Archive for December 9th, 2009

Here is some IPO thoughts from Washington Technology.

“I generally don’t make predictions, but I keep hearing tidbits from people that as the economy continues to improve, the government market should see several companies make the plunge into the public markets.

Global Defense Technology and Systems Inc. has done pretty well since it went public a couple weeks ago. Share prices have not closed below the $13, which was the price at the initial public offering. The shares have stayed between $13 to $14 mark, with the most recent closing at $14.36.

They haven’t caught the world on fire, but they’ve been respectable.

I’m sure executives across the market are watching and wondering, “Are we ready?”

From the people I’ve been talking to, three names are the most obvious – Booz Allen Hamilton Inc., Vangent Inc. and TASC.

With all three owned by private equity (Booz Allen with the Carlyle Group, Vangent with Veritas Capital, and TASC with General Atlantic and Kohlberg Kravis Roberts and Co. once that deal closes) some sort of exit strategy is always in the mix. While a sale to an existing company is possible, the size of these three, particularly TASC and Booz Allen, make a sale highly improbable.

But I don’t expect any of these three to be in a rush to do an IPO. First, their owners have a reputation for patience, and second, they are good performers and should be throwing off a lot of cash, which again means that they shouldn’t rush to Wall Street.

After these top-tier candidates, speculation gets much wider and perhaps wilder.

In the potential IPO pool, I would put companies such as American Systems, Apptis Inc., Pragmatics, Alion Science and Technology, and STG Inc. I’m sure there are others I’m missing.

The IPO challenge for some of these companies is size. Global Technologies Inc., with about $200 million in annual revenue, was about as low on the size scaled as you’d want to get.”

Read the full article here.

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