Potomac was retained in late 2019 by US defense consulting firm, Cypress International, to support a major due diligence effort for one of their clients, a leading aerospace & defense contractor. We joined the Cypress team on-site for this 45-day long project, actively participating in daily progress reviews and interviews with both the target company’s investment banker and the client’s management team. An extensive review was conducted of the US DoD’s Five Year Defense Plan (FDYP) as it relates to the acquisition target’s revenue forecast for both R&D and production to identify potential risks to future revenue and EBITDA. Results of our work on the Cypress team were presented to client’s senior executives and CEO with excellent feedback.
Boston Consulting Group
In 2019, Potomac was tasked by BCG to conduct an independent review of the USMC’s Armored Reconnaissance Vehicle (ARV) program in support of a BCG consulting team’s engagement with a major US Defense contractor. Potomac conducted an in-depth study of publicly available reports and interviewed both DoD program managers and executives at key suppliers of major sub-systems for the ARV. A written report was completed to meet BCG’s very short time schedule and also presented via conference call with the Partner responsible and his team at BCG.
Mitsubishi Space Systems
In 2019, Potomac was engaged by Mitsubishi Electric’s Space Systems Division to provide an overview and commentary on publicly available market research reports and technical reports on the potential business opportunities for LEO space debris monitoring and removal. We conducted a thorough review of available studies on this market and interviewed both technical experts and aerospace industry managers over a 45-day period preparing both a written report and videoconference presentation with the technical and project team in Japan. Potomac also provided this client with insight from the investor community and specific recommendations as to how to view the business potential for success in this market.
Delta Information Systems, Inc.
In 2018, Potomac was engaged by this private employee-owned aerospace electronics firm to assist senior management in developing a growth strategy within and beyond its current core markets. Working with a team of industry experts, we developed a detailed understanding of the company’s business areas, markets and business plans to enable us to research and analyze potential adjacent markets of interest and identify key industry players in each vertical. During the course of this three-month long project, Potomac developed an M&A strategy, identified, and evaluated target candidates. Interaction with the client’s senior management team was conducted through a series of on-site presentations and video conference calls.
Lockheed Martin Space Systems Company
Potomac was engaged in 2016 to support a team of Space and Satellite experts to advise senior management on a strategic direction for new business development. Potomac was specifically tasked with addressing opportunities in the Satellite Ground Segment including TT&C, Mobile / Fixed VSATs, Antenna Systems, Telemetry, RF Systems for DOD, NASA and other US Government requirements. This project required considerable research and analysis over a three-month period culminating in presentations and recommendations to the client’s senior management.
GreyScan Pty Ltd
Potomac served as North American Representative for Melbourne, Australia headquartered GreyScan under a long-term contract from 2015 to 2018. GreyScan is a private, VC backed technology firm who have developed a portable Capillary Zone Electrophoresis (CZE) technology-based explosives detection (ETD) product that can detect trace amounts of inorganic explosives with a much higher sensitivity than alternative solutions. Inorganic explosives are commonly key ingredients in the homemade explosives (HME) widely used by terrorists. Potomac provided a global market study, developed and implemented a channel partner strategy and worked directly with the US DHS and a top supplier of aviation security detection solutions to enable GreyScan’s product to be evaluated and tested by DHS, paving the way for approval by TSA and the US DoD. Potomac negotiated and executed distributor agreements for the sale of GreyScan’s ETD products globally and actively supported GreyScan with industry conferences and exhibitions.
Xerox Federal Solutions (Now SAIC)
In 2015, Potomac was retained by the CEO of this subsidiary or Xerox Corp. to explore strategic alternatives including acquisition candidates in the US Federal IT services contracting space. Potomac teamed with Longstreet Partners to identify potential targets and to work with investment bankers active in the Federal IT services market to achieve this goal. Potomac developed a strategy, compiled a target list, evaluated several proposals and conducted due diligence that was presented to Xerox management. This project was concluded after nine months when Xerox Corp. made the decision to divest Federal Solutions, which was acquired by SAIC in March 2020.
Advantor Systems, Inc. (Now Vectrus)
At the request of the CEO and owner, Potomac was retained by this private security technology integrator in 2013 to develop a strategy for the expansion and diversification of its US Government (USAF, DOE, DOS) customer base into the DHS and regulated commercial markets including air cargo, ports and other critical infrastructure. Potomac analyzed the addressable market, competitive environment, and resource requirements and developed a business plan for implementing this expansion strategy. Near-term opportunities were identified as well as teaming and sales channel partners. The goal of broadening the existing customer concentration was achieved after Advantor’s management implemented Potomac’s recommendations resulting in increased growth and record sales for 2015. Vectrus acquired Advantor Systems in 2019.
