Childs Company Reports that IT Services M&A Steady in First Quarter of 2008.

MCLEAN, Va. -- Melanie McFaddin, Partner with Childs Company, announced today that for the first quarter of 2008 she noted 51 transactions in the IT services sector. This activity was flat when compared with activity in the first quarter of 2007 and represents a 9% decrease over the fourth quarter of 2007. The data compiled for this study covers M&A activity involving U.S.-based sellers and acquirers who provide IT staffing, solutions and outsourcing services.

IT services transactions in the government sector continued to lead the industry with 12 transactions, accounting for almost 24% of the aggregate deal flow. The most active buyer during the quarter was SAIC (NYSE:SAI) with its acquisitions of Icon Systems and SM Consulting.

Other significant activity was recorded in the both the security and ERP spaces with three transactions each, representing almost 12% of the quarter's total deal flow. Most noteworthy was the acquisition of Selectron, Inc. by privately-held Aronson Security Group.

Also of note during the quarter were four management/leverage buyouts, indicating that the private equity markets are still active within IT services space and particularly for companies who provide services whose business model incorporated longer-term, recurring revenue streams.

Melanie McFaddin, Partner with Childs Company and an active participant in M&A in the IT services market for thirteen years, commented, "The activity in this quarter was dispersed around a wide variety of focus types. We continue to see very strong interest from buyers in the ERP arena and more specifically around SAP services providers." She further noted, "We generally see a slight dip in activity in the first quarter as buyers tend to push deals through the pipeline at year end and despite current macroeconomic conditions, we are not seeing much of a drop in buyer interest just more honed acquisition criteria."

Childs Company is an investment bank headquartered in Atlanta that focuses on middle-market companies whose value is derived from human capital. The firm's clients include companies that provide general, professional and IT staffing, IT solutions and BPO, and human resources consulting and BPO.