Small Business Contracting M&A

Opportunities for small business contractors of all categories are growing, both in the U.S. and for OCONUS programs. In addition to international opportunities previously mentioned, some agencies with growing budgets, like Special Operations Command, historically prefer small businesses.

​SOCOM will spend in excess of $3 billion with contractors in FY18… The Command’s emphasis on small business (historically a third of contracts) has led to the development of a strong lower middle market base of emerging, mission-focused solutions providers.

Aronson Capital Partners Summer 2018 Market Pulse

Despite clear growth opportunities, many retiring or transitioning owners looking to sell their small business contracting companies face limited exit opportunities for a few main reasons:

• Strategic buyers are large companies who change the SB status and access to set-asides
• Close competitors are seen as competition sensitive and high risk to engage
• PE investors also are unable to maintain the small business designation

Of course, these small but highly capable mission-focused solution providers are extremely sensitive to reputation, legacy and potential disruptions to the ongoing business, given the important work they are doing in the public interest.

FRAMCOR is addressing this problem through its investment focus on designated small business professional services contractors. Learn more about our detailed strategy and investment criteria.