INDUS Corporation (Now Tetra Tech)
In 2013, Potomac was engaged by INDUS Corporation to provide an assessment of System Planning Corporation (SPC), an Arlington, Virginia based defense consulting and program management professional services firm. INDUS had made a conditional offer to acquire SPC and desired a review of the company’s revenue forecast by an independent consultant as part of INDUS’ due diligence effort. The Potomac team met with both SPC’s senior management and key staff to conduct a complete review of SPC’s business outlook. This project included a review of all contract backlog documents, monthly financial actuals vs. forecast, review of SPC’s three-year revenue forecast and pipeline using standard methodology currently in use by DoD Prime Contractors. Potomac presented the findings of this review to INDUS management in the context of the proposed transaction. INDUS was acquired by Tetra Tech in 2018.
Aero Simulation, Inc.
In response to a request from the founder and owner of this private contractor for the US DoD and the USCG as a supplier of aircraft pilot simulators and services, Potomac was retained for a six-month long engagement in 2012 to value the business and explore strategic options for the owner of the business. In consultation with the owner and management team, a decision was reached to sell the business to a financial investor. Potomac developed a Confidential Investment Memorandum, identified potential investors from mid-market Private Equity firms, and solicited multiple offers from several investors. Potomac was able to secure a complete financial package that was of the greatest value.
L-3 Security and Detection Systems (Now Leidos)
Potomac Key Group was retained from 2010 to 2013 by the leading provider of check point, checked baggage and cargo inspection systems to TSA to assist senior management in expanding L-3 SDS into non-TSA commercial international and U.S. Government markets. Our engagement encompassed a review of the existing sales and marketing approach to include direct sales, distributors and sales pipeline. We advised L-3 SDS management that aggressive development of sales channels in the U.S. public sector market was required with selective investment and partnerships in Latin America. Potomac defined vertical markets in the Physical Security Market including air cargo and provided introductions to channel partners with the ability to distribute L-3 products in high demand markets. L-3 SDS was acquired by Leidos in 2020
Jenoptik AG Traffic Solutions
Under contract to Jenoptik AG, Potomac’s founder, Stuart Mackiernan served as CEO from 2008 to 2011. Jenoptik is a world leader in providing traffic monitoring equipment to governments, police departments, and traffic enforcement service providers. Since 2000, Jenoptik had operated a services business in the US as a distribution channel for their products. This operation, based in Baltimore, operated nationally in the US but had never reached the scale required to compete effectively in the traffic enforcement services market in the US. The purpose of the engagement was to evaluate the business, market, technology, and competition and to make recommendations for strategic alternatives for this business. The approach was to bring in engineering and operations expertise in the traffic enforcement services industry and to do a complete evaluation of the operation and potential for growth. Significant improvements we made in the operation of the business, which became profitable within the first year. We recommended to Jenoptik that they make a major acquisition to increase scale and positively impact profitability or, alternatively, to divest the business to one of the two large companies driving a consolidation of the industry. Jenoptik decided to sell the business and we brought in a strategic buyer and negotiated the sale.
In 2007, we learned from investment bank FBR that one of their clients, CompuDyne Corporation, a publicly traded company engaged in providing solutions for homeland security and public safety software that their largest shareholders were interested in a liquidity event. In cooperation with CompuDyne management, Potomac Key Group took the lead in taking the company private in a transaction, which allowed the shareholders and management to achieve the liquidity they desired. Under formal agreement with CompuDyne, Potomac Key Group retained FBR to assist in identifying Private Equity investors to acquire the company. A total of twenty Private Equity firms signed non-disclosure and “stand still” agreements and received copies of the Confidential Information Memorandum prepared jointly by Potomac Key Group and FBR. Potomac Key Group Managing Director, Stuart Mackiernan led a “road show” to visit with 10 Private Equity firms who were interested in the transaction. The Gores Group of Los Angeles was selected by Potomac Key Group and we then teamed with Gores to make the successful offer and complete the transaction with an enterprise value of $110 million. Following the close of the transaction, Mr. Mackiernan assumed the role of CEO for the new private CompuDyne Corporation.
Shared Spectrum, Inc.
Potomac Key Group was retained by Shared Spectrum, Inc. of Vienna, Virginia in 2006 to provide advice to the company’s founder and senior management on a strategy to commercialize technology developed under contract to the Defense Advanced Research Projects Agency (DARPA). Shared Spectrum had proprietary technology for advanced software defined radio systems, which resulted from their work in anti jamming technologies for the US Military. With the explosive growth in commercial wireless communication and the resulting saturation of existing available radio spectrum in the US and worldwide, there is a significant demand for Shared Spectrum’s product. Potomac Key Group identified markets, channel partners, pricing and licensing strategies for Shared Spectrum enabling the company to make a transition from a small defense contractor to a recognized provider or commercial wireless technology.