Analyzing the trends driving deals – a Q&A with Marc Marlin of KippsDeSanto

On Thursday, April 6, 2017, the National Capital Chapter of ACG will be sponsoring their annual Mid-Atlantic Growth Conference. This special event brings together C-level executives and other senior business leaders, investors and service providers from across the east coast to network, discuss business best practices, and share lessons learned about how to improve and grow their enterprises.

<For additional event information, or to register online for the Mid-Atlantic Growth Conference, click HERE.>

In anticipation of this exciting annual event, Corporate Growth, Capital Style will be publishing a series of interviews with the speakers, attendees and organizers of the conference. In our first of these Q&A interviews, we sat down with Marc Marlin.

Mr. Marlin is a Co-Founder and Managing Director at investment bank, KippsDeSanto, and an experienced M&A advisor to leading aerospace, defense, government and technology companies. In this role, he works to advise senior management, boards of directors and shareholders, to help them assess value, make strategic decisions and assist them through the M&A process.

During our discussion, Mr. Marlin discussed deal activity in 2016, how market trends will impact deal activity in 2017, and discussed why the Mid-Atlantic Growth Conference is a “must attend” for business leaders across the East Coast.

Here is what Mr. Marlin had to say:

Marc MarlinCorporate Growth Capital Style (CGCS): As an M&A advisor with significant experience in the government, defense and aerospace market, what was M&A and other deal activity like in 2016? How did the number of deals compare with previous years? 

Mr. Marlin: Deal activity in 2016 was pretty consistent with 2015 in terms of number of transactions. That said, the industry saw an increase in larger transactions to include corporate divestitures (Lockheed/Leidos, Airbus defense electronics/KKR) and the sale of legacy private equity portfolio companies (Camber/Huntington Ingalls, Data Device Corporation/TransDigm).

Strategic buyers such as ManTech, Accenture, L-3, and Rockwell Collins, amongst others, were very active.  We also saw traditional “smart money” continuing to double down in the space, which is a positive signal of things to come. Some examples include Arlington Capital’s Polaris Alpha roll-up on the heels of Carlyle’s acquisition of Novetta, and Veritas’ pending acquisition of Harris’ IT services business and build-out of its Abaco Systems electronics platform.

One additional development on the aerospace and defense side has been the notable consolidation of large tier 1 hardware suppliers, exemplified by the pending tie-ups of Rockwell Collins and BE Aerospace, and Safran and Zodiac, as counterweights to the OEMs.

CGCS: How do you anticipate this changing in 2017? Will deal activity increase, decrease or stay consistent? Why?

Mr. Marlin: The new administration has heightened positive expectations for the market, as evidenced by strong public pricing industry-wide.  Budget optimism – especially DoD – coupled with the pro-business and pro-outsourcing tone of the White House, robust capital markets, anticipated tax relief and ongoing homeland and national security concerns foreshadow a healthy near-to-medium term aerospace, defense and government M&A market.

While it may take a few quarters for these macro trends to reach company P&L’s, we anticipate increased activity in 2017 with more meaningful uptick in 2018.

For additional information about this year's Mid-Atlantic Growth Conference, click the photo above.

Learn more about this year’s Mid-Atlantic Growth Conference – click the photo above.

CGCS: We’re rapidly approaching the annual Mid-Atlantic Growth Conference. In your experience, what are the biggest benefits to attendance at the MAGC? Who should try to attend, and what will they get out of attendance?

Mr. Marlin: The MAGC is the go-to event for deal making in the mid-Atlantic region for all deal makers.  We anticipate strong participation once again for DealSource, offering deal makers the opportunity to make sure they remain in the loop for transaction opportunities.

We have also assembled a high profile array of panels with topics ranging from emerging technologies, a case study in how to optimize the entire capital structure to build and sell (story of Vistronix), and deal making tradecraft from the view of private equity. We anticipate rich content for corporates, capital providers and advisors.

Finally, it’s all about networking. The MAGC is great timing for the deal making cycle, with many new opportunities often hitting the market towards the end of Q1/early Q2 off the momentum of a strong 2016.  We anticipate MAGC networking and meetings to serve as a launching point for many deal announcements across the region later in the year.  If you want to be in the Mid-Atlantic deal flow for 2017, the MAGC is a “can’t miss.”

CGCS: What is DealSource, and why is it such an important part of the MAGC?

Mr. Marlin: DealSource is really the cornerstone for deal making at the conference.  The investment banks have their 2017 deal rosters/market themes ready for discussion and capital providers have their new platform thesis and tuck-in needs.

The value of DealSource is really in the known-unknown, connecting with folks who aren’t necessarily on your radar or vice versa, and positioning yourself to get deals done.

For additional event information, or to register online for the Mid-Atlantic Growth Conference, click HERE.

 

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