PE Finds Success in Gov't & Defense Exits

DC Capital Partners has entered into an agreement to sell National Interest Security to I.B.M. NIS owns and operates a group of companies engaged in providing information technology, information management and management technology consulting services to the U.S. intelligence community and other government agencies. The investment was DC Capital's first after being founded in 2007 by Thomas Campbell. Now it is DC's first exit as well. A good exit at that, earning the firm $180 million and generating a 9x return on its original investment, according to a source.

Private equity firms have exited 39 Defense and Government service provider companies through sales to strategic acquirers since 2000, according to the PitchBook Platform. Combined, the sales amount to approximately $6.4 billion with an average exit amount of $266.7 million. The average hold time of these investments was 4.8 years. The median capital amount returned from the sales was $210 million with a multiple of 2.68 times the original investment. Other similarly exited companies that returned a nice multiple are The Carlyle Group's Aviall, Veritas Capital's Integrated Defense Technologies and GTCR Golder Rauner's DigitalNet.