Pre-Transaction Considerations When Evaluating Acquisition Targets

December 2019

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In the first Insight in BDO's three-part Mergers and Acquisitions (M&A) Buy-Side series for government contractors (GCs), BDO delves into the critical “pre-transaction” phase to provide key considerations for the industry to identify and vet potential acquisition targets. While M&A activity for the sector has been humming along over the last few years, in 2020, BDO anticipates that GCs will be much more cautious about the acquisitions they are prepared to undertake. Presidential elections have implications on expected federal spending and acquisitive GCs often take a “wait and see” approach while awaiting clarity. Economic indicators signaling a potential future recession may also cause some indecision and delays, but GCs tend to fair better through recessionary times than sectors without government spending.