Defence industry M&A — avoiding pitfalls in a distressed deal context

By Sarah E Kahn and C Kevin Kobbe

Although there have been some strategic divestitures and continued interest in certain areas (such as UAVs and cybersecurity), the Budget Control Act, sequestration and the drawdown of US troops in conflict areas around the globe have resulted in a fairly cautious defence industry M&A market. Pricing expectations of many targets and their potential acquirers have remained out of sync, with some of those targets hit particularly hard by budget cuts.

While this can result in significant leverage on the buy side, acquirers need to be aware of pitfalls when buying a distressed company or its assets. Writing for The Government Contractor, DLA Piper corporate partner Sarah Kahn, who co-chairs the firm’s defence industry transactional practice, and Kevin Kobbe, DLA Piper bankruptcy partner, explore these challenges…

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