EDS Corp.'s federal government revenue increased by 20 percent in the first quarter of 2004, but the huge Navy-Marine Corps Intranet project is still draining company profits, according to company statements.
If you want to be a top dog in the federal IT market, you've got to act like one. That's the lesson from the rising stars on Washington Technology's <b>2004 Top 100</b> list. We talk with the Top 100's established players and steady climbers to uncover the latest trends, biggest opportunities and secrets for growing a federal business. <br><a href="http://www.washingtontechnology.com/news/19_3/special-report/23418-1.html">? Overview story</a><br><a href="http://www.washingtontechnology.com/top-100/2004/">? The List</a>
So far this year, federal IT stocks have underperformed in the overall stock market amid concerns of growing budget deficits, slow government spending and election jitters. Added to the improving prospects for commercial IT spending, this has caused some investors to reduce their exposure to the sector.
Systems integrator CACI International Inc. plans to compete for federal contracts two to three times larger than those it has won in the past, after it completes its acquisition of American Management Systems Inc.
The continuing strength in merger and acquisition activity in government IT and defense services must be viewed with a clear understanding that acquisitions are a strategic necessity.
When Michael Jalbert came to E.F. Johnson Inc. in early 1999, the company was losing money, had been delisted from Nasdaq and was facing class action lawsuits from shareholders.
The performance of all federal programs would have to be addressed at least once every five years under a bill introduced by Rep. Todd R. Platts, R-Pa.
The Windsor Group LLC has launched an investment fund that will provide both cash and expert advice to small and midsized government services companies.
Many factors driving consolidation over the past two years are still in place as we begin 2004. Mergers and acquisitions in government services and defense product sectors in 2003 were unprecedented at 147 transactions. That's 14 percent more than in 2002, which saw a then-record 129 transactions. By comparison, from 1999 to 2001, the average was 95 deals.
Since the Sept. 11 terrorist attacks and the country's subsequent emphasis on fighting terrorism and enhancing homeland security, the once sleepy government IT sector has become the darling of Wall Street. In the last two years alone, seven government contracting companies completed initial public offerings raising more than $1.051 billion in equity capital. Significantly, most of these IPO's traded above their initial offering price on the first day of trading, and most are still trading above the initial offering price.
It's no secret that mergers and acquisitions are on the rise. In the government IT market, the number of M&As rose from 47 in 2001 to 64 in 2002 to 73 in 2003. And the aggregate value of those deals jumped from $3.8 billion in 2002 to $5.9 billion last year. Along with the rise in the number of deals, a new generation of M&A players has emerged, such as <b>Todd Stottlemyer</b> of ITS Services, left, <b>Michael Solley</b> of NCI Information Systems and <b>Greg Bedner</b> of Perot Systems. Washington Technology looks at some of these new players and the strategies that are driving their deals.
After commercial IT spending began slowing in 2000 and the economy weakened, federal IT services stocks began outperforming commercial IT service stocks and the broader market indexes.
Making predictions is easy. Getting them right is ... well, not so easy. Just ask the guys who predicted that the stock market would reach 36,000.But that doesn't mean you can't get a useful sense of directions and trends. For our annual look at the year ahead, the Washington Technology staff talked to experts in government and industry and found widespread agreement on several important issues.
In a $65.8 million cash deal, Reston, Va.-based SI International Inc. will buy government IT, engineering and logistics provider Matcom International Corp.
Strong trends among the federal IT service companies, more signs of a turnaround in the commercial sector and net inflows of money from investors have resulted in good stock performance for both groups.
