ACG National Capital
Federal budgets have been shrinking at a steady pace, which has had an impact on how middle market companies in certain key industries behave.
Larry Davis is a Partner and Founder of Aronson Capital Partners with over 25 years of transactional experience in mergers, acquisitions, divestitures, and financings. He has worked on more than 40 transactions involving middle‐market defense and government services companies.
Mr. Davis was also recently appointed as an ACG National Capital Board Director, which presented a perfect opportunity for our editorial team to reach out to Mr. Davis for some additional insight about government acquisition as well as ACG membership.
Here is what Mr. Davis had to say:
CGCS: What are some of the most common challenges when it comes to advising middle market companies in the Aerospace, Defense, and Government market?
Larry Davis: The biggest challenge is directly related to declining and tightening budgets across most of the defense market. While there are areas of strong growth such as cyber, data analytics, and C4ISR, at the top level the budget is declining, which has limited the organic growth prospects of many companies.
Particularly impacted are those without exposure to the areas of strong growth. Furthermore, with many of the DoD components facing budget pressures, procurements are subject to delays and cancelations, which wreak havoc on company forecasts.
CGCS: How have recent, high-profile cyber breaches (like the OPM hack) affected how the government services industry prioritizes cybersecurity? Are more companies looking to add a strong cyber presence to their portfolio in order to seem more attractive to government entities?
Larry Davis: The recent high profile cyber breaches have only heightened an increasing demand for cyber security solutions. Cyber is one of the faster growing business areas in the GS market and as a result, cyber security targets have accounted for a significant amount of M&A activity in the space as government services providers build out their cyber offerings.
We are also seeing significant funding going to tech startups that are incubated in the defense and government services market who are developing new approaches to the ever increasing cyber security challenges.
CGCS: How has your role within Aronson Capital Partners prepared you to become an ACG Board Director?
Larry Davis: Working in an industry focused investment bank, one develops a real appreciation for the value of relationships within the corporate growth community.
This is a collaborative business and I look forward to working with fellow deal professionals to advance our local chapters interests.
CGCS: Why should fellow National Capital Region C-suite executives take notice of ACG? How has being an ACG member benefited you in the past?
Larry Davis: I think the power of ACG is pretty clear; ACG provides a community for C-suite executives to network and build relationships. These relationships facilitate getting business done.
I have benefited directly from the relationships I have developed over the years through my participation in ACG. It provides a forum to stay in touch, collaborate and learn with other executives.
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