Investing in Homeland Security: Global Defense Technology & Systems IPO

Global Defense Technology & Systems (GTEC), a provider of IT and engineering services to US defense and intelligence agencies, is expected to price its IPO this week.

Business Overview (from prospectus)

We provide mission-critical technology-based systems, solutions, and services for national security agencies and programs of the U.S. government. Our services and solutions are integral parts of mission-critical programs run by the Department of Defense, Intelligence Community, Department of Homeland Security, federal law enforcement agencies, and other parts of the federal government charged with national security responsibilities. The programs that we support are generally funded as part of the budgets and spending levels of U.S. government agencies entrusted with carrying out the U.S. government’s defense, intelligence, and homeland security missions.

Offering: 4.6 million shares at $14 -$16 per share. Net proceeds of approximately $40.4 million will be used to repay debt.

Lead Underwriters: Cowen & Company (COWND), Stifel Nicolaus (SF)

Financial Highlights:

Revenue for the nine months ended September 30, 2009 increased $13.9 million, or 9.7%, to $157.1 million, compared to $143.2 million for the same period in 2008... Cost of revenue increased from $119.4 million for the nine months ended September 30,2008 to $129.1 million for the same period in 2009... Operating margins in the FMMS segment continued to rise in the first nine months of 2009 to 12.7% of segment revenue reflecting the higher operating margins achieved primarily in the second half of 2008.

Competitors

We believe our principal competitors in these categories include the following companies in our TIS segment:

Among large defense contractors, Lockheed Martin Corporation (LMT), SAIC, Inc. (SAI), Northrop Grumman Corporation (NOC), BAE Systems plc (BAESY.PK), General Dynamics Corporation (GD), The Boeing Company (BA), ITT Corporation (ITT) and L-3 Communications Holdings, Inc. (LLL).

Among mid-tier technology services firms, SRA International, Inc. (SRA), CACI International Inc. (CACI), Stanley, Inc. (SXE) and ManTech International Corporation (MANT)

In our FMMS segment: We mostly compete against smaller niche organizations, including Carlin Manufacturing, LLC, Highland Group Industries, Inc., Tri-tech Inc., as well as, AAR Mobility Systems, a division of AAR Manufacturing, Inc. and DRS Technologies, Inc., a subsidiary of Finmeccanica S.p.A.

Additional Resources:

• Company website
• Online road show