Homeland Security Industry Growth through Consolidation

Homeland Security Industry Growth through Consolidation Homeland Security Firms Evolve and Expand Product Portfolios By: Ann-Marie Fleming February 2006 In early February, President Bush presented his fiscal year 2007 budget request for the Department of Homeland Security (DHS). The request for $42.7 billion indicates a 6 percent increase in funding from the 2006 budget. Elaborating on the priorities of the FY 2007 budget request, Secretary of Homeland Security Michael Chertoff explained in a recent press conference, "The budget focuses on strengthening our initiatives in protecting our borders, increasing our preparedness, expanding our intelligence gathering and sharing, and improving maritime and transportation security." This bodes well for companies operating in this arena, in particular those with technology surrounding surveillance, detection and identification products to assist in meeting the needs of border, port and transportation security and overall homeland security readiness. Defense sector correspondent James H. Smith in his weekly column, "The Defense Market Report"(exclusive HDS feature), explains, M&A activity continued to be the strategic weapon of choice for companies wanting to move decisively into desirable market niches. Top acquirers used M&A activity to drive their top lines far past the levels achievable through organic growth alone. With an estimated US$38 billion in worldwide M&A activity in the aerospace and defense sectors, 2005 was a very good year. And the current year also looks promising." As the homeland security industry continues to establish itself as a long term market, many anticipate M&A activity to become more prevalent. Scott Sacknoff, manager of the SPADE