John Hillen will have some interesting conversation for his Thanksgiving table this year: his company, Global Defense Technology & Systems, Inc. held its IPO Friday. This is the first IPO in government contracting since SAIC went public on October 10th, 2006.
According to a press release, Global Defense Technology & Systems, Inc. will use the proceeds from this offering to repay debt and fund future acquisitions. It will not receive any proceeds from the sale of common stock by the selling stockholders.
Shares of GLOBAL opened today at $13.05, five cents above the IPO price. This is a win for GLOBAL Defense Technology and government contracting in general because Wall Street sees growth potential in this space. Check out John Hillen on thestreet.com telling us why the IPO was sound strategy.
Industry Experts Weigh In on Global Defense Technology & Systems IPO
“Government systems integration companies that have gone public over the past 10 years have generally all fared very well. Most are well above their initial public offering price, even after the recent dramatic downturn in the economy. Global Defense Technology is the most recent addition to public companies in the Government systems integration space and should experience similar success.”
“The number of IPOs in general have be way down over the past two years. Each one scrutinized heavily. This recent IPO by Global Defense is a very positive indicator that the investment community sees the growth potential in the government market space. From inside the industry, we recognize the opportunity this sector holds for growth and value creation. Successful IPOs validate that belief across the broader market. Hopefully this will provide another viable source of capital for midsize, growth oriented, government contractors going forward.”
“I think it's going to ignite a season of renewal and activity. First of all, it's an excellent management team led by John Hillen. It's also trading at the right multiples “” $13 [per share] is very reasonable, especially in light of this economy. Plus, it's in the right space, cybersecurity. So, I think it's a wonderful launch. I'm very excited, and I think it's a promising sign we may be entering a season of renewal.”
“It's the first of quite a few IPOs that are lining up as the markets recover here. There are quite a number of other companies that have indicated that they plan on public offerings in the first, second, and third quarters of next year; there is a long queue. So it was a good way [for GLOBAL Defense Technology] to get started. It's [also] significant [because] government contractors are on the front-end of the public offering successes that we're seeing as we come out of a recession. It's indicative of the way the investing public sees the defense and government contracting sectors. It demonstrates there is still a very liquid market for small cap government contracting and defense companies.”