In an interview with Association for Corporate Growth National Capital, Ricky White, Partner at RyanSharkey, says that Government contracting still drives the majority of M&A activity in the Mid-Atlantic region.
On March 28, White will chair ACG’s Mid-Atlantic Growth Conference at the Hyatt Regency Tyson’s Corner.
An article on Axial points to growing value from buy and build strategies. The article quotes Gretchen Perkins from Huron Capital:
"Pursuing a buy-and-build strategy and employing add-on acquisitions is a solid way to achieve above market growth and shareholder value in a 3% GDP environment”
In growing markets with fragmented competitor landscapes, PE investors increasingly employ a buy and build strategy by first acquiring a "platform" company -- typically a larger company with established management team and operations -- and then add smaller acquisitions that tend to trade at lower multiples compared to larger companies.
Bain Capital's 2019 Global Private Equity Report further defines the buy and build strategy not as just doing a couple add-ons, but a deliberate strategy with a steady pace of acquisitions:
"We define buy-and-build as an explicit strategy for building value by using a well-positioned platform company to make at least four sequential add-on acquisitions of smaller companies."
And increasingly, add-on details are part of an overall strategy based on M&A, as evidenced by the following table:
DFW Capital Partners has acquired a controlling stake in IT Services contractor Sev1Tech.
“The Sev1Tech management team sought out DFW as a partner to enable growth both organically and through acquisition..." says Bob Lohfeld, CEO of Sev1Tech. From their public announcement:
"Sev1Tech plans to leverage this investment to add new services, support new and existing customers and strengthen our mission capabilities."
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