary.

Do It Again and Again
At the end of the first 100 Day Plan, get the leadership team together and create another 100 Day Plan. Keep doing it until your strategic goals are no longer a vision but a reality.

Gary A, Dunbar, Inc., a business development consulting firm specializing in helping federal technology providers and firms in other industries create consistent, long-term revenue growth. Gary is a Minuteman Ventures Advisor. For additional information, contact Gary Dunbar at gary@garydunbar.com. or see www.garydunbar.com.

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About Us
 

Minuteman Ventures LLC focuses on two aspects of mergers and acquisitions. We help small and mid- sized company owners sell their businesses, and assist corporate and private equity buyers in acquiring strategically aligned companies.

We specialize in companies that sell services and products to federal government agencies and the Department of Defense.

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Minuteman Ventures
11 Cypress Drive
Burlington, MA 01803
781-750-8065
paulserotkin@minutemanventures.com
www.minutemanventures.com



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