Red flag on Booz Allen IPO
Watch out investors, the government contracting market is going south, meaning, a reduction in the market size due to government spending cutbacks.
Carlyle and Booz Allen want to get something while they still can. Any firm that does the majority of its business with only government customers should be highly suspect, IMO.
“Booz gets 98 percent of its sales from U.S. government contracts in areas ranging from defense to health care. The filing showed that revenue increased 18 percent to $5.12 billion in the fiscal year ended March 31. Booz Allen reported a $25.4 million profit, versus a loss in the year-earlier period.”
By Cecile Vannucci
Friday, November 5, 2010; 12:44 AM
Booz Allen Hamilton, the McLean consulting firm taken private by Carlyle Group in 2008, is seeking an initial public offering that might hand the buyout firm a 241 percent paper profit on its investment.”
The investor “watch out” should extend to all government contractors.