国家安全领域的投资策略

IndustryCommentary HowtheIncreasingDemandfor InnovationImpactsInvestmentStrategiesintheNationalSecuritySector Thenatureofglobalconflictisshiftingfromdecentralizedactionagainstnon-stateactorstostate-on-statecompetition.ThisshifttoFifthGenerationWarfareisnuancedandcomplexbut,fundamentally,itischaracterizedbytwolinesofeffort:thepreparationforfull-scaleconflictusingadvanced,attributable,andnetworkedweapons,andanextended,coldconflictcenteredaroundinformationoperationsandnon-kineticaction. GordieVap +17049691581 gvap@williamblair.com JoshOllek +17049691583 jollek@williamblair.com AndrewKugajevsky +17049691582 akugajevsky@williamblair.com CooperBradley +17049691789 cbradley@williamblair.com BrandonFix +19805801926 brandonfix@williamblair.com 1.Source:NationalDefense,“PrivateEquityFuelingGrowthofDefenseMergers,”February27,2023. 2.Source:WhiteHouseInterimNationalSecurityStrategicGuidanceMarch2021. Asaresultofthisshift,newtechnologyandnewusecasesforexistingtechnologyareemergingatanincreasingpace.Thisisdrivinglargestrategiccompaniesthatfocusonnationalsecuritytomovequicklytocreateoracquireinnovativesolutionstofillcapabilitygaps. Tocompetewithlargestrategicacquirersandcontinuetogeneratestrongreturns,financialsponsorsmayneedtore-evaluatethepointinacompany’scorporatelifecycleat whichtheyinvest.Someprivateequityfirmsthathavehistoricallytargetedmaturecompanieswithalonghistoryoffinancialperformancearealreadyheadinginthatdirection—investinginearlierstagecompanies. “Ifyouhaveauniquetechnologypeoplearesoworriedthatsomeoneelseisgoingtogetitbeforetheydothatthey’rewillingtogoearlierandearlierinthecorporatelifecycle,”JustinSiken,founderofmarketintelligencefirmHigherGov,toldNationalDefenseearlierthisyear.1 Inthisarticle,WilliamBlair’saerospace,defense,andgovernmentservicesteamexplainsthemarketforcesdrivingstrategicacquirerstotargetearlier-stagecompaniesandhowsponsorsmightconsideradaptingtothetrend. TheHighStakesofInnovationandtheDemandforDisruptiveTechnology Thenationalsecurityindustryisdominatedbyarelativelysmallnumberofbigplayers.Theselargecompaniesfaceahostofchallengesrelatedtointernalinnovationandhaveadifficulttimemovingswiftlytodevelopdisruptivetechnology. Meanwhile,thedemandforinnovation—andthestakesinvolved—haveneverbeenhigher.TheWhiteHousemadethisplainin2021’sNationalSecurityStrategicGuidance,whichstatedthat“theworld’sleadingpowersareracingtodevelopanddeployemergingtechnologies...thatcouldshapeeverythingfromtheeconomicandmilitarybalanceamongstatestothefutureofwork,wealth,andinequalitywithinthem.”2 Policyhasreinforcedthisstrategicguidanceandfurtheremphasizedtheimportanceofinnovation. AcrosstheDepartmentofDefense,neworganizationsliketheOfficeofStrategicCapitalandvariousinnovationunitsareexpressly focusedonemerginganddisruptivetechnology.Additionally,legislativemeasureslike2022’sChips&ScienceActallocatedirectfundingtotechnologyadvancementsthathave far-reachingimplicationsforthenationalsecurityindustryincludingeverythingfromsemiconductorstoartificialintelligence.3 Likemostindustries,manyofthemostimportantinnovationsinthenationalsecurityspaceoccuratsmaller,moreagileenterprises.Thisleadslarge,establishedcompaniestoanacquire-to-innovateapproach.Unlikemostotherindustries,thatapproachismadeparticularlyattractivebyauniquesetofindustryfactors-consolidation, ahighlyregulatedmarket,andacomplicated,slow-movingcustomer(theU.S.government).Thesefactorsconspiretomakeitdifficultforsmallenterprisestoselltheirtechnologyandeasyforlargecompaniestowieldtheircontractingandbusinessdevelopmentexpertisetoacceleratetheadoptionofinnovativetechnology. IncreasingRegulation’sCompoundingEffectontheBehaviorofStrategicAcquirersThepastthreedecadeshaveseenrapidconsolidationinthenational securityspace,especiallyamongprimedefensecontractors.Defenseprimesnumberedmorethan50intheearly1990scomparedwithonlyfivetoday.4Thishasresultedingreaterantitrustscrutinyonmergersandotherdealsthatinvolvelargecompanies,furtherreinforcingthestrategyofacquiringdisruptivetechnologyorearly-stagecompaniesinsteadofpursuinglarge,industry-transformingmergers. Asjustoneexample,theFederalTradeCommissionrecentlysuedtoblockLockheedMartin’s$4.4billionacquisitionofAerojetRocketdyneHoldingsInc.(foundedin1942),amanufacturerofspacepropulsionsystems,citingtheneedtomaintaincompetitivepressure.5ButRaytheon Technologies’purchaseofBlueCanyon WhatRecentDealActivityTellsUs $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 1000 800 600 400 200 0 2016201720182019 20202021 DealCount 2022 DealValue VentureCapitalDealActivityinNationalSecurityTechnology ($inBillions)7 Settingaside2022’sbroadmarketdisruption,therehasbeenanuptickinspendingforventurecapitalinvestmentinthenationalsecurityspace,asnotedinthechartabove.Thedatashowsthatventurecapital,despitestigmatizingthenationalsecurityspaceforyears,isincreasinglyrecognizingthepotentialforearly-stagecompaniestoimpact thenationalsecuritylandscapeandgenerateaboveaveragereturns.Privateequityfirmsshouldregisterthisshiftandconsiderfollowingsuit(iftheyhaven’talready). $5,000 $4,000 $